George Osborne, the UK's Chancellor, is being urged to announce an increase in the level of social-security tax on firms in the UK as part of this year's budget in order to help increase job creation.

London-based Policy Exchange said that increasing the National Insurance Contributions in 2015 to 192 pounds per week from 157 pounds will save firms 250 pounds for every person employed. The amount is equivalent of
10,000 pounds a year. The institute is recommending an £5.4billion annual cut in National Insurance to save businesses £250 for each employee.

National Insurance Contributions are payroll tax that is borne by both workers and employers to fund state benefits. Policy Exchange, a think tank with close links to Downing Street, said that lowering the employer's share of the tax will boost the labour market and will increase wages and improve productivity. The move will cost 5.4 billion pounds to the government.

Experts said that the government should enable businesses to take on more staff, boosting recovery in the labor market. UK political parties are determining the best way to boost employment and wages as they prepare for a general election in the UK.