More than 5,000 new jobs could be created in Scotland if manufacturers were given a temporary reduction in employers’ National Insurance (NI) when they take on new workers, according to BDO.
The business advice firm is today calling on political parties to show their support to manufacturers in the “final furlong” to May’s general-election.
Analysis by BDO found that a total of 5,069 manufacturing jobs could be created north of the border over the course of the next parliament if employers’ NI contributions – “known to be a real barrier to taking on workers” – were temporarily reduced.
The policy recommendation forms part of the BDO Mid-Market Manifesto, which lobbies for specific support for medium-sized businesses that are currently under-valued and overlooked by government policy.
Medium-sized manufacturers alone would create 1,449 new Scottish jobs if the policy was taken up by the new government at Westminster, according to BDO.
Martin Gill, head of BDO in Scotland, said: “Manufacturing is a vital sector for Scotland and the UK as a whole, and it is the medium-sized businesses that provide us with the biggest untapped potential in both domestic and international markets.”
“The chancellor has already shown a willingness to use targeted national insurance reliefs as a way of stimulating employment.
“The apprentices move was a step in the right direction but it does not go far enough.”
In his Autumn Statement at the beginning of December, Chancellor George Osborne announced NI relief for employers taking on apprentices under the age of 25.
Mr Gill said BDO’s proposal to extend this could “singlehandedly benefit manufacturing GDP (gross domestic product), job creation, export levels and the Treasury’s coffers”.
It is estimated that medium-sized manufacturers in Scotland employ nearly 103,000 people, generate £18.6billion in revenue and contribute £1.09billion to the total value of exports.
BDO said: “By assisting local businesses that are most likely to be exporters or supply exporters, introducing a temporary reduction in employers’ National Insurance for the manufacturing sector over the next four years will support the (UK) Government’s target of doubling exports by 2020.
“In addition, the cost to the Exchequer – estimated at £2,600 per annum per worker based on an average wage of £26,500 – when offset by the increased income tax and employees National Insurance, would result in a net benefit.”