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Business

Red tape leads to rise in unemployment

By: KentOnline reporter multimediadesk@thekmgroup.co.uk

Published: 15:53, 16 February 2011

Jo James, Kent Invicta Chamber of Commerce chief executive

Business chiefs have blamed red tape and tax for contributing to the "disastrous" rise in unemployment across the county.

More than 1,900 people joined the dole queue last month, pushing up the total to 33,094. Unemployment among 16-24 year olds also shot up.

The Government had hoped the private sector - especially small firms - would create new jobs to compensate for losses elsewhere.

But bosses claimed it had taken decisions that worked against those hopes. The 6,700-member Federation of Small Businesses Kent and Medway called the six per cent rise a disaster and three times higher than the national average.

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It was particularly worrying that it had come even before the full impact of the closure of Pfizer and public sector cuts.

Roger House, FSB chairman for Kent and Medway, called on Kent MPs, especially in constituencies with deprived areas, to press the Chancellor for a concession in National Insurance contributions paid by Northern businesses to apply to Kent.

"This would incentives local small businesses to take on new staff and boost employment opportunities," he said.

The Treasury would still benefit from the creation of new jobs at an average salary of £25,000 through income tax and employees' National Insurance of almost £6,000 while saving the employer over £2,500 per year.

He added: "If the government is serious about the private sector and small businesses pulling the country out of recession; it cannot continue to regulate and suck finance out of businesses. They must create a commercial environment where business is valued and is confident to expand and create new jobs."

Jo James, chief executive of Kent Invicta Chamber of Commerce which covers Ashford, Canterbury and Maidstone where jobless rises were among the steepest last month (Jan), said many businesses were struggling to survive. They were laying off staff and freezing or cutting pay.

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If the Government was looking to the private sector to create jobs, it needed to do a lot more to support business.

"The continued deluge of employment legislation is just added to existing burdens put on business at a time when they an ill afford any impediments to business growth and at a time we still have a very fragile economy,†she said.

"What is concerning is the steep rise in unemployment amongst the 16 to 24 year old age group.

"The pending legislation to remove the default retirement age is just going to exacerbate the problem, with fewer opportunities for the young to enter the workplace."

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