Tories pledge to halve employer national insurance for young people

The Tories have pledged to halve employer national insurance on jobs worked by young people if they win the next election.

The flat rate for businesses would be slashed from 15% to 7.5% for workers aged 21 to 24 at an estimated cost of £2.3 billion, the Conservatives said.

Tory leader Kemi Badenoch insisted the plan was “fiscally credible” as party officials said they would publish a “savings plan” setting out how it would be funded on Wednesday.

Kemi Badenoch said young people have a ‘much worse problem than everybody else’ (Stefan Rousseau/PA)

PA Wire

They said the move would put tens of thousands of young people in jobs, meaning that many claiming out-of-work benefits would instead contribute taxes to the Exchequer.

The “static” cost of the policy has been calculated as £3.25 billion, which officials estimate would fall to a “dynamic” cost of £2.3 billion in 2029-30 once extra tax receipts and lower universal credit spending were counted.

In a series of broadcast interviews, Mrs Badenoch said there was a “graduate recruitment crisis” that needed to be fixed as she faced questions about why the rate would be left the same for most employees.

“We are being fiscally credible. We find savings and then we spend it. If I could afford to cut it for everybody, I promise you that I would. But young people have a much worse problem than everybody else,” she told the BBC.

An estimated 981,000 young people aged 16 to 24 in the UK were not in education, employment, or training (NEET) between April and June this year, according to latest Office for National Statistics figures.

Under party proposals for a “tough love” approach to unemployed under-25s announced last week, young people would be barred from going straight from school on to benefits if the Tories returned to power.

People aged 16-24 who have not worked continuously for six months would be unable to claim universal credit, the Conservatives said.

Announcing the national insurance pledge, shadow chancellor Andrew Griffith said: “Labour are destroying the future of our young people.

“Their jobs tax, employment red tape and minimum wage hikes have seen an explosion in the cost of employing a young worker.

“We will fix that. We will slash the tax on youth jobs in half to give young people the opportunities they deserve.

“Only the Conservatives have a plan to cut taxes, cut red tape, and give young people their future back.”

Labour dismissed the plans as “fantasy economics” and “unfunded.”

A party spokesperson said: “Kemi Badenoch pretends to be on the side of young people but her party allowed nearly one million of the next generation to be locked out of work or training.

“It’s no surprise her Shadow Chancellor wants another unfunded tax cut given he co-wrote Liz Truss’ mini-Budget that crashed the economy. The Tories can never be trusted with Britain’s public finances or the life chances of young people again.

“Andy Burnham’s Labour Government is bringing back hope. We’re investing £2.5 billion to support young people get into work, including rolling out the Jobs Guarantee nationally, and helping them to build the better future they deserve.”

Reform UK’s Treasury spokesman Robert Jenrick said: “While the Tories fiddle around the edges Reform will reverse Rachel Reeves’s jobs tax for all British workers, paid for by a tax on migrants.”