Fashion Firm Boss Advocates Tax Rebate to Tackle Youth Unemployment
Christopher Nieper, a contemporary embodiment of a Victorian-era philanthropist, runs a thriving family fashion business in Alfreton, Derbyshire. This town faces considerable socio-economic challenges, notably high levels of youth joblessness.
Turning Around a Failing School
Instead of ignoring local issues, Mr. Nieper intervened to revitalize a struggling school. Remarkably, in the last academic year, every 18-year-old graduate secured employment or further education opportunities.
Formula to Combat NEETs
Mr. Nieper believes he has identified a solution to address the widespread issue of NEETs – young individuals Not in Education, Employment, or Training.
The number of British NEETs is alarmingly high, nearing one million. Mr. Nieper describes this situation as a ‘grave threat’.
He argues, ‘The economic burden is unsustainable, encompassing not just welfare costs but also lost productivity, untapped potential, and the enduring repercussions of early joblessness.’
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Proposal for Government Intervention
To mitigate this crisis, Mr. Nieper seeks a meeting with the Business Secretary and senior Treasury officials. He intends to propose a tax incentive for businesses that employ apprentices.
Christopher Nieper with students at the successful David Nieper Academy in Alfreton.
Tax Break Proposal for Apprenticeships
Drawing upon research from the Centre for Social Justice (CSJ), his proposal involves a tax reduction for employers hiring apprentices. This would allow businesses to offset the equivalent of two days’ wages per week against their tax obligations.
Official statistics indicate almost one million young people aged 16-24 are currently classified as NEET.
Business Success and Community Impact
Mr. Nieper’s involvement carries weight. His father, David, established the family business in 1961. The company continues to manufacture its clothing in Alfreton, bucking the trend of fashion brands moving production to lower-wage countries.
David Nieper Academy’s Success
Nine years ago, the business began sponsoring a local school that was among the lowest-performing in the UK. Now, the David Nieper Academy is thriving. Among its 18-year-old leavers last year, 100% progressed into jobs, apprenticeships, or further education. For 16-year-old leavers, the figure was 98.5%. Mr. Nieper asserts, ‘This success can be replicated across the nation.’
Warning of Economic and Social Consequences
Mr. Nieper cautions that if the Government fails to address the NEET issue, ‘we risk cementing another generation of wasted talent, economic stagnation, and societal decline.’
‘However,’ he adds, ‘success would unlock dormant talent, stimulate economic expansion, and ensure the UK’s global competitiveness.’
Scale of the NEET Problem
Recent data reveals that one in seven individuals aged 16-24 are NEET, prompting concerns about a weakening work ethic among younger generations.
Economic Benefits of Apprenticeship Scheme
CSJ modeling suggests Mr. Nieper’s apprenticeship plan would initially cost the Government £10,166 annually per full-time apprentice earning £25,400 per year. However, the think-tank estimates that within five years, a typical apprentice would contribute a net £59,500 to national finances through taxes and reduced welfare payments. Reducing NEET numbers by 52% over five years, returning to pre-pandemic unemployment levels, could boost public finances by up to £23 billion.
Challenges and Rising Apprentice Minimum Wage
While these figures are projections, the severity of the NEET problem is widely acknowledged. The situation is compounded by an impending 18% increase in the minimum wage for apprentices, rising to £7.55 per hour next month, which may deter businesses.
Concerns Over Apprenticeship Levy
Businesses have also voiced dissatisfaction with the apprenticeship levy – a 0.5% tax on companies with payrolls exceeding £3 million. They argue it inadequately encourages youth employment. Levy funds are earmarked for specific training types, making them inaccessible to many employers. Mr. Nieper comments, ‘It’s no surprise nearly a million young people are already marginalized.’
Industry Perspective on Apprenticeship Support
Jamie Cater from Make UK, a manufacturing industry body, emphasizes that successful NEET reduction requires ‘improved support’ for apprenticeship training providers. He notes, ‘Engineering and manufacturing apprenticeships have declined by 42% in under ten years.’
He attributes this decline largely to fewer entry-level apprenticeship opportunities for young people, often due to ‘insufficient’ funding for training providers.
Mounting Fears of Declining Work Ethic
Concerns about a significant erosion of work ethic among young people are intensifying.
Work-Limiting Health Conditions
A Department for Work and Pensions report indicates that 1.2 million 16-24 year olds report having a health condition that limits their ability to work.
Young Workers Considering Leaving Workforce
PwC research reveals that one in four 18-24 year olds have considered leaving the workforce. Cited reasons include poor mental health and low confidence.
Broader Economic Inactivity
Approximately one in ten Britons, 4.4 million people, are reportedly considering abandoning work. Official data from last year showed 9.3 million people, a fifth of working-age individuals, classified as ‘economically inactive’ – neither employed nor seeking work. This includes 2.8 million out of work due to long-term illness, a substantial portion of which is mental health related.
Government Focus on Benefits Reform
This situation highlights the challenge facing the Labour Party as it attempts to reduce the UK’s growing welfare bill, amidst internal resistance, ahead of the Chancellor’s Spring Statement. Last week, Work and Pensions Secretary Liz Kendall announced plans to reduce benefits to save £5 billion annually by the decade’s end.
Call for Collaborative Solutions
Katie Johnston from PwC stresses the urgency for collaborative action: ‘This is a bold move [benefits reform] which will undoubtedly draw criticism, but underscores the complexity of preventing long-term inactivity among the most vulnerable.’
She concludes, ‘Employers and the Government must confront the genuine risk that many currently employed individuals may exit the workforce and become reliant on benefits.’