The Conservative Party leader said that such a move would in effect cut companies' tax burden by £2.6bn and ease the pressure the long-term unemployed place on the public purse.
Under the scheme proposed by the Tories, a company would receive a £2,500 rebate for taking on an unemployed staffer, saving the government more than £8,000 in benefits.
The plans, unveiled in a speech this morning, mark the opening of a war of words with the government as pressure grows on Labour to set out its tax plans to alleviate the pressure on the taxpayer as the economic climate worsens.
Yesterday, Gordon Brown hinted that tax cuts could be set out in the upcoming pre-budget report. However, questions have remained over the power of the government to cut taxes in light of the huge budget deficit.
Tories unveil plans to 'cut business tax'
David Cameron has set out plans to create 350,000 jobs by cutting national insurance payments for companies that employ people who have been out of work for more than three months.
