Badenoch vows to halve national insurance for young workers in bid to tackle youth unemployment

Kemi Badenoch has pledged to halve employers’ national insurance contributions for workers aged 21 to 24, cutting the rate from 15 per cent to 7.5 per cent on earnings over £5,000 a year.

The Conservative leader said the policy would “give young people their future back”. The Times reports that at present employers pay a nil rate for under-21s and apprentices under 25, but pay the standard rate beyond that — and that halving the rate would let a business keep an average of £1,545 a year for every young worker.

The policy is expected to cost the exchequer £2.3bn a year. The Conservatives say that figure includes savings from lower universal credit payments if more young people are employed. Jobs paying more than £50,270 a year would still face the standard 15 per cent rate, in a move the party says is designed to “smooth the cliff edge” at 21, when contributions jump from nil to 15 per cent.

Almost one million people aged 16 to 24 are classed as not in education, training or employment. Badenoch says a “single wasted year” costs a young person £52,000 in lifetime earnings, rising to £293,000 for someone out of work and education between 18 and 24.

“Young people have a much worse problem than everybody else,” Badenoch told the BBC, pointing to a graduate recruitment crisis and unemployment rising above the EU average for young people. She said the plan replaces last year’s proposed “first jobs bonus”: “You can’t give people a first jobs bonus if they’re not getting a first job.”