Prime Minister Andy Burnham faces a crucial moment to reform youth sickness benefits, according to political commentator Tim Newark. With a welfare bill of £333 billion, personal independence payments (PIPs) allow young people with anxiety issues to receive up to £100 more than those working part-time minimum wage jobs.
Current statistics on youth claims
Some 87,000 16- and 17-year-olds are claiming PIPs, with two thirds receiving £194 a week for mental health issues including anxiety, depression and autism. A teenager working a 12-hour week on minimum wage would take home just £94, making benefits twice as lucrative. This non-means-tested benefit is an unfair disincentive to work, Newark argues.
The number of teenagers not in education, employment or training (Neets) has ballooned to more than one million. Incapacity benefit claimants are projected to rise from 1.4 million to four million by 2030. Britain has 700,000 more people out of work due to health concerns than before the pandemic, unlike other countries where employment rates have recovered.
Comparison with Dutch approach
The Netherlands tackled a similar Neets problem by cutting the minimum wage for teenagers to £3.83 an hour, compared to the UK's £10.85. Dutch wages are staggered from age 15 to 21, with youngest earning almost a third of older employees. They also require young benefit claimants to do community work. As a result, Dutch Neets stand at 4.9% versus 12.8% in the UK.
Newark notes that industries like catering are struggling to recruit young workers and are instead hiring migrants. He argues that easy benefits and Labour tax rises, including higher national insurance and minimum wage, discourage employers from taking on young staff.
Political opportunity for Burnham
Unlike predecessor Keir Starmer, who faced left-wing rebellion when attempting welfare cuts after his 2024 landslide, Burnham has won approval from radical backbenchers and now has a short window to push reforms. Burnham has promised to change 40 years of politics and must live up to that pledge, says Newark. He proposes that young people should not receive PIPs unless they are in training or voluntary work, which would encourage a healthier, working population and generate funds for other pledges like social care reform.
