The Chancellor George Osborne has announced government plans to remove the requirement for employers to pay national insurance contributions (NICs) for young people under 21.

In the Autumn Statement Osborne said an estimated 1.5m people stood to benefit from the change, which will call for new legislation and is set to be introduced in April 2015.

Osborne paid tribute to lobbying by the One Million Jobs campaign which has backed the initiative. The Chancellor said that Treasury calculation show employing someone on £12,000 will become £500 cheaper, and taking on someone on £16,000 will become £1,000 cheaper.

Abolishing employer NICs for under-21 year oldsearning less than £813 a week (equivalent to the point at which higher rate tax is charged)would make it cheaper for businesses to employ young people, remove the cap on highereducation student numbers, put employers at the heart of the apprenticeships system and improving basic skills training.