Almost a quarter of small businesses would welcome tax breaks to take on young people who are not in employment, education or training (NEETs), according to a study commissioned by O2.
A tax break on hiring young, unemployed people would also generate £238m revenue a year, and help get 175,000 people into work, the report also claimed.
A further fifth said they would also respond well to tax breaks for employing people via Jobcentre Plus.
More than a quarter of respondents also reported that pay rises would have to be sacrificed if planned increases to National Insurance contributions materialise.
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