Tories Would Halve Employer National Insurance for Under-25s
Kemi Badenoch will cut employer national insurance on 21 to 24-year-olds from 15% to 7.5%, at a static cost of £3.25 billion falling to £2.3 billion by 2029-30 once extra receipts and lower benefit spending are counted. Earnings above £50,270 would still attract the full rate. A savings plan to pay for it is promised tomorrow.
The policy fixes a genuine cliff edge: employer national insurance currently jumps from zero to the full rate the day a worker turns 21. In cash, an employer would keep £1,125 a year on a 21-year-old earning £20,000, £1,875 at £30,000 and £3,395 at £50,270 or above, an average of £1,545 a head — so a firm with ten young graduates on £30,000 keeps £18,750. Mrs Badenoch framed it as discipline rather than giveaway: “We are being fiscally credible. We find savings and then we spend it. If I could afford to cut it for everybody, I promise you that I would. But young people have a much worse problem than everybody else,” citing a graduate recruitment crisis. The party calls employer national insurance “a tax on jobs” and says Labour’s £25 billion increase hit young workers hardest. The awkward part is the sequencing. The savings plan does not arrive until Wednesday, which means the leader has announced £2.3 billion of spending the day before explaining where it comes from, and her shadow work and pensions secretary spent this afternoon trailing the answer — Helen Whately said £170 billion a year goes on working-age welfare, “two and a half times more than we spend on defence”. It also sits alongside last week’s plan to bar 16 to 24-year-olds who have not worked for six months from universal credit. Watch tomorrow’s arithmetic.