UK Business Leader Urges Tax Reform to Combat Youth Unemployment

A prominent UK business leader has urged the government to reform business taxes, specifically targeting the business rates system, as a critical measure to address the nation's youth unemployment crisis. Mark Allan, chief executive of shopping centre owner Landsec, described the growing number of young people not in education, employment, or training (NEETs) as a "catastrophe in slow motion for our economy."

Allan's plea, articulated in an online piece for the Daily Mail, calls for sweeping changes ahead of the upcoming budget, arguing that businesses need the capacity to create entry-level jobs. He highlighted that sectors traditionally offering such opportunities, like retail and hospitality, have been disproportionately affected by rising employment costs and the existing business rates burden. Landsec owns major shopping centers across the UK, including Bluewater in Kent, Liverpool One, and Piccadilly Lights in London.

He proposed replacing the current business rates system, which is based on a property's value, with a tax on commercial rents. This approach, he argued, would be simpler, more transparent, and directly linked to actual economic activity. Under his proposal, taxes would be lower in areas with lower rents, potentially providing the greatest stimulus to regions most in need of jobs and investment. This could also align with ambitions for greater fiscal devolution, allowing mayors to set rates within a national framework.

"If we want to see more young people entering work, we must reduce the burden on the sectors most likely to employ them so that they can invest and recruit with confidence," Allan stated. He emphasized that addressing the NEET crisis cannot solely rely on skills and education initiatives; businesses must also have the financial capacity to hire.

The chief executive pointed to increased employer National Insurance contributions and minimum wage hikes as factors that have raised hiring costs for businesses. He noted that recent business rates reforms, enacted in 2024, have continued to place burdens on the sector, even impacting large retail stores that draw shoppers to high streets.

Nearly one million individuals aged 16 to 24 in the UK are currently classified as NEETs. Allan's comments come as the retail and hospitality sectors continue to navigate economic challenges. While some local leaders, like Greater Manchester Mayor Andy Burnham, have promised specific relief for certain businesses such as pubs and music venues, business leaders like Allan are advocating for a more fundamental, large-scale reform of the tax system.