Tax burden 'will cost factory jobs'

opinion.telegraph.co.uk ^ | 27/09/2002 | By David Litterick

[dgallo51]

More than half of UK manufacturers will axe jobs next year as a response to the Government's tax rises, the Engineering Employers' Federation warned yesterday.

A survey of its members revealed that the 1pc increase in National Insurance Contributions (NICs) announced by the Chancellor in the Budget would also lead to an increasing number of firms moving production abroad.

The increase in NICs will be levied from next April. Some 53pc of the 1,000 companies surveyed said they would reduce their employment levels, 54pc said future wage increases would be lower, while 32pc said they would transfer costs abroad.

In addition, a quarter of companies said the extra burden would force them to reduce their contribution to pension schemes.

EEF director general Martin Temple said: "This confirms our worst fears about the effect of yet another cost on top of rising insurance premiums, increased pensions and the climate change levy. The Government is playing a very dangerous game with manufacturing jobs and its future competitiveness.

"The cumulative effect of these costs is leading to a substantially less welcoming environment for manufacturing and preventing the vital investment necessary to improve our productivity."

He added that the NICs increases were scheduled to be introduced just as manufacturing was likely to be picking up from the global slowdown, thus threatening any recovery.

Although half of the respondents said they would try to pass the extra costs on to their constumers, most were not confident that any price rises would still with the majority suggesting they would be forced to absorb the costs in lower margins.

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[dgallo51]

Senate Democrats holding up budget process, hiding their tax and spending plans from the public until after the election. Why? Because you can't tax economic growth into existence, and tax is what they have up their sleeves. No one starts a new business because unemployment benefits get extended.

[GailA]

High taxes also drive jobs to third world countries.

[Red Jones]

bump

[alrea]

Senate Democrats holding up budget process, hiding their tax and spending plans from the public until after the election BUMP