Question to the HM Treasury:

To ask the Chancellor of the Exchequer, What assessment her Department has made of the potential impact of changes in the level of National Insurance contributions on young people in part time work.

The Office for Budget Responsibility’s October 2024 Economic and Fiscal Outlook expects that the Employer National Insurance Contributions package will lead to a reduction in the participation rate of 0.1 per cent from 2025-26 onwards. Overall, once the impact of all budget measures are taken into consideration, the OBR expect the employment level to increase from 33.1 million in 2024 to 34.3 million in 2029.

Employers have a choice about how they respond to the NICs increase. The Government recognises that employers may respond by increasing employees’ wages more slowly than they would have otherwise, alongside absorbing pressures through prices, efficiencies or lower profits.

Employers will also continue to benefit from employer NICs reliefs including for hiring under 21s and under 25 apprentices, where eligible.