National Insurance Contributions

Oral Answers to Questions — Scotland – in the House of Commons at 11:30 am on 14 January 2015.

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Photo of Angela Watkinson Angela Watkinson Conservative, Hornchurch and Upminster 11:30, 14 January 2015

What assessment he has made of the potential effect on businesses in Scotland of the removal of the requirement for employers to pay national insurance contributions in respect of employees under the age of 21 and apprentices under the age of 25.

Photo of Alistair Carmichael Alistair Carmichael The Secretary of State for Scotland

Abolishing employer national insurance contributions for under-21s is expected to help Scottish businesses save £45 million and support jobs for 138,000 young people. Extending that to apprentices under 25 will help about 31,000 apprentices in Scotland, and it will be more than £1,000 a year cheaper to employ an apprentice earning £16,000.

Photo of Angela Watkinson Angela Watkinson Conservative, Hornchurch and Upminster

Is it correct that the employment level in Scotland rose to a record level in the last financial quarter—even higher than the UK average? Does that not demonstrate that the Government’s long-term economic plan is working across the United Kingdom and especially in Scotland?

Photo of Alistair Carmichael Alistair Carmichael The Secretary of State for Scotland

Indeed, my hon. Friend is absolutely right, and that is especially true in areas that are hardest to move, such as youth unemployment, which is down by 5.1% over the past 12 months. Of course it is still too high and of course there is still a great deal to do, but those figures and the ones that she has just mentioned demonstrate that the Government’s plan is right, that it is working and that we should not put it at risk by handing power to those who would just borrow, spend and play games for political ends.

Photo of John Thurso John Thurso Chair, Finance and Services Committee, Chair, Finance and Services Committee

When my right hon. Friend next travels down the A9, may I commend to him a stop in Brora to visit Highland Bespoke Furniture? It now employs six people as a direct result of the reduction in national insurance that has helped it to recruit further skilled work. Will the Government consider extending the scheme to workers over 25 who are coming back to work, as that would help further to expand that business and employment in that area?

Photo of Alistair Carmichael Alistair Carmichael The Secretary of State for Scotland

I thank my right hon. Friend for that question. I look forward to joining him in the not-too-distant future, and if Brora is a place in his constituency that he thinks I should see, I will be more than happy to go there with him. He is right to mention the opportunities that have been created as a result of this measure, and businesses the length and breadth of Scotland will tell a similar story to the one he has just related. On his proposal to extend the scheme, he will be aware that a Budget is coming up in March, and he or any hon. Member from across the House who wants to make representations can do so through the Scotland Office.