Reversing UK employment tax rises ‘would do little to help young people find jobs’

An apprentice bricklayer. The report says employers should have access to targeted workplace subsidies to get more young people into work. Photograph: Peter Muller/Getty/Image Source View image in fullscreen An apprentice bricklayer. The report says employers should have access to targeted workplace subsidies to get more young people into work. Photograph: Peter Muller/Getty/Image Source Reversing UK employment tax rises ‘would do little to help young people find jobs’ Resolution Foundation calls for extra funding for apprenticeships and increase in number of youth support grants Ministers should reject calls to reverse employment tax increases as a way to boost jobs for young people in favour of extra funding for apprenticeships and increasing the number of youth support grants, according to a leading thinktank. The Resolution Foundation said an in-depth study showed a cut in employers’ national insurance contributions (NICs) and a reduction in the minimum wage for under-21s – measures demanded by business groups – would do little to promote the chances of younger workers finding a job. The independent thinktank said employers should have access to targeted workplace subsidies as “the most cost-effective way of supporting them to get young people into work”. The report said that, unless action is taken, a high number of young people not in employment, education or training (Neets), which passed 1 million this year , risked scarring the living standards of a generation. Last month, Alan Milburn, a former health secretary, presented the first part of a government-commissioned report on why an increasing number of people aged 16 to 24 have become Neets. The Resolution Foundation’s report – entitled Take a chance on me – is expected to influence Milburn’s final recommendations when he publishes a follow-up report in the autumn. Business lobby groups have complained that tax rises introduced by the chancellor, Rachel Reeves, since Labour returned to power have raised the costs of employment, with young people bearing the brunt of hiring freezes. Last month, Cressida Hogg, the chair of the employer’s lobby group the Confederation of British Industry, said the minimum wage was fuelling youth unemployment by making it too expensive to hire people at the start of their careers. In a separate intervention, the former prime minister Tony Blair said rises in the minimum wage for those under 25 years old would deter businesses from hiring younger people. However, the Resolution Foundation said analysis of spending on a range of support for young workers showed reversing tax rises “would be wasteful and ineffective”. The thinktank’s report said: “It has been argued that the 2024 changes to employer NICs put firms off hiring young people. But repealing them would have an underwhelming effect on youth employment – the vast majority of under-21s attract no employer NICs anyway. “Scrapping employer NICs for under-25s entirely would be very expensive – costing £5.