Expand opportunities in crisis

The Covid-19 pandemic has had a major impact on the UK’s labour market. Bold intervention is needed from Government to help people and safeguard future talent.

To recover from the pandemic and its economic impact, businesses will depend on a talented and adaptable workforce. Many businesses will not return to a pre-Covid normal, but will instead evolve new work practices and adapt to changes in consumer behaviour and demand. This will have a profound impact on the competencies and skills employers need. The Covid-19 crisis is likely to accelerate rapid technological change that has already transformed the UK’s labour market significantly. The Government has introduced welcome measures since the start of the crisis, including the Kick Start Scheme and more details on the National Skills Fund. However, the level of disruption to the labour market and the level of support needed especially for young people requires an urgent step change in the scale of the ambition.

National insurance contributions

To help young people into employment and help employers to retain talent and valuable entry level jobs, the Government should temporarily abolish National Insurance Contributions for young people under the age of 25. Employers should no longer have to pay secondary Class 1 (employer) National Insurance contributions (NICs) on earnings up to the Upper Earnings Limit (UEL), for employees under the age of 25. This enhances existing exemptions that apply to young people under the age of 21.

On the job learning

To maintain opportunities to learn and train, the Government should introduce a 50% wage subsidy for people under the age of 25 undertaking an apprenticeship, internship or work placement (including as part of or during a degree). Restrictions on uses of the Apprenticeship Levy should also be relaxed so it can be used to cover the real cost of an apprenticeship to businesses.