CBI proposes tax breaks for employers that recruit young workers

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The CBI has called on the Government to introduce tax incentives that encourage employers to recruit younger workers, in one of a range of measures aimed at increasing employment.

The CBI said that a “young Britain credit” of £1500, granted to firms that take on recruits aged between 16 and 24, would help to address the growing problem of youth unemployment. One in five young people are currently out of work.

Other proposals that the CBI has made include: creating business ambassador posts across the UK to strengthen links between schools and businesses; introducing a “readiness for work” assessment for every unemployed person; and suspending, rather than completely cancelling, benefits when someone initially takes a job to reduce the perceived risk of taking a short-term post.

John Cridland, CBI director-general, said: “With unemployment rising, particularly among young people, now is the time for action for jobs.

“The best way of getting the UK working is to get the private sector motoring, but the labour market has been wracked by structural problems long before the recession struck that won’t be swept away by a return to growth.

“We need businesses, schools and the Government working together to make sure young people are able to shine in the jobs market. Our proposals are not exhaustive, but taken together would herald a major shift in the way we prepare youngsters for the world of work, provide support for companies to create and retain jobs, and ensure the benefits system makes work pay.”

However, employment law experts have poured cold water on the “young Britain credit” proposal, and have suggested that it might leave employers open to age discrimination claims. Stephen Simpson, senior employment law editor at XpertHR, said: “There is nothing wrong with employers being encouraged to target the recruitment of the unemployed.

“However, the CBI is getting into murky waters if it wants to encourage businesses to recruit from a particular age group with a financial incentive. The recruitment decision should be based on merit; an incentive like this would lead to cases where the recruitment decision is based on age.

“Imagine a scenario where an employer has a choice between two candidates. The choice is between a 50-year-old who has been unemployed for five years and a 24-year-old who has been unemployed for six months. The employer is aware of the tax incentive and so starts asking each candidate his or her age as a matter of course. The employer chooses the 24-year-old to take advantage of the financial reward.

“Even putting aside the inherent unfairness of this and the acknowledged difficulty that older unemployed workers have in getting back into work, this employer might face an age discrimination claim from the 50-year-old candidate. Would choosing the younger worker for the incentive be sufficient justification to defend the claim?”

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