Youth Unemployment

Tuesday 20th January 2026 Lords Chamber

Question

14:59

Asked by

[Lord Leigh of Hurley]

To ask His Majesty’s Government what assessment they have made of the rising level of youth unemployment.

[The Minister of State, Department for Education and Department for Work and Pensions (Baroness Smith of Malvern) (Lab)]

My Lords, since May 2022, unemployment of young people has been rising. There are now almost 1 million young people not in education, employment or training. Young people face challenges such as lower skills, lack of work experience and a rise in reported health issues. In response, the Government are investing an additional £1.5 billion over the next three years through the youth guarantee and the growth and skills levy to help young people earn and learn. In addition, an independent review led by Alan Milburn will focus on the causes of youth unemployment.

[Lord Leigh of Hurley (Con)]

Indeed, and this very morning the ONS announced that youth unemployment has risen yet again. Our national living wage is now approaching that of France, which has a staggering youth unemployment rate of 20%. Even the Resolution Foundation agrees that when the national living wage went up for 18 to 20 year-olds, unemployment went up as a direct result. Have the Government done any risk assessments to see at what point a higher national living wage, especially for 18 to 20 year-olds, affects employment and increases unemployment?

[Baroness Smith of Malvern (Lab)]

As the noble Lord knows, and as was the case under the previous Government and from the time that the Low Pay Commission was set up, we explicitly asked the commission to consider the implications on employment of recommendations around increases in the living wage. We will continue to do that so that we can both make progress on getting young people back into work and ensure that they are fairly rewarded when they are there.

[Lord Londesborough (CB)]

My Lords, I appreciate that the Government’s youth guarantee scheme is well intentioned, but would it not be more effective if it applied to those 18 to 21 year-olds who have been out of work and education for six months rather than 18 months—by which time many will have lost hope and confidence, and may have, in effect, checked out? I know from my experience as an employer that the earlier that you hire the young, both skilled and unskilled, the greater the chance of success. Does the Minister agree?

[Baroness Smith of Malvern (Lab)]

The noble Lord is talking about the Government’s job guarantee, which will come in after 18 months with a guaranteed job for all those on universal credit. However, it is not the case that there is no action under the youth guarantee before that. The new youth guarantee gateway will ensure that if, after 13 weeks, a young person is not earning or learning then they will have a meeting followed by four weeks of intensive support. During this period, they will receive tailored guidance and be offered up to six options, which could be work, work experience, sector-based work academy programmes, apprenticeships, training or learning. There will be 300,000 more opportunities funded by this Government to support young people long before they get to that 18-month point. However, that point is a guaranteed jobs backstop.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that, but what assessment has been made of the impact of poor mental health on young people’s ability to enter work? How joined up is the Department for Work and Pensions with the NHS—if it is joined up at all?

[Baroness Smith of Malvern (Lab)]

There are certainly larger numbers of young people who, by virtue of mental health issues, are not in the labour market. That is why we have asked Alan Milburn to focus on this issue, why the Secretary of State for Health has initiated a review into the growing numbers of young people experiencing mental health problems, and why the Department for Education will ensure that there is a mental health professional to support every single school. That is joined-up government.

[Baroness Curran (Lab)]

My Lords, does my noble friend the Minister agree that the youth guarantee scheme could represent a step change in dealing with profound issues around youth unemployment? Does the scheme include a gender analysis to make sure that young girls get those opportunities, alongside young boys or young men and women?

[Baroness Smith of Malvern (Lab)]

My noble friend makes an important point. We will certainly ensure that we properly evaluate the youth guarantee trailblazers that are currently in place in eight areas, and the much- expanded national youth guarantee that we are now funding, and consider the sorts of impacts that my noble friend has identified.

[Lord Evans of Rainow (Con)]

My Lords, some of the best job opportunities are with some of our outstanding engineering companies throughout the United Kingdom, but some schools, colleges and universities do not allow companies involved in defence contracts to attend job fairs. What advice would the Minister give to schools and universities about the appropriateness of defence companies attending job fairs?

[Baroness Smith of Malvern (Lab)]

My advice would be that the defence industry is an enormously important part of this country’s engineering base. It is one of the eight areas identified in this Government’s industrial strategy and our young people should be encouraged to take advantage of the opportunities that there are in that industry.

[Lord Laming (CB)]

My Lords, the Minister will agree that this transition from school to employment is a critical stage in the life of every young person. Could she assure the House that all steps have been taken to ensure that the link between services for children and adult services is reinforced so that children do not find themselves fallen off a cliff at the end of school?

[Baroness Smith of Malvern (Lab)]

The noble Lord makes an enormously important point. It is sometimes at the point that young people finish school that they are lost to education or employment. That is why we will also put greater responsibilities on to schools to ensure the destinations of their pupils. We will deliver an automatic guarantee and automatic enrolment for young people into a college, and we will improve the risk of NEET indicators to identify earlier those young people who might end up not earning or learning.

[Lord Bailey of Paddington (Con)]

My Lords, given that the poorest families in this country cannot afford for their children to do endless training courses, what work is being done to make sure these lead to full-time, proper employment that pays those families who are sending their young people to endless government training courses?

[Baroness Smith of Malvern (Lab)]

The training courses that will be provided as part of the youth guarantee will not be charged for, and neither will the improved training that we will provide post-16 or apprenticeships, where young people will be earning at the same time as they are learning. If the noble Lord is making a point about the cost of living pressures on young people then I wholly accept that, but our responsibility is to ensure that those young people, through the new, free opportunities provided by the youth guarantee, are set off on a life that will enable them to build a good and high income for themselves and their families.

[Baroness Uddin (Non-Afl)]

My Lords, I welcome this initiative and thank the Minister for her responses. Is she aware that opportunities for young people with disabilities are very fractious at the moment? Will the Government ensure that people with all different disabilities, including autism, have the opportunity to benefit from this scheme with the kind of support that is promised?

[Baroness Smith of Malvern (Lab)]

My noble friend makes an important point. As I said in my Answer, it is one of the reasons why young people find it difficult to get into either further training or the workplace. We will certainly ensure, as we are doing through additional support for employers in apprenticeships, that where a young person has a disability, that support will be available to them and to the employer offering them the opportunity to work.

[Baroness Stedman-Scott (Con)]

My Lords, I acknowledge the work that the Government are doing to improve the situation for young people, but businesses are clear that the Employment Rights Act, the Government’s minimum wage rules and spiralling business rates are the direct causes of young people being kept out of the labour market. We can solve this problem only by enabling business to create jobs. How are His Majesty’s Government going to get employers to employ people when the risk environment that has been created is just so high, and what are they going to do to change this problem?

[Baroness Smith of Malvern (Lab)]

It is obviously the case that we need to support employers to take on young people who have been unemployed for a long period, which is why we will fully fund the job opportunities for young people who have been on universal credit for 18 months. But if it were the case that only the actions of this Government had been responsible for youth unemployment then we would not have seen the figures rising since May 2022 and we would not be seeing the same problem around the world. What is important is that this Government are taking action, including providing the financial support, to ensure that young people get back into work. I am glad that the noble Baroness supports those efforts.