Tories propose halving employer National Insurance for under-25s
The Conservative Party plans to halve National Insurance contributions for employers hiring workers aged under 25, with Kemi Badenoch set to unveil the "rescue package for young people" on Wednesday. The party claims this £2.3 billion initiative is essential to reverse a youth employment crisis, with youth unemployment rising by 174,000 since Labour took office and now standing at 750,000 young people.
Under the new plan, employer NI for 21-24 year-olds would be cut from 15 per cent to 7.5 per cent, allowing businesses to retain an average of £1,545 per young worker. The package also includes measures to get young people off benefits and is intended to counter Labour's tax increases on employers, including a £25 billion NI hike and cuts to the threshold for paying employers' NI. Workers aged 21 and under already benefit from a zero rate of employers' NI from the previous government.
- Tories plan to halve employer National Insurance for under-25s, costing £2.3 billion
- Youth unemployment rose 174,000 since Labour took office to 750,000 total
- Welfare reforms bar young people from immediate unemployment benefits and restrict sickness payments
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National Insurance is a tax that employers pay on staff wages. In Britain, employers currently pay 15 per cent of this tax for workers aged 25 and over, though younger workers aged 21 and under already pay zero. The Conservative Party is proposing to halve the rate for workers aged 21 to 24, from 15 per cent to 7.5 per cent.
The party argues this cut would help businesses afford to hire more young people, saving them around £1,545 per young worker on average. They describe the proposal as a £2.3 billion initiative to address what they see as a youth employment crisis following tax increases on employers introduced by the Labour government.
Youth unemployment in Britain has risen significantly, with the party claiming 174,000 more young people are out of work since Labour took office and 750,000 are currently unemployed. The Conservatives argue that high employer costs discourage businesses from hiring young workers, and cutting National Insurance would reverse this by making it cheaper to employ them.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Youth unemployment has risen sharply to 750,000 since Labour took office, and the Conservatives argue that reducing employer National Insurance directly removes a financial barrier to hiring. By allowing businesses to retain an average of £1,545 per young worker, employers can more readily afford to expand their workforce, particularly for workers entering the labour market. The principle is proven, with under-21s already benefiting from zero NI, and at £2.3 billion this represents a focused intervention to address a genuine crisis without bureaucratic overhead.
The case against
Whilst the youth employment challenge is real, £2.3 billion represents substantial public spending with no guarantee it will create genuine jobs rather than subsidise businesses that would hire regardless. Critics argue the policy addresses symptoms rather than causes—proper investment in skills, training and education would have more lasting effect—and point out that the measure fails to explain how public services will be funded after reversing part of Labour's NI increase. Additionally, the age-based targeting ignores employment difficulties for workers over 25 and assumes employers will translate savings into hiring rather than increased profits.
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Originally published by Daily Mail as “Tories to slash ‘Labour’s jobs tax’ IN HALF to boost youth employment – as Kemi Badenoch warns ‘the world is getting worse for young people’”.