The Conservatives have vowed to halve employers’ national insurance for workers aged 21 to 24 years old if they win the next general election in a bid to bolster the party’s offer to young people.
The opposition party said their proposal to cut employer NI from its current rate of 15 per cent to 7.5 per cent for 21- to 24-year-olds would cost £2.3bn once extra tax receipts and lower welfare spending were taken into account.
Party leader Kemi Badenoch has also refused to commit to reinstating the state pension triple lock if UK Prime Minister Andy Burnham implements his proposed changes to the mechanism before the next general election.
The Conservatives said they would set out details of how they would fund their “jobs tax” cut only on Wednesday, the final day of their annual conference in Birmingham, which will close with Badenoch’s keynote leader’s speech.
The move is a pillar of the party’s wider ‘rescue plan for young people’, as it strives to claw back support among the youth vote. Only 8 per cent of 18 to 24-year-olds support the Conservatives, according to an analysis of four recent YouGov surveys by polling expert Sir John Curtice.
It is counterbalanced by the Conservatives’ recently announced plans to bar 16- to 24-year-olds who have not worked continuously for six months from claiming universal credit as part of a “tough love” approach.
The proposed tax cut also dovetails with the Tories’ attempt to reorient their focus towards the economy, away from immigration and culture war issues, where many senior party figures think they cannot outperform their rivals to the right.
Defending her decision to prioritise a reduction in employer NI for young people over older workers, Badenoch told the BBC: “Young people have a much worse problem than everybody else.”
Britain’s youth unemployment rate has risen to 16.4 per cent, its highest rate since 2014, overtaking the EU average. “We’ve got to fix that,” Badenoch said and raised specific concerns about a “graduate recruitment crisis”.
The proposal would temper the current employer NI cliff edge relating to young workers when they reach 21 — from zero to the full rate. It would save a business an average of £1,545 for every young worker in the age bracket. Earnings above £50,270 would still face the standard rate.
The Labour government is also seeking to address youth unemployment, having tasked former health secretary Alan Milburn with reviewing how to assist nearly one million young people not in education, employment or training.
Labour lambasted Badenoch’s proposal as “yet more fantasy economics from the Tories”. The government is investing £2.5bn to help young people into work, including via a jobs guarantee scheme, a Labour spokesperson said.
Earlier on Tuesday, Badenoch reiterated that she wanted to retain the state pension triple lock after Burnham last week announced plans to scrap it in its current form.
But she refused to commit to reversing Labour’s proposed changes to the mechanism if they are implemented before the next election, insisting she would not “speak in hypotheticals”, adding: “I don’t promise we can pay for the triple lock now.”
Reform UK seized on her remarks, with the party’s Treasury spokesperson Robert Jenrick warning that pensions faced a “betrayal stitched up in Westminster”. He said Reform was “the only party prepared to defend” the triple lock with a “rock-solid pledge” to keep it.
In a raft of broadcast interviews on the eve of her conference address, Badenoch conceded that the Tories — currently polling at around 20 per cent — could not win an election in the near term and predicted there would be a hung parliament if a snap poll were called.
The opposition leader reiterated her refusal to countenance any deal with Nigel Farage’s party and signalled she would push for another election rather than accept a pact with Reform. She also declared that the door was closed to any MPs who had defected to Reform who may wish to return to the Tory fold.
Reflecting on the upbeat tone of the party conference, Badenoch insisted the Tories’ optimism derived from a greater sense of clarity over the party’s future direction under her leadership.
“We know who we are. We know what we think. We’re going the right way,” she said. While critics have mocked empty seats in the main hall, Badenoch argued the annual gathering was “buzzing”.
She is expected to address inheritance tax in her keynote speech, having hinted in recent days that she wants to cut it.
Dismissing criticism of a tax cut for the richest, Badenoch told Sky News: “The wealthiest people don’t pay [inheritance tax], they have all these trusts and so on. It really affects the middle class.”