Think Through National Insurance Increases

Now I have no particular political axe to grind but I have something to say about the proposed increase in National Insurance to come in April 2011 under the current Labour government. Several big businesses have come out against this plan as it will hit employment, which is true, the more employees you have the more National Insurance Employer contributions you pay. Many employees (but not all) are unaware that their employer pays a NI contribution as well as the chunk that is taken from their wage as an employee.

Lord Mandelson has said that businesses have been 'victims of a cynical deception' by the opposition. I don't know or really care that much if this is true or not because I feel more salient points are being missed here in all the big business talk.

There are thousands of us out there who work in the public and voluntary sectors for whom the story of proposed National Insurance increases is very different but no less damaging. The key component of this damage is that National Insurance is not based on profit and as public and voluntary organisations usually do not make a profit, they cannot increase trade to absorb the increase. So what does this mean?

Well for public sector employers this would mean to keep the same number of employees, there would be a likely increase in Council Tax to maintain current service levels, without that there is likely to be a dramatic cut in service provision in the public sector, with as usual; health and social care bearng the brunt.

For people like me, the director of a small independant charity employing 6 people the affects could be devastating. With charitable funding becoming harder and harder to find as the country recovers how on earth am I going to find the extra money to pay higher National Insurance contributions for my employees. Yet this seems to have been forgotten about.

This is far from a party political blog for the Conservative Party as their record with health and social care provision is hardly glowing, but what it is is a plea to review this proposition and stop just looking at business. Listen out for the quieter voice of us social entrepreneurs who don't make profit, but provide extremely good value for money providing professional service at grassroots level direct to those that really need it, on the shoestring budgets