Budget request by the CIPD

The CIPD has called on the chancellor to help businesses save jobs by cutting employers’ national insurance contributions (NICs) in this week’s budget.

The latest quarterly “Labour market outlook” survey by the CIPD and KPMG has found that 37 per cent of employers believe that a reduction in their NICs would be the measure most likely to help their organisations survive the recession.

Cutting the class-one employer rate of NIC by 1 percentage point for six months during this tax year would cost the government just under £2.5 billion, according to KPMG.

The institute has also called for the introduction of a subsidy to manufacturers to support short-time working. More than half of the manufacturers surveyed (56 per cent) said that they would probably use such a subsidy. A number of companies are now offering shorter working hours and career breaks to avoid job losses in the current climate.

Other short-term measures backed by employers in the survey were a reduction in corporation tax and a further VAT cut. The research report also suggested that delaying the annual increase in the national minimum wage, due in October, could limit job losses in low-paid sectors. The national minimum wage is due to increase from its current level of £5.73 for all workers who are 22 and over. The British Chambers of Commerce recently commented that the rates should also be frozen this year whilst the TUC previously campaigned for the rates to be increased to £6.10 per hour.