Tom Gordon grills expert witnesses on potential damage of National Insurance increases on manufacturing and research sector

Tom Gordon, recently elected to the Science, Innovation and Technology Committee, asked a question today at the first public meeting of the committee since the election. Tom questioned a panel of experts from the business world on the potential impact of the rise in employers’ National Insurance Contribution included in Labour’s budget on Research and Development (R&D) intensive businesses. 

In reply, the experts talked about how startup businesses are often loss making in their early days, and that the changes in the budget would mean they would need to raise more money faster, whilst waiting longer to see a return on investment. Worries about losing investment in Britain were also brought up. The impact on the manufacturing industry was also mentioned, as many companies are locked into supply chains, whilst also being unable to raise prices to absorb higher costs associated with the budget. It was also added that it is often hard for Small and Medium Enterprises (SMEs) to have their voices heard, as they are often very busy. 

In recent days, Tom has called for the Labour government to do more to support small businesses and reduce the impact on the budget on GPs and farms, which will be affected by the increased National Insurance Contributions and Inheritance Tax changes. 

Tom also asked if the witnesses knew of anyone already taking steps to mitigate the effects of the new policies. 

Commenting, Tom said: 

“It was very interesting to talk to these witnesses today. They brought an idea of just how Labour’s new policies will affect businesses, including SMEs and startups, that are absolutely vital to our economy. 

“Labour need to make sure that they are properly listening to all businesses. Hitting them from so many different directions is wrong, and just at the time when they are claiming to be putting growth first, they will instead be discouraging investment, research and development, that help put Britain on the world map. 

“We should not be stifling our economy. The government has rightly identified growth as important, but their actions are doing the opposite.”

ENDS

You can find the clip of Tom speaking in the chamber here: Parliamentlive.tv - Science, Innovation and Technology Committee, with the relevant part beginning at 10:55.36, continuing on until 10:02.