The 2014 budget should focus on improving youth unemployment, including tax breaks for young entrepreneurs, according to the British Chamber of Commerce (BCC).
The business group suggested that increasing the tax relief available through the Enterprise Investment Scheme (EIS) from 30% to 50% for investors in businesses run by under-24s would help more young people set up and grow their own business.
The suggestion comes after figures released last week by the Office for National Statistics placed the unemployment rate for 16 to 24-year olds at 19.9%.
John Longworth, Director General of the BCC, said:
“Helping British youth in the way we propose would cost less than 7% of what the government spent on overseas aid last year… If government helps businesses overcome the real risks they are facing today, the private sector will invest in a skilled workforce for the future.”
The BCC also suggested introducing a £1,000 payment to businesses who hire long-term unemployed young people or a new apprentice, saying this would create 100,000 new jobs in 2014.
The budget will be announced on 19 March. A spokesperson for HM Treasury said that a number of measures to deal with youth unemployment have already been planned.