Increasing National Insurance is the worst thing anybody could do to the economy

Gordon Brown doesn't seem to realise that he's just got it wrong on the whole National Insurance debate. Even when members of his own Business Council say he's wrong and come out in support of the Tories, the Prime Minister is still adamant that he is right and they are wrong.

But he is wrong; increasing National Insurance is possibly the worst thing anybody could do for the economy at the moment. The plan to increase National Insurance flies in the face of all economic sense. It relies on the idea that is better for government to spend money than it is for business. Government spending will not help stimulate growth and get us out of this recession. Growth in the economy will come from the private not public sector. That is why it is completely senseless to put an extra tax on business at the very time we need business to be thriving.

What's more the increase in National Insurance is not just an extra tax on an already overregulated and overtaxed (the UK has got progressively less competitive under Labour), it is a tax on jobs. Whilst the effects of the recession are now most often calculated according to the level of debt we've reached, we must not forget the human costs of the recession as well - particularly unemployment. So why is the government introducing a tax that even the government's own Treasury minister, Stephen Timms, admits will cost jobs? We need more people working, not less.

As for Lord Mandelson's claim that the only people complaining about the VAT rise are 'metropolitan CEOs' it is big business more tha anyone else that can afford the rise. It's small businesses who are hit most. An increase in National Insurance will hit a company with half a dozen employees more than it will hit big firms like M&S.

Labour aren't going to win this debate. Gordon Brown should stop digging himself in to an even bigger hole.