Take up of the Government’s national insurance holiday scheme is much lower than expected, Treasury statistics have revealed.
The scheme, which was revealed in the June 2010 Budget, was expected to benefit 400,000 over a three year period, but the figures reveal that between September 2010, and November 2011, just 10,000 firms signed up.
The scheme exempts qualifying new businesses in eligible regions from up to £5,000 of employer national insurance contributions for each of the first ten employees hired in the first 12 months.
The scheme was criticised at launch due to the regional constrictions, and now Labour’s shadow exchequer secretary to the Treasury, Owen Smith MP claims the scheme has been a ‘total flop’.
“The one flagship policy that could have made a difference has been a total flop, supporting just one in forty businesses who were promised help. And shockingly, the government is set to spend twice as much on admin costs than it has so far paid out in support to businesses,” he said.
The Treasury figures show that while £6 million was paid out to the 10,000 small firms, administration costs are estimated to be double that at around £12 million.
