New Clause 5 - Proceedings under Financial Servicesand Markets Act 2000
Social Security Contributions
12:30 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
Absolutely. That is precisely the point: the option is a relieving measure. The Minister referred to the quid pro quo, the key to which here is the fact that the potentially large future employer NIC bills are capped at the much smaller amount as of 7 November. If a company does not take up the option, markets will interpret that as meaning that the management is not optimistic about future prospects. If I were a shareholder in a company and saw that it did not take up the option, I would think of selling the shares. That is how the market will react.
The reason for not taking up the option may have nothing to do with that and could be for one of two other main reasons. The signals sent to the market could be quite misleading.