I haven’t seen all the numbers yet – or, indeed, many details at all – so consider the following as very loose, first impressions of the tax cut Cameron’s just announced (details here):
What is it? Companies which employ workers who have been jobless for three months will get a cut in the amount of national insurance they pay. The cut will be worth £2,500 for every such worker taken on. According to Cameron, that could reduce the overall tax burden on companies by up to £2.6 billion, and create up to 350,000 jobs.
How is it funded? Out of the cash that would otherwise have been spent on unemployment benefits.
Potential pros. A neat double action: reduces the tax burden whilst also reducing unemployment – helps both business and individuals. 350,000 jobs would be a hefty reduction in unemployment (currenty around 1.8 million). Provided the numbers work out, there’s a nice synergy to funding the meaure out of welfare payments.
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