Budget ‘tax rises’: Cabinet minister brushes aside calls to reverse £20bn NI hit on firms so they hire more young people‘We’ve asked business to pay more in recent years but it’s not true to say youth unemployment problem began a year ago,’ says Work Secretary Pat McFadden
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Nicholas Cecil, Chief Reporter @nicholascecil2 minutes ago
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A Cabinet minister dismissed calls for the new Government to reverse the £20 billion tax rise on businesses in Rachael Reeves’ first Budget which is widely blamed for hitting jobs in Britain.
Work and Pensions Secretary Pat McFadden was on Tuesday hailing a “great national cause”, as he linked up with major retaliers, to get more young people into work.
But he was grilled on the morning media round over why the Government did not ditch the deeply controversial increase in taxation, of between £20 billion and £25 billion through raising National Insurace contributions on employers, announced two years ago.
Mr McFadden told Sky News: “We have asked business to pay more in recent years, but it’s simply not true to say that the youth unemployment problem began a year ago.”
London has the highest unemployment in the countryPA Archive
However, many bosses say the extra tax has led them to cut back on hiring, particularly in companies employing large numbers of people on low wages.
London has the highest unemployment in the country, with young people in the capital particularly finding it hard to get a job.
The London Chamber of Commerce and Industry is calling on the new Chancellor John Healey to reverse the NI hike.
Speaking on Monday, the Chancellor declined to rule out more tax rises in his Budget on October 28.
Mr McFadden visited John Lewis in London’s Oxford Street to announce that Britain’s biggest retailers will offer young people thousands of work experience placements as the Government aims to slash youth joblessness.
The placements, with businesses including Tesco, John Lewis, Curry’s and Costa Coffee, will be offered directly to young universal credit claimants in a programme dubbed “Opening Shift”.
Work and Pensions Secretary Pat McFadden speaking to staff during a visit to the John Lewis store in Oxford Street, central London, for an announcement on jobs for young people who are not in education, employment or trainingPA
Some 40 retailers have already signed up to offer more than 11,000 placements, providing young people with two-to-four weeks of work experience.
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They will also offer those young people an interview at the end of their placement, aiming to take on as many as possible.
The placements will be voluntary, and young people will continue to receive their universal credit where eligible.
The programme, organised by the Department for Work and Pensions and the British Retail Consortium (BRC), is part of plans to create 100,000 jobs for young people not in education, employment or training – so-called “Neets” – by the next election.
Mr McFadden told of the difficulties facing job hunters.
He said: “They are quite often caught in a bind of no experience, no job.
“About 60% of Neets have never had a job and this cuts through that.”
He added: “Once they get that (experience), the chances of getting hired in a long-term paid job go up hugely, every senior manager of a business tells you that.”
His announcement came after Jaguar Land Rover said it will “reduce its global workforce” by around 4,000 roles in the next two years due to “significant challenges” facing the automotive industry and a need to find £1.7 billion in savings.
Mr Mr McFadden said the job losses at Jaguar Land Rover were “deeply concerning” and the Government would “do everything we can” to ensure the business remained committed to the UK.
Jaguar Land Rover (JLR) has confirmed plans to axe 4,000 jobs across its global workforce over the next two years as part of efforts to slash costs by £1.7 billionPA
An estimated 981,000 people aged between 16 and 24 were classified as Neet between April and June 2026.
While this was a slight fall from the more than 1 million Neets in the first quarter of the year, the figure remains 30,000 higher than in 2025.
BRC chief executive Helen Dickinson said: “Retail is coming to the rescue for tens of thousands of young people struggling to take their first step on the career ladder.
“Too many are trapped in a no experience, no job doom loop. High-quality work experience is essential to fix this problem and Opening Shift is a major contribution to delivering it.”
Ministers have commissioned Blair-era cabinet minister Alan Milburn to come up with recommendations for cutting youth unemployment, and recruited former M&S chairman Marc Bolland to work with businesses to get young people into jobs.
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