BRITAIN — Wes Streeting has called for targeted cuts to employers’ national insurance contributions to incentivize hiring young people. He told the Sunday Times there should be a 'targeted reduction' of employers’ national insurance contribution as a way to 'actively incentivise' hiring, particularly of young people.
A report by former cabinet minister Alan Milburn found that a lack of hospitality jobs was contributing to high youth unemployment in Britain. The report pointed to a halving of vacancies in the hospitality industry over the past four years alone. Analysis shows Britain has the third-highest rate of 16- to 24-year-olds who are not earning or learning among rich European countries.
In 2024, the rate of national insurance paid by employers was increased from 13.8% on each employee’s salary to 15%. The starting threshold for employers’ national insurance was also lowered from £9,100 to £5,000. The measure aimed to raise £25bn a year. Businesses said the national insurance increase disincentivised hiring lower-paid and part-time staff.
Work and pensions secretary Pat McFadden suggested he disagreed with the view that national insurance increases disincentivise hiring. He said in a television interview that businesses already do not have to pay employers’ national insurance for workers under 21. 'Now, it’s a fair point of debate to say maybe we should expand that or do something with it, but like every other call for a tax change, there’s a cost to these things. You have to net these things off,' McFadden said. He added, 'We have seen NHS waiting lists fall. This is important because falling waiting lists are a labour market measure too.'