Chancellor John Healey is reportedly preparing measures aimed at reducing the cost for businesses to hire individuals under the age of 25. These proposals are expected to be unveiled in the Budget on 28 October.
The initiative seeks to address the number of young people not in employment, education, or training (Neets) and alleviate pressures on businesses. Potential options include extending reliefs on employers’ National Insurance contributions or providing a tax holiday for companies after hiring a young person.
Business leaders have urged Healey to tackle business costs to reverse a rise in youth unemployment since the pandemic. The Confederation of British Industry and other industry groups have suggested that reducing National Insurance contributions could incentivise businesses to recruit more young people.
Youth unemployment reached an 11-year high in the middle of this year, and the number of Neets surpassed 1 million before decreasing. An interim report indicated that the cumulative annual cost of the Neets crisis to the UK economy is approximately £125 billion per year.