National Insurance surcharge could stifle economic growth and business investment

A National Insurance surcharge on employers hiring graduates, as proposed in HEPI’s Undergraduate fees revisited report, could hinder both economic growth and business investment in the UK, says NCUB.

Rosalind Gill, head of policy and engagement at National Centre for Universities and Business (NCUB), said: “The government, universities and other stakeholders of the higher education system must carefully consider the full range of options available to address the financial challenges in the sector. However, we urge caution on the suggestion of a National Insurance surcharge for employers that recruit graduates.”

Gill continued: “The proposal to raise a new 1% National Insurance surcharge could go counter to the overall national aim of economic growth.  There is an urgent need for funding for universities to be put on a more secure footing, but equally the UK must become a more competitive place for businesses to invest in a difficult global climate.”

Gill concluded: “Raising a National Insurance surcharge for employers could have a range of unintended consequences. Employers already make significant contributions to higher learning, including working with universities on course design, placements, apprenticeships, and employability, as well as making investments in the lifelong learning of people beyond the three years of a degree. Further complicating the taxation system with an additional surcharge would not help employers to genuinely invest in the skills they need, and will not help address the challenges being faced in the university sector.”