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National Insurance Contributions

Oral Answers to Questions — Treasury – in the House of Commons at 2:30 pm on 13th July 2010.

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Photo of David Rutley David Rutley Conservative, Macclesfield 2:30 pm, 13th July 2010

What representations he has received from employers in the north-west on relief from national insurance contributions for new businesses; and if he will make a statement.

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Photo of David Gauke David Gauke The Exchequer Secretary

The holiday on national insurance contributions will support enterprise and private sector job creation. Representations from employers have been supportive of reducing taxes on jobs, and 400,000 new businesses are expected to benefit from the holiday on employer national insurance contributions, including about 70,000 in the north-west.

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Photo of David Rutley David Rutley Conservative, Macclesfield

It is clear that this important Budget proposal will help to generate much-needed jobs for small businesses. Does my hon. Friend agree that this is a much better way of supporting job creation in places such as Macclesfield and the north-west, and in other regions, than relying on the public sector, as the Labour party did?

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Photo of David Gauke David Gauke The Exchequer Secretary

My hon. Friend is right. We cannot rely on the public sector for growth, simply because we have run out of money.

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Photo of Tony Lloyd Tony Lloyd Labour, Manchester Central

How many businesses-perhaps the Minister could name them given that there are so few-will do better because of the national insurance cut and will not suffer because of the VAT increase and the cutback in demand, which will be disastrous for businesses in the north-west?

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Photo of David Gauke David Gauke The Exchequer Secretary

The fact is that businesses would much rather we focus on dealing with the jobs tax, which our predecessors brought in. We recognise that we have to reduce the deficit and that tax has to play a role in that, but what we can do to create jobs in the private sector is reduce the burden from national insurance contributions. This particular policy, directed at areas where the public sector is largest and where we need a stronger private sector, has to be the way forward.

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