This Government inherited damaging plans from the previous Government to increase the jobs tax. We responded by reducing the burden of national insurance. Since then, we have introduced an employment allowance that cuts national insurance for almost 1 million firms, and now we are going to cut national insurance for employing under 21-year-olds and young apprentices. These measures have contributed to record falls in unemployment. A rise in the jobs tax of the kind contemplated by Labour would have the reverse effect and destroy jobs.
I am very grateful to the Chancellor. Will he join me in congratulating the entrepreneurs and risk takers who, across my constituency, have stepped up to the plate since 2010—so much so that we now have 60% fewer people claiming out-of-work benefits? What further measures can my right hon. Friend deliver to ensure that the economic recovery continues in my part of North Yorkshire?
My hon. Friend is absolutely right that unemployment in his constituency has fallen. Twelve thousand extra jobs have been created in his constituency. That is because local businesses are benefiting from the employment allowance, and there is more to come with the cuts to national insurance for employing under-21s and apprentices. One of the reasons businesses are coming to his constituency is that he is such a champion of his constituency as a place to invest and employ. He goes out of his way to bring businesses and jobs to his constituency. That is why unemployment has fallen so fast there.
It seems to me that we would be wise as a nation to reduce taxation on the activities that we wish to encourage. I therefore very much welcome the reduction in employers’ national insurance, which has created jobs in my constituency, and I suspect in every constituency around the country. Does the Chancellor agree that we would do well to push on with these reductions in employers’ national insurance, which, to all intents and purposes, is a tax on jobs that discourages their creation?
My hon. Friend is a champion of businesses in his constituency. That is one of the reasons unemployment has fallen in Windsor and 2,000 businesses in Windsor are benefiting from our employment allowance. We are going to go on reducing national insurance on employing 21-year-olds and apprentices. The alternative path—the path offered by the Labour party—is to put the jobs tax up. That would increase unemployment and return Britain to the economic mess it was in when Labour was last in charge.
The lower-paid, particularly those who are earning £15,000 a year or less, should benefit from the Chancellor’s decision to raise the personal income thresholds, but will he also look at raising to the same level the threshold at which national insurance contributions are made, so that the lower-paid pay neither income tax nor national insurance contributions on £300 a week?
We increased the employer’s threshold when we came into office to reverse the damage done by the jobs tax increase proposed by the previous Labour Government. We have used the personal income tax allowance as the best method of lifting people out of income tax. It stands at £10,600, and our long-term economic plan proposes to raise it to £12,500. I am happy to work with the hon. Gentleman on other measures we can undertake to support employment and jobs in Northern Ireland. Is it not absolutely striking that on a question about the jobs tax and a question about unemployment, not a single Labour MP gets up to speak?