Tory tax package to boost jobs
Updated on 11 November 2008
Conservative leader David Cameron announces a £2.6bn package which he says will create 350,000 new jobs.
Conservative leader David Cameron today announced an estimated £2.6bn package of tax cuts which he claims would create around 350,000 new jobs over the next year.
The scheme gives employers a tax break using money that would otherwise be spent on unemployment benefits.
Under the proposals, private sector employers who hire a new employee who has been claiming unemployment benefit for more than three months would receive a credit of up to £2,500 against employers' national insurance contributions.
'It (the government) can't walk on by saying there's nothing we can do. It's got to be active, on people's side and do everything it can to help.'David Cameron
Cameron announced the moves in a press conference early this morning. He told reporters: "During these tremendously difficult times, I am 100 per cent clear about the role of government.
"It can't walk on by saying there's nothing we can do. It's got to be active, on people's side and do everything it can to help."
But an hour later Gordon Brown attacked the proposals as an unfunded tax cut at his monthly press conference.
"This is not a funded tax cut, the money is not there to fund what is proposed," he said.
"It is not serious for the problems we face. I really do think we need serious policies for serious times."
The Conservatives, who regularly attack the government over Britain's public borrowing, say the policy is revenue-neutral.
George Osborne
'It (the Tory tax plan) is not serious for the problems we face. I really do think we need serious policies for serious times.'Gordon Brown
The government's Freud report into welfare reform estimated moving a person off unemployment benefit into work saves the government £8,100 over a year.
The Tories have settled for the lower figure to pass on to employers as estimates from America and Canada, where similar schemes have been used, suggest two in three jobs that qualified for the tax break would have been created anyway.
Last year 1.1 million people who had been claiming unemployment benefit for more than three months found work. Based on the pattern from the last recession, the Conservatives say this number could fall as low as 700,000.
The party estimates their plan would increase this by 50 per cent, creating around 350,000 additional jobs.
David Cameron's press conference
This would, they say, give £2.6bn in tax cuts and save the same amount in unemployment benefits and lost tax revenues.
The payment would only be available to companies who made no redundancies in the three months before or after claiming the credit.
Gordon Brown hinted yesterday that the government was considering tax cuts. Alistair Darling is expected to set out the treasury's spending plans in the pre-budget report later this month.
Figures due to be published tomorrow are expected to show another sharp rise in unemployment.
