Cut National Insurance tax after furlough scheme ends, says BCC boss

The government should cut National Insurance tax once the furlough scheme unwinds in the autumn, a top industry figure has said.
Speaking on City A.M.’s The City View podcast, Adam Marshall, director-general of the British Chambers of Commerce, said the Treasury should consider a form of ongoing support for UK firms.
“We understand the Treasury’s concern about the cost [of the furlough scheme] and many of the other interventions because at some point we’ll have to pay some of it back. But what we now need to do is shift fromthe emergency measures to some other form of support for businesses,” Marshall said.
“If we’re moving on from the furlough scheme now is the chance for the Chancellor to scrap the jobs tax – employers’ national insurance contributions – which are a big burden on businesses when they’re taking salary costs back on board.”
The job retention scheme, which was introduced in April, sees the government pay 80 per cent of wages for employees who were placedon furlough to prevent swathes of job losses.
However from this month employers have been forced to contribute to the scheme and will have to pay national insurance contributions on the wages of furloughed staff.
“I’d much rather see businesses paying their people rather than the revenue once the furlough scheme comes to an end, and a cut to the jobs tax would be a good place to start,” Marshall said.
As the scheme starts to unwind, the Labour Party have called on the government to introduce furlough for hard-hit sectors. However Marshall disagrees with this proposition: “There are lots of examples about how very sector specific support for employment could create some real cliff edges and difficulties in supply chains and in some of our business communities.”
“That is not to say there isn’t a case for some specific support for the hardest hit sectors,” he said. Marshall added that firms are still saying that government support is helping prop up cash flow.
A BCC survey published today shows 34 per cent of firms cited the job retention scheme as helping with cash reserves.