CBI calls for tax incentive to get “young Britain” working

THE employers group CBI today called on the Government to introduce a new tax incentive to encourage companies to take on young unemployed people, as part of a package of measures aimed at boosting employment across the UK.

Against a backdrop of rising unemployment and with one in five young people currently out of work, the CBI is launching a new report, “Action for jobs: how to get the UK working”.

Among the measures it calls for is a new Young Britain Credit worth �1,500 for firms taking on an unemployed person aged between 16 and 24 years.

This would cover the first year’s National Insurance for employers and cost �150 million a year – affordable within the context of the Government’s deficit reduction plans, says the CBI.

Other proposals include: creating around 450 business ambassadors, one for each local area, to strengthen links between schools and businesses using successful schemes that build long-term partnerships; introducing a comprehensive “readiness for work” assessment for every unemployed person; and suspending, rather than completely cancelling benefits when someone initially takes a job to reduce the perceived risk of taking a short-term post.

John Cridland, CBI director-general, said: “With unemployment rising, particularly among young people, now is the time for action for jobs.

“The best way of getting the UK working is to get the private sector motoring, but the labour market has been wracked by structural problems long before the recession struck that won’t be swept away by a return to growth.

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“The good news is that even in these challenging times businesses are creating jobs, but all too often the unemployed, particularly our young people, are not best placed to get them.

“We need businesses, schools and the Government working together to make sure young people are able to shine in the jobs market.

“Our proposals are not exhaustive, but taken together would herald a major shift in the way we prepare youngsters for the world of work, provide support for companies to create and retain jobs, and ensure the benefits system makes work pay.”

The CBI says its recommendations are based on extensive research with businesses, academics, charities, unions and unemployed people across the UK.

They follow the publication earlier this year of in-depth CBI analysis on the state of the labour market. This revealed deep-seated structural problems, including long-term unemployment and skills shortages that predate the recession.

Given the scale of youth unemployment, with one million youngsters not in work, and many not in training or education, the proposals focus mainly on this vulnerable group. However, the CBI says many of the recommendations support employability across the economy.