Telling the truth about SME life today

Current incentives for hiring staff are just not enough

A common complaint we hear about is that although entrepreneurs really do want to take on more staff, the conditions just aren’t right at the moment.

“We’ve already had 600 job enquiries since the turn of the year, with most of those coming from the under 25s. I’d love to be able to offer work to some of them, but the government is not encouraging businesses to take on young people,” says Charlie Mullins, founder and managing director of Pimlico Plumbers.

Research by the Federation of Small Businesses (FSB) certainly backs this up. Over half of the small businesses surveyed in January say taxes have prevented them from taking on more staff.

“The UK economy needs real action to get more people into work, especially under 25s, who make up a large proportion of those currently unemployed,” comments John Wright, national chairman of the FSB.

“A cut in National Insurance Contributions would encourage small businesses to take on more staff and grow their business.”

Mullins agrees, saying that with the right common-sense incentives from the government, he would hire 20 new apprentices “tomorrow”.

“If the government helped employers pay their wages while they were training, not only would they see a welcome drop in the statistics, but employers would have a whole new skilled workforce at their disposal,” he says.

The FSB’s research shows that 64 per cent of businesses in the South East feel particularly strongly about the negative impact of taxes, followed by the North West (60 per cent) and London (59 per cent).

The organisation, which represents 213,000 members, is calling for the government to freeze National Insurance Contributions and provide a National Insurance rebate for small businesses with fewer than 50 staff that take on more employees during 2010-11.

“Small firms can help to strengthen economic recovery if they are given a chance to grow and flourish, but they will need a helping hand,” adds Wright.

Related articles:Jobs figs mask scary trends, say economistsCBI demands "sustained growth"

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