PBR - Some good news but tax on jobs doubles

Thursday 10th December 2009

Commenting on today’s Pre-Budget Report from the Chancellor of the Exchequer, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“The Chancellor’s Pre-Budget Report contained a mixture of good news and bad news for Scottish business.  On the positive side, we have secured an extension of the Enterprise Finance Guarantee scheme and of the HMRC payment terms scheme, which should be of benefit to a number of businesses, as will the creation of a Growth Capital Fund.  We also welcome the further deferment of the planned rise in the small business rate of Corporation Tax, although it is time that the Government put paid once and for all to the threat of this unwarranted tax rise.

“However it is extremely worrying news indeed that instead of abandoning its plans to increase both employers and employees rates of National Insurance Contributions by 0.5% in 2011, the Government has signalled its intention to double this tax rise by a further 0.5%.  This is nothing less than a tax on employment at a time when businesses and those looking for work can least afford it and it could lead to damage to Scotland’s skills base and competitiveness.”

On the UK Government’s plans to tackle public sector employment costs, Mrs Cameron added:

“It is encouraging to see the UK Government take the lead in finally recognising the threat to our competitiveness caused by public sector pay and pension arrangements which are now way out of line with the realities of the private sector.  This must be tackled if increasingly finite public resources are to be focused on delivering the policies which our country needs to maximise our potential for growth.  With public sector pensions accounting for an incredible 43% of the Scottish Government’s Finance and Sustainable Growth budget, it is now time for this nettle to be grasped north of the border as well.”

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