Budget must focus on youth jobless, business chiefs say
- 23 February 2014
- From the section Business
Chancellor George Osborne must include measures in the Budget in March to address youth unemployment and training, says the British Chambers of Commerce.
The business group is calling for a £100m scheme to encourage companies to hire the jobless young or apprentices.
And it wants tax breaks to encourage investment in young entrepreneurs.
The Treasury said youth unemployment was falling, and that further measures would bring the jobless figure lower.
There are currently almost 920,000 young unemployed people in the UK.
The unemployment rate for 16 to 24-year-olds is 19.9%, according to figures released by the Office for National Statistics last week. Youth unemployment is now at its lowest level since the spring of 2011.
The total number of jobless people is 2.34 million - or 7.2%.
BCC director general John Longworth said while youth unemployment had improved slightly, young people were almost three times more likely to be unemployed than members of the workforce as a whole.
"If the chancellor wants to avoid a lost generation among today's 16 to 24-year-olds, he must use the spring Budget to help business take on and train up young people," he said.
Mr Longworth added that the government should not wait until after the next general election, scheduled for May next year.
"The crisis of confidence separating Britain's employers and young people can't wait for political posturing or the electoral cycle," said Mr Longworth.
"Getting young people into employment is vital, pressing and easily affordable right now."
Speaking to BBC Breakfast, he added that the issue was "important not just for young people but also for the country in general".
The BCC said concrete measures were needed to promote business investment in youth.
It is proposing a £100m "future workforce grant" scheme, which could offer £1,000 grants to businesses that take on young workers.
It is also calling for a two-year extension to the apprenticeships grant for employers scheme to help create 800,000 new apprenticeships.
And it wants the government to increase tax relief available through the enterprise investment scheme from 30% to 50% for investors in businesses run by people under the age of 24.
A Treasury spokesperson said the government's "long term economic plan is working", and that there were a number of planned measures to deal with youth unemployment.
"The economy is growing, there are 1.3 million more jobs and unemployment has come down sharply, But the job is not done - while youth unemployment is falling, it is still too high," the spokesman said.
"So we are creating long term career opportunities for people to get on in life, including delivering half a million apprenticeships."
They also said the government was supporting businesses by giving a £2,000 Employment Allowance towards their National Insurance Contributions Bill, from April this year, which they said would benefit 1.25 million firms.
"From April next year, we will abolish employer National Insurance for the under-21s altogether," they added.
A Labour Party spokeswoman said the number of young people "on the dole for over a year has doubled under David Cameron".
"The government should heed Labour's call to repeat the bank bonus tax to fund a jobs programme for young people," they added.
"Our compulsory jobs guarantee would mean a paid job for every young person out of work for 12 months or more."
Young jobseeker Chris Woodward, who has been looking for work for two years, told BBC Breakfast that while he thought the situation was improving, "it's still quite difficult to try and find a job".
"Obviously a lot more needs to be done," he said. "The issue needs to be addressed properly about getting young people into work.
"And not just getting them the job, but keeping them in work after that as well, not just short-term contracts all the time."
Mr Woodward said many unemployed young people were trapped in a "vicious circle".
"A lot of employers have probably given up on us because they want a lot of experience when going for a job, but obviously you can't get that experience without having worked in that sector before," he added.
The Budget is on 19 March.