Small firms would employ new staff if the Government reduced National Insurance contributions (NICs), according to new figures from the Federation of Small Businesses (FSB).

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“Small businesses want to employ but have told us they need incentives to do so,” said FSB Cambridge East chairman Dick Jarvis.

“The Government must extend the NIC holiday to existing businesses if small

firms are to take on new staff and so help tackle high unemployment.”

Nearly a third of respondents to the FSB survey said reducing NIC payments for the first six months of employment would encourage them to take on more staff, and 11 per cent said extending the NICs holiday scheme would be an incentive.

The survey also found that small businesses continue to be stifled by the challenges that affected them during the recession – including late payments from other firms and a lack of finance from the banks.

“While our members have told us the situation has improved slightly, these same issues are now preventing small firms taking on staff – crucial if the country’s small firms are going to help to secure and promote recovery,” said Mr Jarvis.

“It is not only imperative that the Government creates an environment for job creation, but that the banks lend to small firms, and businesses are paid on time, to give small firms the confidence they need to grow their business and employ.”

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