Extra costs imposed by the UK government can choke the growth recovery says CBI

December 22, 2015
According to the CBI Chief, Carolyn Fairbairn, the businesses are very eager to employ additional employees, but the additional costs that are imposed by the UK government can hinder the growth recovery of the country. 

Extra costs imposed by the UK government can choke the growth recovery says CBI

The businesses of Britain seek to employ additional employees to maintain the growth as the economy of the country performs well but it is feared that the additional taxes and the costs which are imposed by the UK government on the jobs would make it very expensive to hire additional employees. Warned the British Industry Confederation (CBI).

The jobs are at record high rate, and wages are increasing and the demand is still increasing. The research by the CBI reveals that 43% of the companies expect to hike their number of employees in the next year 2016, with many of them finding out for permanent employees.  Income would also keep rising, as 51% of the companies are expected to increase the wages.

But the additional costs that include the apprenticeship tax and the higher minimum wages can stop them from recruiting.  Only 16% of the businesses is supporting this apprenticeship tax while another 47% is saying that it would be expensive.    

The tax charges big businesses a tax of 0.5% of their payroll, And as per Chancellor George Osborne, it would go into fund for paying to train the apprentices.  The charge would bring in 11.6 billion over the next five years, but the businesses are complaining that it is the tax on the employment.

As per the CBI Director General, Carolyn Fairbairn, the firms would face the rising costs, through the apprenticeship tax, and the higher minimum wage and the unchanged rates of business; all these are acting as the increasing haul that can hinder the growth of the country.

If no changes are made to the proposal of increasing the minimum wage to 9 pounds per hour by the year 2020, the research reveals that around 51% of the companies could increase the prices for covering the bill.  While half of the companies said that the rule is a key problem, around 46% of them said that the skilled workers shortage is also a big challenge.

As the businesses looking to employ additional employees from abroad, the proportion worried about the tighter visa rules has almost doubled in the previous year from 18% to 31%.

According to Neil Carberry, CBI, it is not only the limit which is limiting the access to overseas talent but the present restriction on the immigrations is putting a negative effect on the competitiveness of the UK. The rule shall support the companies in creating the jobs and the generating opulence policy of migration is failing this test.

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