UK business leaders call for labour to introduce skills tax relief training NEET
More than 125 top business leaders from across the UK have written to Prime Minister Rachel Reeves, urging the government to introduce a tax break to support companies investing in training young people who are not in employment, education or training (NEETS).
Senior executives at companies including Toyota, JCB and leading manufacturers signed an open letter warning that the UK faces the risk of “limiting a generation to Scrapheap” without emergency action.
According to official data, as of the end of March 2024, young people aged 16-24 in the UK were listed at 923,000. Business leaders say targeted support is needed to address the youth ineffectiveness crisis in the country and make training more feasible for employers who are already facing rising costs.
“The direct and accessible skills reduction will serve as a financial incentive to enable businesses to invest in training young people,” the letter states.
They propose relief that can help pay the cost of accredited training programs, including apprenticeships, vocational courses and skills bootcamps, which are essential to reduce youth inactivity and bridge the growing skills gap in the UK.
Georgiana Bristol, CEO of the Jobs Foundation, said that despite being willing to do so, the current cost burden on the company is preventing them from providing training to young people.
“We are not short of ambitious young people. We don’t have a real route to work,” she said. “Skills tax breaks can provide businesses with tools to hope.”
The non-activity costs associated with NEET, whether in terms of lost productivity and welfare expenditures, are now “unsustainable”, said Christopher Nieper, the letter’s clothing maker and co-author.
The Centre for Social Justice has proposed a 40% tax credit for businesses hiring and training NEET, and estimates it can free up up to £23 billion of the Treasury by reducing welfare costs and increasing tax revenue.
Prime Minister Keir Starmer and Reeves both acknowledge the scale of the problem.
“None of us should accept a system that works like this,” Starmer told MPs on a liaison committee last month. “It’s broken and needs to be patched.”
Reeves described the scale of youth unemployment as a “crisis” but faced opposition within his own party, in terms of broader welfare reforms, especially around disability benefits and cuts, to support those who cannot work.
The Treasury reportedly aims to raise £30 billion through tax reforms to fill fiscal loopholes, but ministers may have to weigh that now rather than reducing economic growth in youth unemployment.
The call for skill-led tax benefits reflects a broader shift in thinking, and now sees businesses as key delivery partners in coping with social and economic inactivity rather than relying solely on the national welfare system.
Proponents believe that investing in high-skilled and early career development in occupations is not only a social benefit, but also an economic imperative in the labor market.
It remains to be seen whether the new Labor government will pay attention to the call. But as youth unemployment is approaching a millionth, the pressure to bold and immediate intervention is increasing.
