Cameron admits National Insurance holiday scheme 'didn't work'

The prime minister has confessed that the government's scheme to exempt new companies from National Insurance contributions (NIC) has not achieved the success ministers hoped for. 

Introduced last September, the initiative aimed to encourage start-ups to employ more people by allowing entrepreneurs in certain areas of the UK to not pay NICs for their first 10 employees.

But speaking at an event at Intuit's headquarters in Maidenhead on Thursday, David Cameron said: "The scheme has not worked as well as we hoped. It was too complicated and too targeted at specific businesses. It resulted in around 1,000 jobs but that was not enough.

"You can come up with all the schemes in the world but there's no scheme that's as good as controlling spending and keeping taxes down. Just like every business needs to control costs, governments aren't any different."

Last October, Cameron told the House of Commons that only 7,000 small businesses have taken part in the initiative despite the government predicting that 400,000 would do so.