Spark investment in young people to secure Britain’s future – British Chambers
British Chambers of Commerce – the umbrella association of local chambers of commerce – has called on George Osborne to use his Budget speech on March 19 to focus on youth employment, to avoid creating a ‘lost generation’.
In its submission to the Chancellor, the BCC says that although a fall in youth unemployment by 48,000 is encouraging, the jobless rate among young people still stands at 917,000, which is far too high.
Young people are nearly three times as likely to be unemployed compared with the rest of the UK population, says the organisation.
The BCC is calling for ‘concrete measures’ to promote business investment in young people aged 16 to 24.
The submission also calls on the Chancellor to enhance tax incentives for those investing in companies run by young entrepreneurs, who often say they can’t get growth funding from banks or other sources.
BCC Director General John Longworth is urging the Chancellor to play his part in making 16 to 24 year olds more attractive to businesses, who in return can help the Britain avoid a lost generation.
The BCC submission proposes:
- A new £100m Future Workforce Grant scheme – a £1,000 payment to businesses who hire long-term unemployed young people or a new apprentice, to create 100,000 new jobs in 2014. This will help to bridge the gap before the national insurance exemption for under 21s is introduced in 2015.
- A two-year extension to the successful Apprenticeships Grant for Employers (AGE) scheme to help create 80,000 additional apprenticeships. Demand from candidates has outstripped supply of apprenticeship vacancies by as much as 12 to one.
- Increased tax relief to encourage investment in young entrepreneurs. Increasing the tax relief available through theEnterprise Investment Scheme (EIS) from 30 percent to 50 perccent for investors in businesses run by under-24s will help more young people set up and grow their own business.
At just under £400m, the estimated cost of these interventions is less than 0.02 percent of government current spending for the next three years, and is just a fraction of the projected departmental underspend for 2013-2014 (£7bn).
The BCC’s letter also encourages the Chancellor to extend the enhanced Annual Investment Allowance for businesses to 2015/16, and consider opening it to premises as well as plant and machinery.
Beyond the Budget, the business group plans to make wider proposals for economic reform in the autumn.
Commenting, BCC director general John Longworth said: “We all know that politicians are already looking to manifestos and the 2015 General Election. But the crisis of confidence separating Britain’s employers and young people can’t wait for political posturing or the electoral cycle.
“Businesses across Britain tell me they want to hire young people. Yet many cannot afford to take the risk, especially at a time when other, more qualified applicants are coming forward for the job vacancies on offer.
“If the Chancellor wants to avoid a lost generation among today’s 16-to-24 year-olds, he must use the spring Budget to help businesses take on and train up young people, whether they are going straight into jobs or into apprenticeships.
“He should also extend tax incentives for individuals with deep pockets who invest in businesses started up by school and college leavers and graduates.
“The Chancellor rightly wants to boost business investment in this year’s Budget and we support measures to do this, but not just for plant and machinery. We know there are many serious structural issues that need to be addressed to create a truly great UK economy, but not all of them can be resolved at this point in the political and economic cycle.
“Getting young people into employment is vital, pressing, and easily affordable right now. Helping British youth in the way we propose would cost less than seven percent of what the government spent on overseas aid last year, for example. If government helps businesses overcome the real risks they are facing today, the private sector will invest in a skilled workforce for the future.”