We have a tax cut

George Osborne has just announced a tax cut. Any new business started in the first two years of a Tory government will pay no employers’ national insurance contributions on the first ten people it hires. This means these first ten employees will cost new businesses 12 percent less.

This is a move that makes sense in both economic and political terms. Economically reducing the tax on jobs is a good move, getting more people into work will eventually result in more money coming into the Exchequer. Politically it is smart as it gives the Tories something they can point to on the doorstep to show they really are serious about boosting job creation. It would also have been a mistake to go into the next election with the only tax cut that the Tories were offering being to the heirs of millionaires.

I’m told that we can expect more measures to spur job creation in Osborne’s speech tomorrow.