More than 7500 new manufacturing jobs could be created in Yorkshire if manufacturers were given a temporary reduction in employers’ National Insurance when they take on new workers.
The figures come from accountancy and business advisory firm BDO LLP, which is calling on political parties to show their support to manufacturers as we enter the final furlong to May’s General Election.
The new BDO analysis found that 7,597 new jobs could be created in Yorkshire during the course of the next parliament if employers’ National Insurance, known to be a real barrier for taking on workers, was temporarily reduced for manufacturers.
The targeted relief would stimulate employment by offering employers 100% relief in 2015 for new workers, with this reducing by 20% each year until the relief reaches zero or the scheme ends.
The policy recommendation forms part of the BDO Mid-Market Manifesto, which lobbies for specific support for medium-sized businesses that are currently under-valued and overlooked by government policy.
Medium-sized manufacturers alone would create a third (2,696) of these new jobs if the policy was taken up by a potential government.
Terry Jones, partner and head of BDO LLP in Yorkshire, said: “Manufacturing is a vital sector for the region and the UK as a whole, and it is the medium-sized businesses that provide us with the biggest untapped potential in both domestic and international markets.”
In Yorkshire, medium-sized manufacturers already employ more than 192,000 people, generate £29.2bn in revenue and contribute £1.3bn to the region’s export value.
By assisting local businesses that are most likely to be exporters or supply exporters, introducing a temporary reduction in employers’ National Insurance for the manufacturing sector over the next four years will support the government’s target of doubling exports by 2020.
In addition, the cost to the Exchequer – estimated at £2,600 per annum per worker based on an average wage of £26,500 – when offset by the increased income tax and employees National Insurance, would result in a net Exchequer benefit.
In the Autumn Statement at the beginning of December, the Chancellor announced the lifting of National Insurance for employers taking on apprentices under the age of 25.
Terry Jones added: “The Chancellor has already shown a willingness to use targeted national insurance reliefs as a way of stimulating employment. The apprentices move was a step in the right direction, but it does not go far enough. This policy could singlehandedly benefit manufacturing GDP, job creation, export levels and the Treasury’s coffers.”
