Rachel Reeves must support firms hire younger people, bosses warn (Image: Getty)
Rachel Reeves risks “confining Britain’s young people to the scrapheap” without extra support for businesses to hire junior staff, more than 100 bosses have warned. Top figures from Toyota and manufacturing firm JCB are among the 125 senior businesspeople to have penned a letter to the Chancellor with the warning. They called it a “scandal” that nearly a million young people are not currently in employment, education or training (NEET).
Christopher Nieper OBE, who jointly coordinated the letter alongside the Jobs Foundation, said: "The cost of the NEETs crisis to the economy is unsustainable – not just in welfare payments, but in lost productivity, unfulfilled potential, and the long-term damage caused by early unemployment. Business wants to help tackle this.”
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The Jobs Foundation said the bosses had “united behind a stark warning to the Chancellor that without urgent action, we risk confining Britain’s young people to the scrapheap.”
Before the Covid-19 pandemic, the percentage of young people who were NEET stood at 10.7%.
This skyrocketed to a peak of 13.2% in the last three months of 2024, representing 987,000 young people not earning or learning.
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The letter, also signed by Labour peer Lord Jon Mendelsohn and Bristol Port Company boss Sir David Ord, urges the Government to introduce a form of skills tax relief that would enable businesses to invest in training the country’s youth.
Estimates have suggested that a skills tax relief could lead to a net gain for the Treasury of more than ￡20billion over five years, primarily in welfare savings.
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This comes as the Government has struggled to control the welfare bill, with Labour MPs pressuring the Government into U-turning on ￡5 billion of planned cuts to PIP payments.
The letter said: “A direct and accessible skills tax relief would act as a fiscal incentive enabling businesses to invest in training young people. Whilst there are a number of options for implementing a Skills Tax Relief, this would help employers cover the costs of their spending on accredited training like apprenticeships, vocational courses, and boot camps, helping make training young people more affordable.
“Economic modelling suggests this would be fiscally positive over time and a
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significant step towards reducing the number of young people out of work or training.”
The Chancellor recently told the House of Lords that supporting NEETs is where the “biggest crisis exists” and highlighted that “we know that if you are out of work early in your working life, you are going to earn less and be in work less”.
Prime Minister Sir Keir Starmer has also told MPs that the fact that “there are nearly a million young people out of work, not earning or learning, is a huge challenge for our country” and that “none of us should accept a system” like this.
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