There has been a warm welcome from business groups and the staffing sector for the chancellor’s announcement of a cut in the National Insurance Contributions (NICs) paid by employers of up to £2,000 a year. 

The measure is expected to take 450,000 employers, a third of all UK businesses, out of paying employers’ NICs all together. 

Head of policy at business lobby group The Forum of Private Business says the new Employment Allowance, due to be introduced in 2015, is “a real boon for smaller businesses” and “has got to be good for employment figures”. 

“It means they’ll be able to employ an additional employee earning £22,400, or an additional four employees working full time on the adult minimum wage without any increase in their employer NICs,” he adds. 

Mike Cherry, Federation of Small Business (FSB) policy chairman, tells Recruiter: “We really do expect most small businesses to look at that seriously and consider whether it will help them take on in particular young people.” 

Nigel Heap, managing director at Hays UK & Ireland, also welcomes the measure: “This will support the small companies across the UK. It should ease the financial burden of a new hire and encourage them to take on professionals who can drive their business growth.”

Peter Lowman, MD of LoveWorkLife, a consultancy that specialises in the staffing sector, also welcomes the measure: “If someone is starting to see things coming together in their business and are thinking about taking on a member of staff, this will encourage them to do it.”