Tory leader David Cameron has unveiled plans to offer companies a £2,500 National Insurance break for every new worker they take on who has been unemployed for more than three months.
"We know that every time someone leaves benefits and goes into work, it saves the taxpayer over £8,000 a year,” Cameron told journalists this morning.
"We will use some of that money that otherwise would have been spent on unemployment benefits, to give tax breaks to employers."
Mr Cameron said it costs the taxpayer £8,000 when someone leaves employment and starts claiming employment benefit: under the Tory scheme, £2,500 of that will be used to fund a cut in the amount of National Insurance paid by businesses.
The Conservatives claim their plan would create 350,000 jobs and cut firms’ tax burden by £2.6bn.
However, prime minister Gordon Brown said the figures “simply don’t add up” and claimed “serious policy” was required for “serious times”.
John Cridland, deputy director-general of the Confederation of Confederation of British Industry (CBI) welcomed the Tories’ “imaginative” proposition.
“We know small and medium-sized manufacturers are cutting jobs for the first time during this crisis.
“While firms have to do what is right for their businesses in these challenging times, these imaginative proposals would help some small businesses keep people in work.”
© Crimson Business Ltd. 2008