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National Insurance (Employment Credit) Bill 2008

That the Bill be passed  

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Employment (National Insurance) Act.pdf

Mr Speaker,

I move, that this Bill do be read a second time.

I have no doubt that this House is concerned about rising unemployment resulting from the global financial crisis. Over the last year, we have taken decisive action. The last budget contained significant new infrastructure investment, and a major business investment incentive, as part of a significant fiscal stimulus. Without those measures, unemployment would be climbing much more steeply.

But I accept that this is cold comfort to people out of work, and it is incumbent on us to do everything we can to arrest the rise in unemployment and help those affected into jobs. 

The focus of the next Budget will be on employment. But I want us to offer immediate incentives and relief now. 

Therefore, this Bill is step one of a bigger Budget package that will cut unemployment, but will make a major contribution. Under this scheme eligible businesses can claim a £2,000 credit for new hires. Evidence from other countries that have introduced similar schemes find that they are most effectively targeted at the longer term unemployed, and so that has been our focus here. For example, in Germany, subsidised employment schemes for the long-term unemployed have improved individual employment prospects by between 25 and 42 percent.

The credit will do two things: it will incentivise new hires, particularly among businesses not quite sure whether in this environment to take on that extra member of staff; and it will encourage those hires among those workers that are most at risk of becoming long-term unemployed and therefore less able to move back into employment. And where it does not directly incentivise a hire, it will provide support to businesses seeking to grow and invest in the economy.

The Bill sets out that this scheme will run for six months, but can be renewed to up to two years. Our intention is to revisit this scheme at Budget alongside broader decisions around a package to support employment.

Mr Speaker, this Bill offers swift and targeted prospects to arrest the rise in unemployment and I commend it to this House.

Katherine West

Conservative MP for Watford (2007 - )

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