The Government should introduce a Young Britain Credit to encourage firms to recruit young people and prevent the UK creating a “lost generation” of jobless youngsters, the head of the CBI has told West business.
Speaking at the CBI South West’s annual dinner in Bristol last night, John Cridland said incentivising business through tax credits to take on teenagers could help tackle the “scarring effect” youth unemployment can have. One in five young people between 16 and 25 are not in work, education or training, he said.
Such a scheme would cost the Treasury around £150m. “That’s a lot of money, but the Government has recently found £200m to restore weekly bin collections.”
He said the message would be delivered to Chancellor George Osborne to introduce the scheme in his Autumn Statement on November 29.
“He needs to take some action on youth unemployment.” Said Mr Cridland.
“We need to encourage businesses, especially small businesses, to take on unemployed young people. I don’t think it will create new jobs at this time but what it will do is put young people into work where they can acquire skills.”
Businesses would be encouraged by giving them a refund of all the National Insurance payments they had paid for the young person – but only at the end of a year’s service.
“I’m optimistic that businesses will rise to the challenge because we can’t afford another lost generation,” he said.
Mr Cridland also said the Chancellor’s deficit reduction programme was right – but not sufficient to generate growth.
“I don’t think Plan A is good enough,” he told the 350 guests at the black tie dinner, which was sponsored by Barclays Corporate. “The Government is going to have to do more. We need a Plan A+.”
He welcomed the Bank of England’s injection of £75bn into the economy through quantitative easing and said it would have a positive impact.
“It’s like a helicopter drop of money. It will get into the economy somewhere,” he said.
However, he thought the Government could do more to help manufacturers and exporters – which ministers have continually said would lead the economic recovery.
“What we don’t need is any more own goals from the Government,” he said. “In his Budget the Chancellor hit the North Sea oil and gas industry.”
On exporting he said all ministers and civil servants should promote UK industry abroad, not just the Prime Minister on his regular trade missions.
