CUTTING employers’ National Insurance contributions when firms take on new workers could create around 7,500 jobs in Yorkshire it has been claimed.

Business advice and accountancy firm BDO has called for a temporary reduction in NI rates from this year for manufacturers to encourage more recruitment.

The call is part of the BDO Mid-Market Manifesto, which lobbies for specific support for medium-sized businesses that are currently overlooked by Government policy.

It calls on political parties to show their support to manufacturers in the run-up to the General Election in May.

New BDO analysis found that 7,597 new jobs could be created in Yorkshire during the course of the next parliament if employers’ National Insurance, seen as a barrier for taking on workers, was temporarily reduced for manufacturers.

The targeted relief would stimulate employment by offering employers 100 per cent relief in 2015 for new workers, with this reducing by 20 per cent each year until the relief reaches zero or the scheme ends. It is estimated that medium-sized manufacturers alone would create more than 2,600 new jobs if the policy was adopted.

Terry Jones, partner and head of BDO in Yorkshire, said: “Manufacturing is a vital sector for the region and the UK as a whole, and it is the medium-sized businesses that provide us with the biggest untapped potential in both domestic and international markets.”

BDO said medium-sized manufacturers currently employ more than 192,000 people regionally, generate £29.2 billion in revenue and contribute £1.3 billion to the value of Yorkshire exports.

Assisting local businesses that are most likely to export or supply exporters through a cut in NI for the manufacturing sector over the next four years would support the Government’s target of doubling exports by 2020.

BDO said the cost of the move would be offset by the increased income tax and employees’ National Insurance payments, resulting in a net gain for the Treasury. In the recent Autumn Statement, Chancellor George Osborne announced the lifting of National Insurance for employers taking on apprentices under the age of 25.

Terry Jones added: “The Chancellor has already shown a willingness to use targeted national insurance reliefs as a way of stimulating employment. The apprentices move was a step in the right direction, but it does not go far enough. This policy could single handedly benefit manufacturing GDP, job creation, export levels and the Treasury’s coffers.”