Responding to reports that the UK Government is considering raising National Insurance to help pay for social care in England, Kitty Ussher, the Institute of Directors’ Chief Economist, said:

“This seems an extraordinary time to be considering adding to the cost of employing people. Due to the much publicised labour shortages, our own research shows that 73% of businesses are already concerned about rising salary-related business costs. Businesses do not understand why Government would want to add to the cost of taking on a new employee through an increase in employer national insurance at this of all times.

“National Insurance should not be used in place of general taxation. It was established to protect people financially from the risks of being unable to work, based on a contributory system, and it is on that basis that employers also make contributions. There is no logic to employer national insurance contributions being used to fund anything else.”