A reversal of next year’s proposed National Insurance Contributions (NIC) increase along with a cap on non-EU economic migrants were among the measures announced in the Queen’s speech yesterday.

On the reversal of the planned 1% rise in NIC contributions, Kevin Green, chief executive of the Recruitment and Employment Confederation (REC), says: “Recruiters will be delighted that the effect of the rise in National Insurance Contributions will be mitigated. This tax on jobs was opposed by the REC and all business bodies as it would have added cost onto new jobs.”

David Frost, director general of the British Chambers of Commerce, adds: “We are pleased that the government recognises the importance of reversing the rise in employers’ NICs. The partial roll-back they have agreed is a very positive step, but in order to encourage employment and business growth, the government should go further and scrap the rise in its entirety.”

Meanwhile, the cap on non-EU economic migrants allowed to work in UK, could prove risky, warns Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD).

“The existing points based managed migration system already prevents unskilled migrants from outside the EU entering the UK and restricts entry of those with certain skills. If a cap is to have an additional impact on migrant numbers it will at some point bar entry to migrants with skills that UK employers need.

“Unless the government can somehow guarantee that employers will be able to meet such need from within the UK - which is a big ask, given this country’s long standing difficulty in boosting skills and employability - the result will be some combination of higher wage costs, higher prices in the shops, and slower economic growth.”