The Conservative Party announced on Tuesday afternoon that it would halve employers' national insurance contributions for workers aged between 21 and 24. This new pledge, valued at £2.3bn, will reduce the tax rate for this age group from 15% to 7.5%.
Party officials stated that earnings above £50,270 for these workers would still face the standard rate. This change aims to address youth unemployment and smooth a 'cliff edge' as employers currently do not pay national insurance for workers under 21.
The announcement precedes a major speech by Tory leader Kemi Badenoch at the Conservative Party conference, where she is expected to announce "multiple" tax cuts, with national insurance and inheritance tax taking centre stage. Badenoch has previously stated that any tax cuts would be fiscally responsible and encourage work.
Shadow Chancellor Andrew Griffith criticised the governing party, stating Labour was "destroying the future of our young people" due to previous increases in employers' national insurance contributions. Griffith also indicated that Labour would reverse plans for mansion taxes and scrap the packaging tax.
Badenoch also warned that an early election could result in a hung parliament, citing polling that shows close margins between Reform UK, the Conservatives, and Labour. A party spokesman described reports of unannounced tax cuts as "speculation."