By . Daniel Martin, James Chapman and Jason Groves . PUBLISHED: . 08:52 EST, 5 December 2013 . | . UPDATED: . 04:27 EST, 6 December 2013 . Employers  will no longer have to pay National Insurance contributions when they take on workers under the age of 21. George Osborne announced that what he called the ‘jobs tax on young people’ would be abolished by 2015 in a bid to cut the stubbornly high level of youth unemployment. The announcement follows the introduction earlier this year of the Employment Allowance, which cuts £2,000 off the NI bill for thousands of businesses and charities. Jobcentres will be told to do more to help 16 and 17-year-olds who will lose their benefits if they refuse to accept training, work placement or community work . The . new changes for under 21s mean the cost of employing a young person at a . salary of £12,000 will be reduced by £500, the Chancellor said. On a salary of £16,000, the bill will be cut for employers by £1,000. During . his Autumn Statement speech, Mr Osborne said: ‘We are going to abolish . the jobs tax on young people under the age of 21. Employer National . Insurance contributions will be removed altogether on a . million-and-a-half jobs for young people. ‘We’re . not going to leave young people behind as the economy grows. We are . going to have a responsible recovery for all. The cost for a business of . employing a young person on a salary of £12,000 will fall by over £500. For someone on £16,000, that’s over £1,000 off.’ Because . the change requires legislation, it will not happen until April 2015, . and will not apply beyond the upper earnings limit of £42,285, he said. Latest figures show how the proportion of under-25s described as 'NEETs' still stands at almost 15 per cent, despite overall unemployment falling . Curbs: Chancellor George Osborne said young people will not be able to leave school and sign on to the dole . Mr Osborne told MPs that unemployment was forecast to fall in the next few years from 7.6 to 5.6 per cent.Businesses have created three jobs for every one lost in the public sector, and this trend was forecast to continue, he said. Tim Stovold, employment tax partner at accountancy firm Kingston Smith, welcomed the National Insurance changes. ‘Scrapping . NI for the under 21s could save employers up to £4,658 per employee so . is a valuable incentive to employ younger workers,’ he said. ‘This is a . bold move as it will benefit not just small businesses but also . multi-nationals.’ On the up: Almost 30million people are now in work in the UK, up by 1million since the 2010 general election . Lottie . Dexter, director of Million Jobs campaign which called for the move on . NI, said: ‘We are thrilled with this pro-youth Autumn Statement. ‘Levelling . the playing field for under-21s and backing youngsters to succeed means . the Government are clearly serious about tackling youth unemployment.’ Paul Green, from over-50s group Saga, said the announcement was ‘great news’. ‘We . have been campaigning for a cut in taxes on employing young people and . the long-term unemployed for many years and we are delighted the . Government have listened and acted,’ he said. But . Karen Darby, founder of CrowdMission.com, told the BusinessZone . website: ‘I hope we don’t see a spike in unemployment for 22-year-olds.’ And Gareth Stevens, . from QualitySolicitors, said: ‘Removing National Insurance contributions . for employees under the age of 21 will likely lead to a surge in . employment tribunal claims under the age discrimination banner.’ Mr Osborne also launched a crackdown on unscrupulous firms who . designate their workers as self-employed, depriving them of basic . employment rights such as the minimum wage in a bid to avoid employer . National Insurance. Poorly qualified youngsters will be banned from going straight from school to a life on the dole, George Osborne said yesterday. The Chancellor said young jobseekers lacking basic skills will have their benefits docked unless they agree to do up to 16 hours training a week to improve their employment chances. The move is designed to tackle growing fears that the one million young people not in employment, education or training – so-called Neets – could become a ‘lost generation’. Poorly qualified youngsters will be banned from going straight from school to a life on the dole, George Osborne said . It also goes part way towards meeting David Cameron’s party conference pledge in October that youngsters would be required to ‘earn or learn’. But it stops short of his plan to strip benefits from the under-25s, which was vetoed by Nick Clegg. Under the new scheme, youngsters lacking at least a Grade C GCSE in both maths and English will be required to undergo extra training in return for their benefit. Those who are still out of work after six months will be required to sign up for a traineeship, community work or work experience or be stripped of their benefits. The scheme will apply to 18 to 21-year-olds and will be piloted in small areas from next April before being rolled out to the rest of the country. Mr Osborne said: ‘Without basic maths or English, there is a limited chance any young person will be able to stay off welfare. So we are taking a new approach.’ He went on: ‘A culture of worklessness becomes entrenched when young people can leave school and go straight onto the dole, with nothing expected in return. That option is coming to an end in our welfare system.’ Mr Osborne said the Government would also invest around £10million a year in Jobcentre Plus support for 16 and 17-year-olds who want help to find apprenticeships and training. Phil Orford, of the Forum of Private Businesses, welcomed the recognition of the ‘need to ensure young people have the basic skills required for work’. A new cap on total welfare spending will be set next year and take effect in 2015. The Chancellor set out plans for a radical new limit, to be set every five years, that will include housing benefit, tax credits, disability benefits and pensioner benefits, although the state pension will be excluded. Governments will have to comply with any breach of the cap by cutting welfare in what George Osborne says will be a ‘limit on the nation’s credit card’. Ministers say the cap is designed to prevent repeats of the spike in incapacity benefit claims under the Conservative governments of the 1980s and 1990s and the surge in housing benefit under Labour. It is also designed to try to bind Labour’s hands by building structural limits into welfare – a huge proportion of Government spending. Governments will have to comply with any breach of the cap by cutting welfare in what George Osborne says will be a 'limit on the nation's credit card' Labour has indicated that it is prepared to consider backing the idea of a cap, though shadow chancellor Ed Balls has controversially suggested pensions might be included too. Mr Osborne told MPs that benefits which fluctuate with the economy, such as jobseeker’s allowance, would be excluded from the cap, as well as the state pension. But he insisted: ‘All other benefits, from tax credits to income support, to the vast majority of housing benefit, will be included in the cap.’ The Tories argue that including state pensions in the cap would not be fair, since it could mean cutting pensions for those who have worked all their lives because costs on housing benefit were getting out of control. Mr Osborne said the limit on total welfare expenditure would be set by the Chancellor at the beginning of each Parliament, and MPs would be asked to support it. If the limit was breached, the Chancellor would have to explain why, and a vote would be held in Parliament. In 2014, the Government is expected to spend £112bn on welfare payments, excluding state pensions. Charlotte Ravenscroft, of the National Council for Voluntary Organisations, warned: ‘Many charities fear the new welfare cap will drive the government to make spending decisions that will lead to vulnerable people bearing the brunt of further cuts.’ Lord Razzall, a Lib Dem trade and industry spokesman, added: ‘The devil will be in the detail.’
School leavers will have to accept training or work experience .
George Osborne says leaving school and signing on is not an option .
Jobcentres told to do more to help 16 and 17-year-olds find work .
Cap on numbers allowed to go to university each year is scrapped .
By . Daniel Martin, James Chapman and Jason Groves . PUBLISHED: . 08:52 EST, 5 December 2013 . | . UPDATED: . 04:27 EST, 6 December 2013 . Employers  will no longer have to pay National Insurance contributions when they take on workers under the age of 21. George Osborne announced that what he called the ‘jobs tax on young people’ would be abolished by 2015 in a bid to cut the stubbornly high level of youth unemployment. The announcement follows the introduction earlier this year of the Employment Allowance, which cuts £2,000 off the NI bill for thousands of businesses and charities. Jobcentres will be told to do more to help 16 and 17-year-olds who will lose their benefits if they refuse to accept training, work placement or community work . The . new changes for under 21s mean the cost of employing a young person at a . salary of £12,000 will be reduced by £500, the Chancellor said. On a salary of £16,000, the bill will be cut for employers by £1,000. During . his Autumn Statement speech, Mr Osborne said: ‘We are going to abolish . the jobs tax on young people under the age of 21. Employer National . Insurance contributions will be removed altogether on a . million-and-a-half jobs for young people. ‘We’re . not going to leave young people behind as the economy grows. We are . going to have a responsible recovery for all. The cost for a business of . employing a young person on a salary of £12,000 will fall by over £500. For someone on £16,000, that’s over £1,000 off.’ Because . the change requires legislation, it will not happen until April 2015, . and will not apply beyond the upper earnings limit of £42,285, he said. Latest figures show how the proportion of under-25s described as 'NEETs' still stands at almost 15 per cent, despite overall unemployment falling . Curbs: Chancellor George Osborne said young people will not be able to leave school and sign on to the dole . Mr Osborne told MPs that unemployment was forecast to fall in the next few years from 7.6 to 5.6 per cent.Businesses have created three jobs for every one lost in the public sector, and this trend was forecast to continue, he said. Tim Stovold, employment tax partner at accountancy firm Kingston Smith, welcomed the National Insurance changes. ‘Scrapping . NI for the under 21s could save employers up to £4,658 per employee so . is a valuable incentive to employ younger workers,’ he said. ‘This is a . bold move as it will benefit not just small businesses but also . multi-nationals.’ On the up: Almost 30million people are now in work in the UK, up by 1million since the 2010 general election . Lottie . Dexter, director of Million Jobs campaign which called for the move on . NI, said: ‘We are thrilled with this pro-youth Autumn Statement. ‘Levelling . the playing field for under-21s and backing youngsters to succeed means . the Government are clearly serious about tackling youth unemployment.’ Paul Green, from over-50s group Saga, said the announcement was ‘great news’. ‘We . have been campaigning for a cut in taxes on employing young people and . the long-term unemployed for many years and we are delighted the . Government have listened and acted,’ he said. But . Karen Darby, founder of CrowdMission.com, told the BusinessZone . website: ‘I hope we don’t see a spike in unemployment for 22-year-olds.’ And Gareth Stevens, . from QualitySolicitors, said: ‘Removing National Insurance contributions . for employees under the age of 21 will likely lead to a surge in . employment tribunal claims under the age discrimination banner.’ Mr Osborne also launched a crackdown on unscrupulous firms who . designate their workers as self-employed, depriving them of basic . employment rights such as the minimum wage in a bid to avoid employer . National Insurance. Poorly qualified youngsters will be banned from going straight from school to a life on the dole, George Osborne said yesterday. The Chancellor said young jobseekers lacking basic skills will have their benefits docked unless they agree to do up to 16 hours training a week to improve their employment chances. The move is designed to tackle growing fears that the one million young people not in employment, education or training – so-called Neets – could become a ‘lost generation’. Poorly qualified youngsters will be banned from going straight from school to a life on the dole, George Osborne said . It also goes part way towards meeting David Cameron’s party conference pledge in October that youngsters would be required to ‘earn or learn’. But it stops short of his plan to strip benefits from the under-25s, which was vetoed by Nick Clegg. Under the new scheme, youngsters lacking at least a Grade C GCSE in both maths and English will be required to undergo extra training in return for their benefit. Those who are still out of work after six months will be required to sign up for a traineeship, community work or work experience or be stripped of their benefits. The scheme will apply to 18 to 21-year-olds and will be piloted in small areas from next April before being rolled out to the rest of the country. Mr Osborne said: ‘Without basic maths or English, there is a limited chance any young person will be able to stay off welfare. So we are taking a new approach.’ He went on: ‘A culture of worklessness becomes entrenched when young people can leave school and go straight onto the dole, with nothing expected in return. That option is coming to an end in our welfare system.’ Mr Osborne said the Government would also invest around £10million a year in Jobcentre Plus support for 16 and 17-year-olds who want help to find apprenticeships and training. Phil Orford, of the Forum of Private Businesses, welcomed the recognition of the ‘need to ensure young people have the basic skills required for work’. A new cap on total welfare spending will be set next year and take effect in 2015. The Chancellor set out plans for a radical new limit, to be set every five years, that will include housing benefit, tax credits, disability benefits and pensioner benefits, although the state pension will be excluded. Governments will have to comply with any breach of the cap by cutting welfare in what George Osborne says will be a ‘limit on the nation’s credit card’. Ministers say the cap is designed to prevent repeats of the spike in incapacity benefit claims under the Conservative governments of the 1980s and 1990s and the surge in housing benefit under Labour. It is also designed to try to bind Labour’s hands by building structural limits into welfare – a huge proportion of Government spending. Governments will have to comply with any breach of the cap by cutting welfare in what George Osborne says will be a 'limit on the nation's credit card' Labour has indicated that it is prepared to consider backing the idea of a cap, though shadow chancellor Ed Balls has controversially suggested pensions might be included too. Mr Osborne told MPs that benefits which fluctuate with the economy, such as jobseeker’s allowance, would be excluded from the cap, as well as the state pension. But he insisted: ‘All other benefits, from tax credits to income support, to the vast majority of housing benefit, will be included in the cap.’ The Tories argue that including state pensions in the cap would not be fair, since it could mean cutting pensions for those who have worked all their lives because costs on housing benefit were getting out of control. Mr Osborne said the limit on total welfare expenditure would be set by the Chancellor at the beginning of each Parliament, and MPs would be asked to support it. If the limit was breached, the Chancellor would have to explain why, and a vote would be held in Parliament. In 2014, the Government is expected to spend £112bn on welfare payments, excluding state pensions. Charlotte Ravenscroft, of the National Council for Voluntary Organisations, warned: ‘Many charities fear the new welfare cap will drive the government to make spending decisions that will lead to vulnerable people bearing the brunt of further cuts.’ Lord Razzall, a Lib Dem trade and industry spokesman, added: ‘The devil will be in the detail.’
will be told to do more to help 16 and refuse to accept training, work placement or traineeship, community work or work experience or school and go straight onto the dole, with 16 and 17-year-olds who want help to find will be excluded. Governments will have to comply what George Osborne says will be a ‘limit on the