Labour must undertake sweeping welfare reforms or risk condemning a 'lost generation' of young people to long-term dependency on benefits, former cabinet minister Alan Milburn will warn today.
Alarming projections for youth unemployment
In his long-awaited report, Milburn, who served as health secretary under Tony Blair, will sound the alarm over the rising number of young people not in education, employment, or training (Neets). He projects that without urgent action, the number of Neets will increase by a quarter to 1.25 million by the end of the decade, meaning one in six young people could be on jobless benefits.
Britain's youth jobs crisis already surpasses that of countries such as Greece, France, and Spain. Milburn will argue that comprehensive reforms to the welfare, education, and health systems are essential to prevent the situation from deteriorating further.
Critique of piecemeal approaches
The former health secretary will tell ministers that introducing piecemeal schemes on top of a 'broken system' is destined to fail. However, he will stop short of calling on the government to reverse measures that employers claim make it harder to hire young people, such as the new workers' rights charter and significant increases in the minimum wage. Detailed reform proposals are not expected until autumn.
Today's report asserts that the welfare state, originally designed as a safety net, is now 'exacerbating inactivity'. It highlights a surge in diagnoses for mental health conditions like anxiety, depression, and autism, which is locking many young people out of the workforce. Simultaneously, a decline in entry-level jobs is making it harder for them to gain a foothold.
Risk of permanent detachment
Milburn will emphasise that a growing number of Neets risk becoming permanently detached from the labour market. 'Six in ten have never had a job. Twenty years ago, that figure was closer to four in ten,' he will state. 'Detachment is no longer temporary. For too many young people it is becoming permanent. We are at risk of a lost generation.'
The report notes that 84% of Neets want a job or training, but opportunities have dwindled. Vacancies in hospitality have halved in four years, Saturday jobs are in 'freefall', and apprenticeship starts have dropped by 35% over the past decade.
Political reactions
The Conservatives have blamed Labour policies, such as the £25 billion National Insurance hike, for fuelling the crisis by making it more expensive to employ young people. Shadow work and pensions secretary Helen Whately stated: 'Every policy choice Labour has made, from their jobs tax, capping apprenticeship funding, or trapping young people on welfare, has made it harder for a young person to take their first step into work.'
Ryan Wain of the Tony Blair Institute supported Milburn's assessment: 'An economic crisis has become a moral one as nearly a million young people are written off. Wholesale, far-reaching reform is necessary.'
Welfare system under fire
The report is sharply critical of the welfare system, noting that for every £1 spent on employment support for under-25s, around £25 is spent on benefits. Milburn will argue: 'This is not a failure of young people. It is a failure of a system stuck in the past.' He calls for in-kind support over cash payments for conditions that do not limit ability to work, and for making it cheaper and easier for businesses to hire young people.
Marks & Spencer boss Stuart Machin described the findings as 'shocking but not surprising', adding that a Saturday job in retail changed his life and that similar opportunities must be provided to every young person.
