The North and Western Lancashire Chamber of Commerce urged Mr Osbourne to act to avoid a “lost generation” as the UK economy continues its recovery.
The chamber’s chief executive Babs Murphy called on Mr Osborne to use his Budget speech on March 19 to focus on youth employment, training and enterprise.
She said: “The crisis of confidence separating Britain’s employers and young people can’t wait for political posturing or the electoral cycle.
“Businesses across Britain tell me they want to hire young people. Yet many cannot afford to take the risk, especially at a time when other, more qualified applicants are coming forward for the job vacancies on offer.
“If the Chancellor wants to avoid a lost generation among today’s 16 to 24-year-olds, he must use the spring Budget to help businesses take on and train up young people, whether they are going straight into jobs or into apprenticeships.”
Unemployment in the North West now stands at 7.9 per cent, a total of 270,000 people.
Young people aged 16 to 24 have been particularly badly hit by the recession.
Ms Murphy added there should also be tax incentives for entrepeneurs who invest in businesses started up by school and college leavers and graduates.:
She said: “The Chancellor rightly wants to boost business investment in this year’s Budget and we support measures to do this, but not just for plant and machinery.
“We know there are many serious structural issues that need to be addressed to create a truly great UK economy, but not all of them can be resolved at this point.
“Getting young people into employment is vital, pressing, and easily affordable right now. If government helps businesses overcome the real risks they are facing today, the private sector will invest in a skilled workforce for the future.”