National insurance is a 'tax on jobs', warn Sir Terry Leahy, Julie Meyer and Lord Bilimoria

National insurance, immigration caps and burdensome regulation are the reasons why the UK economy is stagnating, business leaders said today.

by Elizabeth Anderson
Last Updated: 29 Jan 2015
Speaking at the London preview of the International Festival for Business, a 61-day event taking place in Liverpool next year to encourage overseas investment, business leaders including ex-Tesco boss Sir Terry Leahy said urgent action needs to be taken to bring growth back to the UK.

Lord Bilimoria, the founder of Cobra Beer, warned that UK taxes are ‘far too high’, especially national insurance, and that's deterring start-ups from hiring. 'It’s a tax on jobs. We are capable of innovation but businesses need more support,' he said.

‘Businesses say the biggest cost is the money they pay the government,’ Julie Meyer, founder and CEO of Ariadne Capital, added. ‘Why are we taxing the creation of jobs with national insurance?’

The UK is currently on track for a triple-dip recession after official figures showed the economy shrank 0.3% in the last three months of 2012. Credit ratings agency Moody’s has also stripped the UK of its AAA rating for the first time since 1978, forecasting that growth will remain ‘sluggish’ over the next few years.

‘We need more spending on infrastructure, we need less regulation, and we need to promote competition in every corner of the UK,’ Leahy said. ‘We need to celebrate business so that international firms know they’re welcome.’

The Coalition’s immigration policy was also criticised. The government is currently steaming ahead with an immigration clampdown, which will cut the net migration into the UK from more than 200,000 to tens of thousands. Critics say the policy is deterring skilled migrants and students from settling in the UK. The latest figures from the Office for National Statistics showed a 26% fall in the number of student visas in the year to September 2012.

Karan Bilimoria said: ‘Having an immigration cap is not a good idea. We include students in our immigration figures. We should not do that. They bring a lot of talent and growth into the UK, and that’s what we need. We’re crying out for a growth strategy. The Commons has been debating it but sadly it’s too late and we’ve lost our AAA rating.’

The International Festival for Business 2014 aims to bring £100m of inward investment and 250,000 visitors to Liverpool when it is launched next year. ‘It’s a chance to show the world that we are open for business and will create new opportunities for our high-quality home brands,’ said deputy prime minister Nick Clegg.

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