Key Takeaways
- Conservatives propose halving employer National Insurance for workers aged 21 to 24.
- The £2.3 billion plan aims to encourage businesses to hire more young workers.
- Badenoch says she would prefer another election to a coalition with Reform UK.
Conservative leader Kemi Badenoch has proposed a Kemi Badenoch National Insurance cut, halving employer National Insurance for workers aged 21 to 24, saying the £2.3 billion cut would encourage businesses to hire young people.
Conservatives Target Youth Employment
The proposal would reduce the employer National Insurance rate from 15% to 7.5% for eligible workers, the Conservatives said during their annual conference in Birmingham. The party estimates the measure would cost £2.3 billion in 2029-30 after accounting for additional tax receipts and lower welfare spending.
Badenoch said young workers face particular difficulties entering the labor market and described the Kemi Badenoch National Insurance cut policy as part of a broader effort to increase employment among people under 25.
“We are being fiscally credible. We find savings, and then we spend it,” Badenoch told the BBC. “But young people have a much worse problem than everybody else.”
The Conservatives said the policy would reduce the cost of employing young workers while allowing businesses to retain more money for each eligible employee. The standard National Insurance rate would continue to apply above the relevant earnings threshold.
Party Pledges Savings To Fund Cut
Under the proposal, an employer would save about £1,125 a year on a 21- to 24-year-old earning £20,000, according to Conservative calculations. The saving would rise to £1,875 for an employee earning £30,000 and £2,625 for someone earning £40,000.
The party estimates an average saving of £1,545 for each eligible young worker. It says a company employing 10 young graduates earning £30,000 each would save £18,750 annually.
The Conservatives have not yet published the full savings plan behind the proposal. Party officials said it would be released Wednesday and would show how the measure is funded.
Shadow Chancellor Andrew Griffith said the higher cost of employing young people was limiting opportunities for new workers.
“Labour are destroying the future of our young people,” Griffith said. “We will fix that.”
The proposal follows a wider Conservative plan to change the benefits system for younger people. The party has said people aged 16 to 24 who have not worked continuously for six months would face restrictions on claiming Universal Credit.
Badenoch Rules Out Pact With Reform UK
Badenoch also said Tuesday that she would prefer another general election to a coalition with Reform UK if no party wins a majority.
“If there is a hung parliament, then we can have another election,” she told Sky News. She later confirmed she would rather hold another election than enter a coalition with Nigel Farage’s party.
The Conservative conference has also featured proposals on defense, inheritance tax and welfare reform as Badenoch seeks to reposition the party ahead of the next election.
The party has separately proposed spending up to £10 billion on a missile and drone defense system called Britannia Shield.
The Conservatives’ Kemi Badenoch National Insurance cut proposal is part of the party’s broader economic platform, which emphasizes lower taxes, reduced government spending and measures intended to increase employment and economic growth.
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