Labour conference: National insurance for under-25s should be scrapped

Speaking at a fringe event on youth unemployment at the Labour party conference, James Reed, chairman of Reed, said the move would incentivise businesses to employ more young people.

"Reducing employers national insurance contributions would make it cheaper to hire young people whilst they are still developing their skills," he said.

The idea was backed by Wes Streeting, president of the National Union of Students, who said there is a strong case for taking under-25s out of national insurance contributions completely.

"Employers need a much greater degree of incentivisation," he said.

Streeting also called on the government to urgently bring forward plans to raise the age of participation to 18.

He said: "It would be better to take 16- and 17-year-olds out of the labour market and give them something to do."

David Coats, associate director of policy at the Work Foundation, said the government's Future Jobs Fund would go some way to stemming youth unemployment. But he said 10 months is too long for young people to be unemployed before being offered a job and suggested six months would be a more appropriate timescale.

He added that details of the prgramme must be worked out. "We need to think about how to manage the transition between the job guarantee period and future employment," he said.