David Prosser: Business is better off out of politics


Outlook Senior business folk would be well-advised to think carefully before weighing into the political debate in the partisan way we have seen over the past couple of days. It is one thing to express your views, but quite another to allow yourself to be used by a political party keen to be endorsed by those with influence.

By definition, the national insurance rise due to come into effect next April is a tax on jobs, as the chief executives who wrote to the The Telegraph yesterday suggested. I've made that case in this column several times now – it is a tax on jobs that will raise around £2bn in the 2011-2012 financial year – pointing out that the Tories were rather slow to cotton on to this line of attack.

The question, however, is whether next year's tax rise will do more harm than good. The businessmen who signed yesterday's missive by and large run very profitable companies. It may be that the NI increase means they do not hire quite so many extra staff as they might otherwise have done, but it will be a marginal effect.

Other businesses are doing less well and may find the extra spend more of a burden, to the greater detriment of employment. But such warnings often prove unfounded. Remember how the introduction of a minimum wage was supposed to send unemployment soaring?

In an ideal world, there would be no tax rises for business. But this is not an ideal word: there is an unprecedented debt problem to get on top of if we are to avoid even greater economic difficulties.

Business must play its part. If it thinks the way the Government asks it do that is counter-productive, there are channels open to it to make the case. But backing one party's proposals in the run-up to an election looks like self-interested opportunism.

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