One of Britain's most influential business bodies, the Confederation of British Industry (CBI), has urged Chancellor John Healey to cut taxes for employers in the upcoming Budget. The CBI's report, published on Tuesday, suggests these cuts are necessary to address the crisis of young people not in employment, education, or training (Neets).
The CBI stated that Britain's youth unemployment crisis, with over a million young people currently classed as Neet, is a "symptom of a wider cost of doing business problem." The group called for a reduction in employers' national insurance contributions (NICs), proposing either a cut to the headline NICs rate from 15% to 14% or an extension of a NICs exemption to workers under the age of 25.
Rain Newton Smith, chief executive of the CBI, commented that "young people have a tremendous amount to offer, yet too many are locked out of the labour market." The report also highlighted that higher NICs, increases to the national living wage, new costs from the Employment Rights Act, and wider pressures from energy bills and borrowing are hindering recruiters.
The CBI's research indicated that a one per cent cut to the 15% NICs rate could cost up to £9.8bn, while raising the salary threshold for firms to pay the tax by £1,000 would cost approximately £3.9bn. The report also made demands regarding workers' rights, including a 52-week reference period for guaranteed hours contracts and a "low hours" threshold of no more than eight hours a week under the Employment Rights Act.