David Cameron says the rise in NI will cut jobs

Conservative leader David Cameron has attacked Labour's planned increase in National Insurance as a "jobs tax that will kill the recovery".

In heated exchanges at prime minister's questions, Mr Cameron said 68 business leaders were now backing Conservative plans to scrap the planned rise.

Gordon Brown said the 1% rise in National Insurance from April 2011 was vital to maintaining public services.

The Liberal Democrats are also opposed to the increase in National Insurance.

'Economy killer'

Mr Cameron told the Commons: "Is the prime minister really telling us he knows more about job creation that business leaders employing nearly one million people around the country?"

The public must make up their mind - do they want the public services to be maintained, or the Conservative policy of putting public services at risk Gordon Brown

He added that the rise could "wreck" the continuing economic recovery, and that Labour should focus instead on reducing waste in the public sector.

Later on a visit to the headquarters of bakers Warburtons in Bolton, Mr Cameron added that "National Insurance basically hits the cost of every job, and everyone in the pay packet".

He said that if Labour carried out the £11bn of public sector efficiencies it has pledged to do from 2011 this year instead, then the rise in National Insurance would be unnecessary.

"Taxing people to pay for government waste is wrong, it would be an economy killer, a recovery killer, and a jobs killer," said Mr Cameron.

'Risk to services'

Mr Brown said the estimated £6bn the increase in National Insurance would raise was needed to maintain and improve schools, hospitals, the police and other public services.

He also said that cutting back on the public services the rise would fund risked causing a "double dip recession".

"The public must make up their mind - do they want the public services to be maintained, or the Conservative policy of putting public services at risk?," said the prime minister.

FROM THE WORLD AT ONE More from The World At One

Thirty more business leaders said on Wednesday that they backed the Conservatives' pledge to scrap some of Labour's planned increase in National Insurance, bringing the total of publicly declared business supporters to 68.

The latest signatories include the bosses of Fujitsu Communications, Travelodge, and Premier Oil.

Other business leaders who have signed up, include the heads of Easyjet, Corus, House of Fraser, Sainsbury's and Marks & Spencer.

Mr Brown earlier said they had been "deceived" by the Conservatives, but would not be drawn on this comment in the Commons when pressed by Mr Cameron.

One of the signatories, Luck Johnson, founder of private equity group Risk Capital Partners, said the prime minister's claim was "insulting".

"I think businesses know very well what's going to encourage them to employ more people," he told BBC Radio 4's The World at One programme.

"And what will encourage them to employ more people is to reduce the stealth tax - which national insurance is - on jobs."

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