TaxCorporate TaxCambridge fellow slams NI detractors

Cambridge fellow slams NI detractors

Dr Mark Hayes says those railing against the proposed rises to national insurance are missing the big picture

An economics experts has hit out at business heavyweights’ protests against
the
planned
National Insurances rises
.

Dr Mark Hayes, a fellow at Robinson College, Cambridge said detractors were
not seeing the big picture, because the UK economy would balance out the
changes.

“How can the captains of industry, great employers of labour be wrong about
the effect on employment of an increase in national insurance?” Dr Hayes said.

Dr Hayes said there would be two knock- on effects of an NI rise:

Domestic labour would be more expensive compared to foreign and more labour
intensive companies would need to raise prices relative to the less
labour-intensive.

The first movement could be offset by reducing exchange rates.

Dr Hayes said: “The second effect may in theory lead to a transfer of
employment from one sector to another…. All change has implications for the
composition of employment, which is in constant flux, and the increase in NI may
indeed affect employment in particluar companies, some losing, some gaining
jobs.

“The mistake is to argue that a change in average labour costs can affect the
level of employment as a whole.”

Further reading:

National
Insurance: a pretty odd debate

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

1m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

3m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

4m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter