National Insurance

Lord Newby Excerpts

Monday 5th March 2012 Lords Chamber

[Lord Sassoon]

My Lords, first, a position in which youth unemployment is more than 1 million is not at all acceptable. While I am very happy to receive Budget submissions from wherever they come from around the House or outside the House, what is important here is that the Government have a clear strategy for dealing with the youth unemployment challenge. Only last November, we introduced the new youth contract, which becomes live on 2 April, with more than £940 million of funding going into it in the spending round. This youth contract will enable up to 500,000 young people to get into employment and education. The Government are actively on the case.

[Lord Newby]

My Lords, the Minister will be aware that in the budgetary provisions already made for the forthcoming tax year, some £300 million has been made available by way of national insurance holidays for new companies employing new people. It is clear from experience to date that the Budget level will not be reached. Could that money be redirected beyond new companies employing additional staff either to existing small businesses employing additional staff or specifically to small businesses employing young people who are currently unemployed?

[Lord Sassoon]

Again, I am happy to hear the thoughts of my noble friend about what might be done. The national insurance holiday, which is estimated to be already supporting some 40,000 jobs in new firms, is only one part of the package to help small businesses: the reduction of the corporation tax rate, the extension of business rate relief for a further six months from 1 October this year onwards, the coming national loan guarantee scheme, as well as what the Government did with the above-indexation increase in national insurance thresholds. This is a significant package of which the holiday is only one element.