Tories Propose Halving Employer NI for Young People

The Conservative party has announced a significant pledge: if they win the upcoming election, they will halve the employer National Insurance contributions for young people aged 21 to 24. This move aims to make it cheaper for businesses to hire younger workers, potentially putting tens of thousands into jobs.

Currently, the flat rate for employer National Insurance stands at 15%.

Under the proposed plan, this would be reduced to 7.5% specifically for employees within the 21-24 age bracket.

The Conservatives estimate the dynamic cost of this policy to be around £2.3 billion by 2029-30, accounting for increased tax receipts from new jobs and reduced universal credit spending.

The initial, static cost is calculated at £3.25 billion.

Kemi Badenoch, a prominent Tory leader, defended the plan as “fiscally credible.” She stated that the party would release a “savings plan” to detail how the initiative would be funded. Mrs. Badenoch highlighted a “graduate recruitment crisis” and emphasized that while she'd prefer to cut rates for everyone, young people face a uniquely challenging situation in the job market.

This pledge comes amidst figures from the Office for National Statistics indicating that nearly a million young people aged 16 to 24 in the UK were not in education, employment, or training (NEET) between April and June of this year.

The proposed policy also aligns with the Conservatives' previously announced “tough love” approach for unemployed under-25s.

This earlier plan suggested that young people would be barred from moving directly from school onto benefits if the Tories regain power, with those aged 16-24 who haven't worked continuously for six months being unable to claim universal credit.

Shadow Chancellor Andrew Griffith, in announcing the National Insurance pledge, criticized Labour, accusing them of “destroying the future of our young people” through policies he termed “jobs tax, employment red tape and minimum wage hikes.” He asserted that the Conservatives would “fix that” and give young people the opportunities they deserve.

Labour swiftly dismissed the Conservative proposals as “fantasy economics” and “unfunded.” A party spokesperson accused Kemi Badenoch's party of allowing nearly one million young people to be “locked out of work or training.” They also drew a parallel to Liz Truss’s mini-Budget, implying the Tories cannot be trusted with public finances or the life chances of young people. Labour instead highlighted their own plan to invest £2.5 billion in supporting young people into work, including a national Jobs Guarantee.

Reform UK also weighed in, with Treasury spokesman Robert Jenrick stating that the Tories were merely “fiddling around the edges.” Reform UK, he added, would instead aim to reverse “Rachel Reeves’s jobs tax for all British workers,” funding this through a tax on migrants.

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