New PM Andy Burnham Urged to Axe Youth Job Taxes Amidst Soaring Unemployment
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Just days into his premiership, Prime Minister Andy Burnham faces an urgent demand from the UK Parliament's Work and Pensions Committee to scrap job taxes for all under-25s, a critical move aimed at tackling a worsening youth unemployment crisis. The cross-party committee, in a new report released this week, highlights that current government policies are falling short as over one million young people aged 16 to 24 are currently not in education, employment, or training (NEET). This urgent call puts immediate pressure on Burnham to deliver on his pledge to offer 'hope for every young person' and address the escalating jobless rates. Businesses, particularly in the retail and hospitality sectors, report that recent increases in employer National Insurance contributions are making it harder to hire young people. While employers pay no NI for under-21s or apprentices under 25, a 15% charge applies to non-apprentices aged 21-24 on earnings over £5,000, creating a significant barrier to entry-level jobs. This inconsistency undermines existing government initiatives like the Youth Guarantee and the Youth Jobs Grant, which offer subsidies for hiring long-term unemployed youth. The committee argues that without broader tax relief, these programs alone cannot reverse the upward trend in youth joblessness, which hit a 12-year high of 14.8% for 18-24 year olds in May 2026. Implementing the proposed tax cut could inject new life into the job market for young people, with estimates suggesting it could bring 38,000 more into work, though at an estimated cost of £5.1 billion to the Treasury. The Work and Pensions Committee is pushing for a clear, unified Youth Employment Strategy to ensure all government policies align in supporting young people. As Prime Minister Burnham navigates his early days in office, his response to this recommendation will be a defining moment for his economic agenda and a clear signal of his commitment to the UK's next generation.