Why Tory opposition to a ‘jobs tax’ would reward the rich

Much has been made by the Tories of Gordon Brown’s apparent ‘jobs tax’, the proposed rise in National Insurance for people earning over 20,000. For all the genuinely progressive viewers tuning into the Leaders’ debates over the last three weeks, the consistent attacks made by Cameron on this policy, and the consistent failure of Gordon Brown to defend it, has become nothing short of infuriating.

The Tory claims that a National Insurance rise will be a tax on jobs and therefore reduce employment are not only completely without foundation, but also represent a regressive attack on a policy that is in fact one of the more progressive measures to be announced by all three Parties during the election campaign.

The Tory argument, backed up by some of the richest and most profitable businesses in the country, is that rather than place an additional burden on private business through the proposed 1% increase in National Insurance contributions, this money should rather be generated through ‘efficiency savings’ across government. A letter sent to the Telegraph by over twenty business leaders, including the likes of GlaxoSmithKline and Tullow Oil, supports Tory plans to stop the NI rise, arguing that it is in the interest of ‘protecting jobs’.



But it is clear that Tory scare-mongering about the ‘jobs tax’ and big business’ apparent concern for people’s jobs simply does not stand up under closer scrutiny. Firstly, there is no credible evidence to suggest that required rises in employers’ contributions to NI will actually lead to a reduction in employment. A Guardian analysis of the six largest companies shows that increases in NI since 2003 have had no impact on levels of employment, and in the vast majority of cases, employment has in fact risen. For example, though social security costs for Marks and Spencers have increased by $20 million since 2003, they have employed 10,500 more people.

The real reason for big business opposition to increases in NI is therefore not about jobs and people’s livelihoods, upon which it would have no impact, but rather out of a concern for their own profit margins. Despite the PR offensive over the past few years that has attempted to portray big business as socially responsible, unfortunately their priorities still remain relatively unchanged. Marks and Spencers is prepared to spend 15 million on a ‘welcome package’ for its new boss Marc Bolland, but decries the estimated 10 million extra spend on National Insurance as ‘anti-jobs’. Needless to say that many of the same businesses in the past have opposed the minimum wage and have pushed through thousands of redundancies for British workers due to the lucrative prospect of cheap labour abroad.

It is a telling sign of the priorities of big business that rewarding the richest is upheld as just and ‘necessary’, whilst making a contribution to the public deficit reduction is lambasted.

Under the veneer of the Tory opposition to NI increases to ‘protect jobs’ is the same old predictable and regressive motivation – to protect the interests and the profits of big business and the rich, and make up for this through making real cuts in jobs for hundreds of hard-working people on modest wages across the public sector. It’s not fair, it’s not right, and it’s not progressive.