Skills minister Baroness Jacqui Smith defended Labour's policy of increasing employer National Insurance contributions during a visit to the Black Country Skills Shop in Brierley Hill on June 29, arguing the revenue funds the NHS and helps tackle a potential 'lost generation' of young workers.
Youth Unemployment in Dudley
The number of young people not in work, education or training (NEET) in Dudley borough stands at 3.52 percent, slightly above the national average, while nine percent of young people's status is unknown. The centre, run by Dudley College of Technology, provides support and education for job seekers.
Baroness Smith said: 'We're determined to tackle this potential for a lost generation of young people who don't have a chance to earn and learn. That's why the £2.5bn that we are investing in the Youth Guarantee, as of today in terms of the Jobs Grant, as of the autumn in terms of the Jobs Guarantee, which will be everywhere across the country.'
National Insurance Rise Defended
In the 2024 budget, Labour increased employers' National Insurance contributions from 13.8 percent to 15 percent. The Conservatives argue this is a tax on jobs that holds business back. Speaking on the same day that Prime Minister-in-waiting Andy Burnham outlined his vision for Britain, the former Home Secretary did not speculate on tax reductions for employers to encourage hiring.
Baroness Smith said: 'One of the things employers quite often say to me is people being ill, people being on waiting lists, is one of the things that prevents them from getting into work and is a burden for an employer. That's why the National Insurance contribution rise was to fund the National Health Service, to bring down waiting lists.'
Conservative Criticism
On the website Conservative Home, shadow Chancellor Mel Stride MP said: 'Labour have sent the tax burden soaring to a record high. As a result, firms have put investment and hiring on hold, and the economy has faltered. We have set out plans to abolish business rates for thousands of shops and hospitality businesses, and introduce a First Job Bonus, a £5,000 tax cut for young people when they first enter work.'
Asked by the Local Democracy Reporting Service if National Insurance should stay at its current level, Baroness Smith said: 'Certainly there was a good reason why we raised National Insurance contributions, that was in order to fund the health service which all of us need and which, when it's not there and when you are sitting on a waiting list, you can't get into work.'
