Call to extend tax breaks

The government should extend a National Insurance tax break to promote private sector growth, Labour said today.

Under the scheme set up last year, new businesses outside of London, the south-east and east of England were offered a tax holiday worth up to £5,000 for each of their first ten employees.

Despite the Treasury setting aside £1 billion to help an estimated 400,000 firm, just over 10,000 companies have taken advantage of the tax holiday at a cost of £6 million and supporting only 12,400 jobs, Labour said.

According to Treasury figures, just £6m was paid out to small firms to support 12,400 jobs, while the administration costs of the scheme are around £12m.