Business costs limiting youth employment opportunities, CBI warns

Rising business costs are making it harder for employers to create jobs and apprenticeship opportunities for young people, according to a report from the Confederation of British Industry (CBI).

The report, ‘Opportunity in Every Postcode: Ensuring Young People Have Options, Wherever They Live’, argued that tackling the cost of doing business should form a central part of efforts to address youth unemployment, with more than one million young people currently not in education, employment or training (NEET).

Employers told the CBI that higher National Insurance Contributions (NICs), increases to the National Living Wage, costs associated with the Employment Rights Act and wider pressures including energy, tax and borrowing costs were constraining recruitment and investment.

The CBI said labour costs were now viewed by businesses as the biggest threat to labour market competitiveness, resulting in fewer entry-level opportunities and greater competition among young people trying to enter employment.

It called on the Government to cut employers’ NICs, with the period before the Autumn Budget used to determine how a reduction could have the greatest impact on employment and growth.

The organisation also urged the Government to ensure guaranteed hours rules under the Employment Rights Act do not unintentionally restrict opportunities for young people who require flexibility around education.

It recommended a 52-week reference period for guaranteed hours contracts and a low-hours threshold of no more than eight hours per week.

Further recommendations included establishing a common framework for skills devolution and changing the tax treatment of employer investment in health and wellbeing services.