Youth Unemployment

Wednesday 28th January 2026 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I inform the House that Mr Speaker has selected the amendment tabled in the name of the Prime Minister.

16:09

[Helen Whately (Faversham and Mid Kent) (Con)]

I beg to move,

That this House regrets that both youth unemployment and the numbers of young people not in education, employment or training are rising as a result of the Government’s policies, such as increasing the rate of employer’s National Insurance contributions, reducing business rates relief for 2025-26 for retail, leisure and hospitality businesses, and passing the Employment Rights Act 2025; notes that these policies have heavily impacted the retail, leisure and hospitality sectors where young people often have their first job; further regrets that the Government’s inability to reform the welfare system will mean that young people struggling to find work are more likely to become trapped in welfare benefits dependency; and calls on the Government to back business, scrap business rates for pubs and high street shops, and back job opportunities for young people.

This afternoon we are here to talk about young people—the young people who wake up every morning with nowhere to go: no classroom, no workplace, no sense that today will be different from yesterday. It is part of our job to put ourselves in other people’s shoes. Today, those are the shoes of a young man or woman who has just left school, college or university, and is setting out on real life in the world of work. That should be a moment of liberation, trepidation and excitement because the world is at their feet, but right now, for hundreds of thousands of young people, it is not.

Just a few days ago, I was with a constituent who has just finished school. She is great; she has GCSEs and A-levels, she has done work experience, and she is charming and presentable. She has been applying for jobs day after day, but can she get one? Not a squeak—and that is in the bustling and vibrant economy of the south-east of England. She told me that it can be lonely being stuck at home all day applying for jobs, but she is not alone; she is in the company of many thousands of young people. Over 700,000 young people are unemployed—more than the entire population of Sheffield—and the figures are getting worse. Our youth unemployment rate is rising faster than that of any other G7 country. Nearly 1 million young people are not in education, employment or training, and over 700,000 university graduates are on out-of-work benefits.

Those are not just statistics; they are lives knocked off course—young women and men putting in hundreds of job applications and getting hundreds of rejections. They are getting knocked back again and again, and signing on to benefits because they see no other way. They are missing out on the chance to have money in their pockets that they have earned themselves, on the first step towards independence, and on the experience gained in the early years in work, on which future working lives are built. Forget saving to buy a first car or home; dreams and ambitions are being shot to pieces. These people are becoming Britain’s lost generation.

[Tulip Siddiq (Hampstead and Highgate) (Lab)]

I have a lot of sympathy for the situation that the hon. Lady describes. The number of people who are NEET is very high, but that trend started in 2021, when her party was in government—the election was not until two years ago. Why did the Conservatives not do anything about the situation then?

[Helen Whately]

I am glad that the hon. Lady has some sympathy with the position of young people who are struggling to get jobs. My party halved unemployment; her party’s record is of unemployment going up and up. Since Labour has been in power, unemployment has gone up every single month.

What is going on? What is going on is them: the Labour Government. Same old Labour—in they come and up go taxes and up goes unemployment, every single time. They put taxes up by £36 billion in their first Budget, and not just any old taxes. Their national insurance hike was specifically a tax on employment—literally a jobs tax. If you tax it, you will get less of it. That is not rocket science; it is basic economics.

[Graham Stuart (Beverley and Holderness) (Con)]

UKHospitality says that we could be seeing the death of the great British summer job, and even Labour’s own Alan Milburn has warned that there is a long-standing decline in the number of 16 and 17-year-olds getting Saturday jobs. Previous Labour Governments always shoved up youth unemployment, but never before has Labour threatened to destroy the great British summer job. That is much to be regretted, and it is about time that the Government turned around their jobs tax and Employment Rights Bill policies.

[Helen Whately]

My right hon. Friend is absolutely right. Summer and holiday jobs are important ways for young people to gain experience before they leave education and seek full-time jobs, but there has been a shocking decline in the availability of such jobs because of this Government, who have increased regulation and the cost of employment—that is exactly the problem.

On exactly the point about regulation and red tape, the Employment Rights Bill is making it harder for businesses to employ people. Labour says that it wants to achieve growth, but its policies are obviously going to achieve the exact opposite. The problem is that Labour Members do not understand business. Have they any idea how hard it is to break even, let alone to make a profit; any idea how hard it is for people who have started a business to bring in enough to cover the payroll each month, never mind pay themselves; or any idea how hard it is for business owners to make their staff redundant because they cannot afford to keep paying them? Of course they do not, because how many Labour Front Benchers have worked in a business—I am not counting union officials—let alone run one?

[Alex McIntyre (Gloucester) (Lab)]

As my previous career was in advising businesses up and down the country, I take some issue with the hon. Lady’s point that there is no experience among Labour Members. She says that taxes, particularly the rise in national insurance, are causing the rise in youth unemployment, but does she know at what level of income young people, specifically those under 21, start to attract national insurance contributions?

[Helen Whately]

I am perfectly well aware of the policy on national insurance. I take the hon. Gentleman’s point that some Labour MPs do have business experience, but if we look at Labour Front Benchers, particularly those in the Cabinet, we will see that they are few and far between. If he has been talking to businesses—he clearly knows some—he will hear them say, as they have said directly to me and many of my hon. Friends, that it is the Labour Government’s policies that are making it so hard and so expensive to employ people, particularly young people. Even if Government Members do not have business experience, they could and should listen to what businesses have been telling them.

For instance, Kate Nicholls of UKHospitality said that Labour’s 2024 Budget did “unthinkable damage” to the sector. She was backed up by her colleague, Allen Simpson, who said recently that if the Government continue their approach,

“we will only see job losses and business closures accelerate.”

That sector has shed over 100,000 jobs under this Government.

Jane Gratton, from the British Chambers of Commerce, said that Labour’s policies are

“deeply worrying for employers. They will increase employment costs, complexity and risk for firms, particularly SMEs…Government needs to help not hinder businesses”.

That is the crux of the matter: Labour sees businesses as a cash cow, not as the engine of the economy, and young people in particular are suffering as a result.

Before businesses start letting people go, they generally stop hiring, and that is what they are doing. And when they stop hiring, who gets hit hardest? Young people. By hitting hospitality—all those pubs and cafés where people get their first jobs—the Government are hitting young people again. The simple fact is that there are fewer jobs for young people under this Government. This unemployment disaster for young people is not something that has just happened on this Labour Government’s watch—it is a disaster of their making.

[Wendy Morton (Aldridge-Brownhills) (Con)]

My hon. Friend makes the point so well. It is deeply worrying that in the Walsall borough, in my constituency, youth unemployment is higher than the national average. The truth is that youth unemployment has skyrocketed under Labour’s watch. Does my hon. Friend agree that a big part of the problem is that we have a Labour Government who do not understand that the more they squeeze business, the more they squeeze job opportunities for young people?

[Helen Whately]

My right hon. Friend makes the point so clearly. It is so obvious to the Conservatives, as the party of business, that if the Government keep taxing business, there will be fewer jobs—but they just do not seem to get it.

Labour Members do know that they are in trouble, though. That is why they are talking up their youth programmes, youth hubs and youth guarantees—[Laughter.] Labour Members are laughing, but they should listen. The hon. Member for Exeter (Steve Race) says from a sedentary position that it was our programme —exactly that! Most of these things are just rebrands of programmes that the Conservatives started. We started youth hubs. Changing the name of the youth offer to the “youth guarantee” does not solve the problem. Of course there is part to play for training programmes and work placements in helping people to bridge the gap between school and work, but Government programmes are not the answer to the fundamental problem. Young people want jobs, and this Government are killing jobs.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The shadow Secretary of State is obviously well known for speaking clearly and candidly, which is refreshing. Can she clearly and candidly answer these questions? Which rights does she think young people should be denied in order to get into work? By how much would she cut the minimum wage to facilitate those young people getting back into work? Unfortunately, she cannot have it both ways. She has just made the point that those rights are hindering business, so what would she do to cut them? Will she make a clear commitment at the Dispatch Box?

[Helen Whately]

I enjoyed the way in which the hon. Gentleman led into his question with a bit of flattery, but I will not be drawn on his attempt to make me talk about the minimum wage or down the routes that he asks me to take, as much as he may love me to do so.

However, I will talk about our record in government. We halved unemployment. We got record numbers of people into work. We backed businesses to create 800 jobs for every day that we were in government. We reformed welfare to make work pay. We brought down the benefits bill. None of those things are on the cards under this Labour Government. They are crushing businesses with taxes and red tape, destroying jobs and driving up unemployment. They U-turned on welfare savings and put up taxes on working people by £26 billion at the last Budget to pay for the ballooning benefits bill.

I will not argue that we got everything right. Some of the graduates struggling to get jobs have degrees that are not actually of any help to them, and they took those degrees when we were in government. Under us, through the pandemic and afterwards, the number of young people dropping out of work and on to benefits because of their mental health went up. We wanted to end the stigma around mental illness, but the consequences have been far-reaching. Our welfare system was not designed to support people with milder mental health problems or milder neurodiversity, or for a time when a quarter of people report themselves as disabled.

The system is not working; instead, it is funnelling people off work and on to benefits. Now, with the Government’s failure to reform welfare, young people are stuck in a benefits trap—they are better off on benefits and fearful of losing them if they get a job. Let us add to that the stress and misery of trying and failing again and again to get a job, because jobs are fewer and farther between. Most young people I have spoken to do not want to be on benefits, but that is where they are ending up.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

Does the hon. Lady at least welcome the job guarantee for 18 to 21-year-olds? Does she think that that represents this Government working with employers such as the Premier League and the FA to create opportunities? Is that not in stark contrast with her Government, who watched opportunities disappear while they did FA?

[Helen Whately]

If the hon. Gentleman had been listening, he would have heard me say that there is a place for programmes that support young people into work, particularly if they find that they do not have the skills needed to do the jobs in their area. When we were in government, we had programmes like that, and those programmes are being continued under this Government.

However, there is a fundamental problem with the idea and concept of a youth guarantee, which has wobbled a bit at different announcements and different times. The problem is that the Government are trying to guarantee somebody a job, but destroying the jobs that businesses are creating. The right way to solve the problem is to back businesses to create jobs, not take some kind of socialist, communist or even Marxist approach and create a job with taxpayers’ money so that somebody is in work.

The situation is looking pretty bleak. That is a disaster for a generation of young people and our economy, but it does not have to be like this. Even in a world of artificial intelligence, there is another way. It starts with backing businesses, because they are the ones that create jobs, and cutting taxes, cutting red tape, scrapping the swathes of regulation that stop businesses giving young people a summer job or a Saturday shift, and getting government out of the way so that young people can get on.

I welcome the Government’s U-turn on probation periods—many businesses told me that that policy would have deterred them from taking a chance on a young person. I also welcome the Government’s latest U-turn on business rates for pubs How many U-turns are we on? Is it 13? What about the rest of hospitality? Why not adopt our policy and scrap business rates, not just for pubs, but for high street shops too? I ask the Minister not just to send young people off on more training courses or work experience schemes. What young people want now is jobs. Why not adopt our policy to double the number of apprenticeships and end debt-trap degrees, too?

We do not have to have a lost generation, but we need a Government who will make different choices—who will back businesses to create jobs, scrap degrees that do not pay back, reform welfare so that it pays to work, help this generation make their way in life, and get our country working again.

16:25

[The Minister of State, Department for Work and Pensions (Dame Diana Johnson)]

I beg to move an amendment, to leave out from “House” to end and insert:

“welcomes the Government’s commitment to invest in young people’s futures; notes that the UK has the second highest youth employment rate in the G7; recognises that the Government announced more than £1.5 billion of investment over the next three years, consisting of £820 million of funding for the Youth Guarantee to support young people to earn or learn, and £725 million for the Growth and Skills Levy; further welcomes that the expanded Youth Guarantee will reach almost 900,000 young people, including through Youth Hubs in every area in Great Britain and a new Youth Guarantee Gateway; further notes that this investment will also create around 300,000 more opportunities to gain workplace experience and training; and further recognises that, as part of the Youth Guarantee, the Government is breaking the cycle of unemployment by guaranteeing paid work to around 55,000 young people aged 18 to 21 who have been on Universal Credit and looking for work for 18 months.”

In the north, we would say that the hon. Member for Faversham and Mid Kent (Helen Whately) has some brass neck to make the speech she has just delivered. As an MP who has been in the House for some time, it might be helpful to us all if I remind the hon. Lady about her party’s record over the past 14 years. Her party fumbled the handling of the pandemic, setting back a whole generation of kids. It failed to deal with the growing mental health crisis among young people, left school buildings to crumble, and decimated youth centres.

Let us just look at the facts about youth employment specifically. Under the last Conservative Government, the number of young people not in education, employment or training grew by 45% in just three years. Scarily, that left almost 1 million young people—one in eight—on the sidelines when the Conservatives were chucked out of office.

[Several hon. Members rose—]

[Dame Diana Johnson]

I am just going to complete the Conservatives’ record, because I think it would be beneficial for us all to hear it. When the Conservatives were chucked out, the youth unemployment rate stood at 13%, compared with just over 9% two years earlier, and the number of young people economically inactive due to long-term sickness had more than doubled in five years to over a quarter of a million on the Conservatives’ watch. They also failed to support young people in the face of the changing retail sector, for example. Many young people start their careers in that sector—I certainly started with a Saturday job—but retail job opportunities have fallen since 2017 as new technology changes how people shop and how shops employ people. The Conservatives took no action on that, so their legacy for young people looks pretty dismal from virtually every angle.

[Graham Stuart]

Will the Minister give way?

[Dame Diana Johnson]

I will give way to my near neighbour.

[Graham Stuart]

In my experience, my neighbour is always a fair and credible person, so will she confirm that youth unemployment reduced over the 14 years that the Conservatives were in government, rather than focusing on some selective period over covid in order to give an entirely partisan and biased view of the statistics? The numbers went down, did they not? The only Government who put up youth unemployment by 45% were the last Labour Government.

[Dame Diana Johnson]

The right hon. Gentleman, who is a close neighbour in East Yorkshire, says that I am being partial and only giving part of the picture. I think I have been setting out a very full explanation of what the Conservatives delivered for young people over 14 years.

To expand on that point a little, the Conservatives are now talking about the need to increase apprenticeships, for example. On their watch, there was a collapse in youth apprenticeships—starts were down by almost 40% under the Conservative Government over the past decade, leaving this Labour Government to reverse that decline. They have also been critical of the welfare system for trapping people out of work; they seem to have forgotten that they presided over it for 14 years. The Conservatives introduced that system, and it has now been left to us to address the disincentive to work that they built into it. We started to deal with that task through the Universal Credit Act last year.

[Joe Robertson (Isle of Wight East) (Con)]

Will the Minister give way?

[Dame Diana Johnson]

No, I will make some progress. Put simply, the Conservatives cut off opportunity for young people. They wrote them off, and then they blamed young people for the position they were in. On the Government Benches, we know that young people are this country’s future and that their success is Britain’s success. We are not prepared to sit on our hands and let all that talent and potential go unused. That is not good enough for those young people, and it is not good enough for this country, which needs the contribution they can offer more than ever and not just now, but for the next 40 years.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Will the Minister give way?

[Dame Diana Johnson]

No, I am going to make some progress. We are investing in young people to turn around the dire legacy that the Conservatives left behind. We are supporting young people so that they can fulfil their potential, breaking the cycle of wasted talent cascading down generations. We are starting already to see some signs of progress. We have got record levels of employment and youth employment is up by 153,000 in the past year, but the scale of the crisis brewed up by the Conservatives requires much more than that. The number of young people neither learning nor earning is equivalent to three cities the size of Hull, so we know that there is more to do.

[Dr Evans]

Will the Minister give way?

[Dame Diana Johnson]

I will later on, but I want to get this on the record. We know that if someone falls out of the workforce—[Interruption.] The Conservative MPs chuntering from a sedentary position might just want to listen to this, because it is about the future of our country. We know that if someone falls out of the workforce when they are young, they can lose out on £1 million in earnings, and it costs the state a similar amount to support them, but if we can ensure that they get the right opportunities and support early on, we can change their life stories for the better. That is why we are helping more young people into work, and it is why youth employment is a priority for us in the DWP.

[Jim Dickson (Dartford) (Lab)]

In my constituency and across Kent we are pleased to be one of the trailblazer areas for the Connect to Work programme, which started under this Government, not the last Government. It gives people personalised support to stay in work and to get jobs in the first place, ensuring that they have a long-term future in the workplace. Is that not the sort of serious intervention we need to deal with unemployment among young people?

[Dame Diana Johnson]

My hon. Friend is exactly right. That is the kind of initiative that will help deliver for these young people who are out of work, particularly with health problems, health conditions and disabilities.

I think all of us in the House would recognise how disheartening it can be for young people who are looking for work who cannot find that opportunity. They may not have the confidence or knowledge to apply for the jobs that are out there. Let us put ourselves in the shoes of an 18-year-old who has perhaps lost their way a little bit and does not have the confidence; it can be difficult for them to go into a jobcentre to find out what opportunities are available. That is why, as part of the youth guarantee, we are expanding the DWP youth hubs located in places such as football clubs and other sports facilities to more than 350 areas across Great Britain. I accept that youth hubs were part of the previous Government’s plans to deal with youth unemployment, but they were small in number. We are expanding them to 350.

Youth hubs are helping people such as Erin, a young woman who was unemployed for two years and struggling with her motivation. After visiting a youth hub based at Crystal Palace football club, she was able to complete a work placement before being offered a permanent job. That came off the back of joining a hospitality programme, which gave her valuable experience and confidence. It goes to show what young people can achieve when they are motivated, confident and have that self-belief. That is why the expansion of youth hubs forms just one part of our wider youth guarantee, which is designed to make sure that no young person is left behind.

[Sir Roger Gale (Herne Bay and Sandwich) (Con)]

In East Kent, there is a company called HatHats, which runs coffee bars. The proprietor philanthropically employs hard-to-employ young people. In the last 12 months for which figures are available, the profit on all 25 of its outlets was £12. As a direct result of this Government’s policies, those young people are losing out on the opportunities that the Minister is describing.

[Dame Diana Johnson]

I will come on to talk a little about some of the accusations levelled at the Government in relation to national insurance contributions, so I shall deal with that point later in my speech, if I may.

The youth hubs will offer a helping hand, whether with writing a CV or with obtaining a work placement to include on a CV. We have announced that over the next three years, we will invest £820 million to support almost 900,000 young people who are on universal credit and looking for work. There will be new dedicated work support sessions, followed by intensive, tailored assistance to help those young people secure the right job, training or learning opportunity. We are backing that up by funding about 300,000 more opportunities for people to gain work experience and training in sectors such as construction and hospitality.

[Andrew Pakes (Peterborough) (Lab)]

I thank my right hon. Friend for her great explanation of youth hubs. We have just opened one at the Peterborough United—Posh—stadium, bringing together all sorts of partnerships. A number of issues are raised by the young people I speak to there, which the youth hub addresses. One of those issues is an element of the Opposition’s record that they have not talked about, namely the decimation of in-work support, and of career services in schools to give young people advice and help. Opposition Members talked a lot about apprentices and undergraduates, but they did not talk about levels 2 and 3, and the engine-room apprentices we need. The youth hub will start getting us back to that in Peterborough.

[Dame Diana Johnson]

My hon. Friend has made his point very well indeed.

Let me return to the subject of the youth guarantee. There will be guaranteed jobs for about 55,000 people over the three years. Companies have already shown an interest in taking on such employees, including E.ON, JD Sports, Tesco and Tui, and we are grateful for the offers that they are making. We Labour Members have tackled these challenges before, under the last Labour Government, through the new deal for young people, and we will do it again now.

[Steve Race (Exeter) (Lab)]

Along with the youth hubs and the youth guarantee, there is the £725 million investment in apprenticeships. With its new technical excellence college status, Exeter college in my constituency is becoming one of the biggest providers of apprenticeships in the country. Does the Minister agree that that stands in stark contrast to the 50% increase in youth unemployment under the last Government?

[Dame Diana Johnson]

My hon. Friend has made his case very well. He referred to the £725 million for the growth and skills levy, which is part of the more than £1.5 billion that has been made available for employment and skills support in the Budget. That is very much needed after the dramatic decline in the number of young people starting apprenticeships under the last Government, which we will reverse. At the same time, we are strengthening our world-leading universities.

[Damian Hinds (East Hampshire) (Con)]

Will the Minister give way?

[Dame Diana Johnson]

I will make some progress, because many Back Benchers want to speak.

The skills White Paper sets out our plan to build a more specialised and more efficient higher education sector that will better meet the needs of the economy. The graduate economic inactivity rate is now at its lowest on record, and we want to build on that. We recognise the need for modern technical skills, and not just the old academic subjects. I saw that for myself at the Ron Dearing university technical college in Hull only last week—young people honing their skills and getting a brilliant education.

No matter what path young people choose, we want them to have the skills to succeed. Skills are vital in the world of work today, but more than a quarter of all vacancies are skills shortage vacancies. That is why, last year, the Prime Minister set out our bold ambition for two thirds of young people to enter higher-level education or training. We have added adult skills to the Department for Work and Pension’s brief, to help us join up employment support and skills more closely, so that young people have genuine pathways into good jobs. We are significantly expanding sector-based work academy programmes—SWAPs—in England and Scotland; there will be more than 145,000 additional places over the next three years. Just today, our colleagues at the Department for Science, Innovation and Technology announced a new package to give people the skills that will enable them to seize the opportunities that artificial intelligence will bring. That includes an expansion of free AI foundation training for all workers, to upskill 10 million people by 2030. All this is about opening up opportunities for young people.

However, we want to make sure that no stone is left unturned. Last month, the Government unveiled our national youth strategy, which is backed by £500 million. It will rebuild the youth services that the Conservative party decimated, and help more young people transition into adulthood. The Secretary of State has commissioned Alan Milburn to complete a wide-ranging investigation into the causes of youth inactivity, and to come up with policy solutions across the piece. As a former Health Secretary, he is well placed to give particular focus to the role of health in all this. That is needed, because over a quarter of young people not in employment, education or training now cite long-term sickness or disability as a barrier—more than double the figure in 2013-14.

Too many people are shut out of the labour market by disability or ill health. This has worsened, especially since covid, so we are rolling out a £1 billion Pathways to Work offer, which brings together programmes such as Connect to Work, which my hon. Friend the Member for Dartford (Jim Dickson) referred to and which I have seen in action in Lewisham, where I met a neurodiverse young man who told me that the personalised support that he was receiving from the team was helping him to stay in work; and WorkWell, which is providing really impressive integrated work and health support that I recently had a chance to see in Cambridge. Pathways to Work will ultimately guarantee access to work, health and skills support for disabled people and those with long-term health conditions who are claiming out-of-work benefits. We already have 1,000 Pathways to Work advisers on hand to provide better one-to-one support. We know that prevention is better than cure, so we want to avoid people falling out of work due to ill health wherever possible, and employers have a unique role to play.

[Sarah Smith (Hyndburn) (Lab)]

Does my right hon. Friend agree that while it is easy to debate who is getting it right and who is getting it wrong, fundamentally, we require a systemic shift in how we look at the problem, which is generational and intergenerational? Everything that she is outlining shows that we are taking a systemic view, to get to the cause of these problems, so that we can finally move forward for the generations that have been let down. We did not have that approach from the previous Government.

[Dame Diana Johnson]

Those are very wise words from my hon. Friend.

I want to say something about employers, because they have a vital role to play in all this. On keeping people in work when they develop an illness or a disability, we are really pleased that we are working with over 100 Vanguard employers to take forward the recommendations in Sir Charlie Mayfield’s “Keep Britain Working” review, and helping to create a picture of what best practice looks like when it comes to building healthy and inclusive workplaces. We have had an outstanding response from businesses, because they know that when their workers win, they win too. Contrary to what some people say and believe, the interests of employees and employers are not diametrically opposed. Everybody wins when workers are secure, happy and healthy.

That leads me on to the Employment Rights Act 2025, which includes reforms such as the extension of statutory sick pay, so that more people can take the time they need to recover, instead of risking longer-term absences. That is not just good for workers; it is good for businesses, too.

I want to address the issue of national insurance contributions and business rates. Let us be clear: employers generally do not have to pay any employer national insurance contributions for employees under the age of 21 or for apprentices under 25. Yesterday we announced that every pub and live music venue will get 15% off its new business rates bill. That is on top of the support announced at the Budget. Bills will then be frozen, in real terms, for a further two years. This Government will always support businesses, giving them the stability that they need to grow, and to create good jobs.

Before I finish, there is one other thing I want to talk about. What happens at the start of people’s working lives can have many consequences for their future, and the same is true of what happens in our childhood. When a young person ends up out of work or training, it is no use pretending that that has suddenly come about in a bubble. Someone who grows up poor is less likely to do well at school and more likely to be a NEET. Poverty, low attainment and low aspiration can not only waste the potential of a young life, but cascade on to the next generation. Shockingly, the number of children in poverty increased by over 900,000 under the Conservatives, which is shameful, and they now come to this House to ask why a generation is struggling.

We are very proud to be lifting the two-child limit. That will have benefits for hundreds of thousands of children, who will be less likely to experience mental health issues, less likely to be unemployed, and more likely to be in work and earning more, yet the Conservatives oppose it. As ever, they seem determined to pull the rug out from under the next generation, and does that not sum them up? They blame; we support. They complain; we fix. They cut; we build.

We will never forget the neglect that left our young people without the hope and opportunity that every generation deserves, but this Government are doing things differently. We are laying the foundations for young people to succeed, and giving them the opportunities that they need and the skills and support to seize them. These opportunities are of course accompanied by obligations to take them up, but that is so much better than a life that is just written off. We are breaking down barriers to opportunity, so that every young person, in every part of our United Kingdom, can fulfil their potential.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

16:45

[Sarah Olney (Richmond Park) (LD)]

Youth unemployment has risen since Labour took power. The rate is now above 15%, which means that more than one in seven 18 to 24-year-olds are not in employment. That is a really troubling statistic, but it has its roots in the Conservatives’ dismal economic record. The economic challenges we face did not develop overnight. The previous Government’s economic chaos and mismanagement damaged jobs and young people’s employment prospects. The Conservative party failed to invest in skills and workforce planning, which is contributing to the shortage of quality entry-level jobs available to people leaving college or university.

[Steff Aquarone (North Norfolk) (LD)]

I have carefully read the Opposition motion on this hugely important issue, and I am rather concerned that transport is not mentioned once. Transport is a massive barrier to employment and training for young people in North Norfolk, but the Conservatives do not seem to realise that it is an issue. Does my hon. Friend agree with me that poor rural public transport is trapping young people in my area in unemployment, and that the Conservatives should apologise to those young people for the state that they have left us in?

[Sarah Olney]

My hon. Friend is right. Young people face so many barriers to accessing both education and employment, and that is very much a legacy of the last Conservative Government and their mismanagement.

Young people are increasingly concerned about the fact that the links between education and employment have become weaker and weaker.

[Amanda Martin (Portsmouth North) (Lab)]

Does the hon. Member agree that, under the Conservatives, career advice in schools was absolutely decimated and hollowed out, pushing young people to the margins? On top of that, does she agree that young people are unable to do the gold-standard apprenticeships that my dad and my brother did, as those apprenticeships were neglected by the Conservatives, in favour of more academic routes?

[Sarah Olney]

The hon. Lady is absolutely right about apprenticeships, and I will say more about them in due course.

In years past, those who went to university and attained a good degree could reasonably expect an entry-level job in the field in which they wanted to work, but now the experience for so many young people is that they enter a job market that is not open to hiring inexperienced people; employers are less willing or able to take a risk on training individuals just out of university. When I spoke to business students from Roehampton University earlier this month, they explained to me their fears that they will be unable to work in the field of their choosing. One student told me that they had even seen an advertisement for a volunteering position that required three years of experience. The job market is so crowded and competitive that the reality for more and more graduates is that they must return to living with their parents after university, with no serious prospect of gaining even an entry-level job.

[Dr Luke Evans]

Does the hon. Member share my concern about the graduate market? We are talking about youth unemployment, but we know from the Office for National Statistics that 257,000 Brits have emigrated, of whom 70% were under the age of 35. We are losing a lot of talent, but that is not being picked up in the figures for youth unemployment, so it is likely that youth unemployment is actually significantly worse, and that is because of the Government’s changes.

[Sarah Olney]

One of my big concerns is that, for our economy, we are not getting that pipeline of young people into those entry-level jobs. That threatens our future sustainability and growth, as well as imperilling the prospects of those young people who cannot gain a role.

Those students also expressed their concerns about artificial intelligence replacing many professional jobs, making the skills that they are learning surplus to requirements for many employers. As the Government look to promote public sector efficiency through using AI, many young people are worried that that will mean even fewer jobs for them.

[Jim Shannon (Strangford) (DUP)]

I always try to be constructive with my interventions and comments. In Northern Ireland, youth unemployment is at 7.3%, but here it is more than double that at, I think, 15.4%. Does the hon. Lady agree that we should look at success stories in this United Kingdom of Great Britain and Northern Ireland where youth unemployment has reduced by so much? In Northern Ireland, we focused on young Protestant males from 12 to 18 who could not get jobs, and reduced the unemployment rate. If we can do that in Northern Ireland, I am quite sure that we could do the same on the mainland. Does the hon. Lady agree that we should look at that?

[Sarah Olney]

The hon. Gentleman always makes constructive interventions. He is absolutely right that we need to look at what works. We need to focus on this issue not just for the health and benefit of our young people but for the economy as a whole.

Although we should continue to invest in technological breakthroughs, I am concerned that the Government do not have a strategy for our young people who could be pushed out of the job market by automation. I would be grateful if the Minister responded to that.

There is also a lack of alternatives for young people who wish to upskill, as the apprenticeship pathway is so limited. Businesses tell me that the apprenticeship levy does not work, despite the Government’s attempts at reform. The Liberal Democrats have long called for reform to replace it with a wider skills and training levy, which would give businesses real flexibility about how they spend the money to train their staff and, consequently, provide young people with a better avenue to enter the workforce. The decision taken to defund level 7 apprenticeships for over-22s risks limiting those opportunities. In 2024-25, 51% of all apprenticeship starts were for those aged 25 and over. That is a critical skills pipeline in areas that are key to economic growth, and while the economy is changing so rapidly, we need to provide opportunities for older workers to retrain so that they can continue to find meaningful work later in life.

The Liberal Democrats would fix the skills and recruitment crisis by investing in education and training, including the availability of apprenticeships and career advice for young people. The current system needs to be reformed. That would include boosting the take-off of apprenticeships by guaranteeing that they are paid at least the national minimum wage from the first year, creating new lifelong skills grants for adults to spend on education and training throughout their lives, and expanding vocational training. Although the Liberal Democrats welcomed discussions in the Budget regarding a wider youth guarantee and a growth and skills levy package, I have yet to understand the timeline for implementation. With youth unemployment rising, I encourage the Government to take quick and active steps to deliver that package.

[Steve Darling (Torbay) (LD)]

In Torbay, we have an incredible organisation called Sound Communities. Some young people are not in the position to take up an apprenticeship because, having suffered significant trauma in their lives, they need to build up their confidence. Sound Communities helps these youngsters get themselves in the right position to take up their place in this world. Does my hon. Friend agree that what we need is long-term funding to support these youngsters, so that they can have the opportunities and futures that they deserve?

[Sarah Olney]

My hon. Friend is absolutely right. There are groups of young people who are facing specific barriers to entering employment, and we need to do all we can to provide them with sustained support to get into and stay in the workplace.

Much of the UK’s current workforce challenges are due to the mistakes made by the current Government, with perhaps no bigger own goal than the surprise increase in employer national insurance contributions in the Chancellor’s first Budget. Almost every business that I, and I am sure many other Members, speak to tells me that the NICs rise blindsided it and has since seriously damaged its cash flow and ability to hire and retain staff. That policy alone has been so damaging to the business sector and has created an environment in which companies are discouraged from hiring young people.

Recent Government decisions include the devastating business rates hike in the Chancellor’s most recent Budget. This is causing huge damage to hospitality firms, with many now considering whether their business remains viable. Our hospitality businesses, which so frequently provide young people with their first jobs, are now on their knees. They need support from the Government. The Government’s statement yesterday on cutting business rates for pubs was a good first step, but we need wholesale reform of our business rates system. That is one more reason why the business community felt so betrayed by the previous Conservative Government, who promised reform but did nothing to help our struggling businesses.

[Wendy Chamberlain (North East Fife) (LD)]

My hon. Friend is highlighting two important things. The increases in on-costs for businesses mean that they are not taking on young people. More importantly, they are not then able to support the supervisory roles that give those young people the development they need, because they cannot make the differentiation in terms of salary. I am standing here as a Scottish MP. The Scottish Government did not pass on the business rate relief the last time. They have confirmed that they will do so for Barnett consequentials, but does she agree that the Scottish Government are simply not doing enough in this area and that, in fact, we are in a worse position than what is being debated today?

[Sarah Olney]

I am grateful to my hon. Friend for her intervention. She speaks very passionately about businesses in Scotland and the situation they are facing. I am sure she is correct to say that it is even more challenging in Scotland.

I am concerned that the Government’s sole focus on pubs and live music venues ignores the other retail, hospitality and leisure sectors which also need support. I therefore urge the Government to adopt Liberal Democrat proposals to cut the rate of VAT on hospitality, accommodation and attractions to 15% until April 2027, which would give our businesses the boost they so desperately need. Our high streets and town centres are in need of urgent help, and I urge the Government to act with all swiftness.

With the hospitality sector struggling to employ new workers, damage is being done to the prospects of our young people who are struggling with unemployment levels, and that will be detrimental to the broader economy. At the heart of this debate is that regular people are finding it incredibly difficult to find a job to support themselves, their partners, their children and their families, and to pay rent, pay for groceries and pay for essentials. That is what must not get lost in this debate.

While the Government seem to be weighing up their options on the EU re-set, they should be reminded that negotiating a new UK-EU customs union is the single biggest step that the UK could take to boost our economy, our businesses and our young people’s job prospects. The appalling agreement negotiated by the Conservative party has been a complete disaster for our country, particularly for small businesses who are held back by reams of red tape and new barriers to trade. So many young people I talk to are simply frustrated that they are the first generation who have to start their career while reaping the consequences of the Conservatives’ botched deal.

It seems evident from the Liberal Democrat Benches that the Government know that the UK must rectify the dismal trade deal negotiated by the Conservatives, and I am yet to hear a compelling reason from the Government as to why Ministers keep refusing to negotiate a new customs agreement with Europe. The steps the Government are taking to rebuild our relationship with the EU are welcomed by the Liberal Democrats, but I urge the Government to be bolder. This House voted in favour of joining a bespoke UK-EU customs union just last month. I urge the Government to seize that momentum, reach out to our European allies and negotiate a deal that would be mutually beneficial, creating countless new jobs for our young people here in the UK.

The Government cannot ignore the difficulties facing our young people anymore. Our young people need to be provided with a pathway for success and fewer barriers to getting on to the career ladder, but I am afraid the Government are failing to facilitate that. I urge Ministers to listen and adopt a joined-up strategy to tackle youth unemployment, invest in young people’s skills, boost apprenticeships and work-based training, and support businesses to create quality jobs.

16:58

[Alice Macdonald (Norwich North) (Lab/Co-op)]

It is a pleasure to speak in this debate on such an important subject.

When I think of youth unemployment, what immediately comes to mind is the young woman I met on the doorstep during the election campaign who told me how she had been looking for work for a long time and just did not know how she was going to get a job. The hopelessness she felt was clear. Like her, far too many young people were left stuck at home and let down under the previous Government. As we have heard, it was during their last term in power that the number of young people not in education, employment or training shot up, growing by almost 50% between 2021 and 2024. They left a situation for young people where doors appeared to only close and never open.

The Government are determined to change that and so am I. From speaking to young people in Norwich, I know that they want that change, too. That is why opportunity has been one of my key priorities since day one, with a focus on opportunity for children and young people. Young people in Norfolk have spoken to me about some of the specific challenges they face—this has been alluded to—such as poor transport infrastructure, so it can be difficult to get to work, and, of course, the challenge of mental health.

But we need to better understand why so many young people have been left behind, which is why I welcome the Alan Milburn review, which will do exactly that. The causes of youth inactivity are not simple; we cannot put them down to one single factor. They are complex, they are not one size fits all, and we have to look at the structural causes as well. It is crucial that in that review the voices of young people themselves are heard. I know there has been a call for evidence, but I hope the Minister can expand on how young people in Norwich and across the country can get involved in this consultation.

I also want to mention the specific challenges faced by young people with special educational needs and disabilities. There is a theme that parents and young people have raised with me time and again in Norwich North. They felt that too often there was a cliff edge at 16 where young people were at risk of being left without adequate support to continue into education or to find a job that met their needs. There is much we disagree on in this House, as we have heard today, but I hope that we can all agree that we want a country where young people are supported into good jobs, work and employment and are able to fulfil their potential.

I welcome the Government’s approach and want to touch on some of the programmes being rolled out so far. There will be 360 youth hubs, and I am pleased that there will be three in Norfolk, including one in Norwich, and thousands more training and workplace opportunities in sectors from construction to health and social care for young people on universal credit, and of course there is the jobs guarantee that means that 18 to 21-year-olds on UC who have been looking for work for more than 18 months will be provided with six months of paid employment.

We must also focus on early intervention. This is key. As Youth Futures has identified, key factors that increase the risk of a young person being not in education, employment or training include poor school attendance, low attainment at GCSE and exclusion. That is why the schools White Paper will also be so important, and why it is vital that this is a whole-of-Government approach. I also welcome that the Government are investing in a new preventive tool that will help share data between councils and schools so that we can identify and support young people most at risk.

I want to turn to the local. I am working closely with the Department for Work and Pensions jobcentre in Norwich, city college and my hon. Friend the Member for Norwich South (Clive Lewis) to identify more work that can be done locally on this important agenda. Indeed, we met yesterday to discuss how we can help match young people with employment opportunities locally. I also regularly meet with local employers and apprenticeship providers to hear their perspectives, and there is much good work already under way. Last year, I was pleased to welcome the Minister for Social Security and Disability to visit Mind in Norwich. We learned about its excellent local routes into employment project, which helps people living with mental health conditions to find and keep paid employment that suits their individual needs. We spoke to a young person who had benefited from that support and a local employer who had given that young person a chance but had also felt many benefits. I am pleased that the Minister was looking at this project as it is exactly the kind of thing we should be supporting. I also welcome the Government’s investment in the connect to work scheme in Norfolk, working with Norfolk county council, which will support over 4,000 Norfolk residents facing extra barriers into work. That will benefit many young people.

Finally, I visited a local sixth form late last year. One of the many questions I was asked was about how we can equalise the minimum wage, because those present told me that they often felt underpaid and undervalued, and I was pleased to be able to tell them that this Government are listening and that paying young people a decent wage does matter. Just a few days later, we raised the national minimum wage for young people. For any Opposition Members who challenged this—and it felt like they were doing so a little bit—I challenge them to look young people in the eye and tell them why they do not deserve to be paid fairly, why their futures should not be invested in, and why they do not deserve that support.

My message to all young people today is that under this Government they will not find false promises or quick solutions that fail to materialise, but they will find a proper plan backed by investment that puts our money where our mouth is and invests in young people’s future.

17:03

[Damian Hinds (East Hampshire) (Con)]

There are many ways that we can express it, but none of them are good: youth unemployment is at 15.9%; it is up 10%; it is up 1.5 percentage points; it is up over 100,000 in the last year; it is at a 10-year high—higher than in the covid era.

Let us be clear: this is not economic inactivity we are talking about; it is unemployment. The definition of unemployment is not about who is claiming benefits; it is about having had no income whatever—not having worked for a paid hour—in the reference week. It is about being available for work and actively looking for work. That is the number that has gone up. The increasing number of people who are both studying and seeking to work—for whom, by the way, zero-hours contracts are especially relevant—is a particular issue, and I will come back to that point.

Unemployment overall has gone up, but it is young people who have borne the brunt; the rate of increase has been almost twice as high for young people as it has overall. To be fair, that is usually the case—when there is rising unemployment, it is always young people who feel it first and hardest. Why? Well, as the shadow Secretary of State, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), said, the first thing that employers do when things look uncertain or difficult is to stop hiring. A hiring freeze is the quickest way to cut down the payroll.

Secondly, if companies have to let people go, I am afraid that redundancy is cheaper when it comes to younger people, so they sometimes deploy a LIFO rule —last in, first out. There is then the secondary effect that the more experienced workers can fill the vacancies. On top of that, we have the situation at the moment whereby sectors that disproportionately employ young people—in shops, restaurants, hotels and throughout retail, hospitality and leisure—have been particularly hard hit by the national insurance and business rates hikes.

I said that youth unemployment usually tends to rise faster and be higher than overall unemployment. That is true, but historically it is not as true in this country as it is in the rest of Europe. There are exceptions—in Germany and the Netherlands, for example—but it is the case in southern Europe. After the crash under the previous Labour Government in 2007-08, there was talk of a lost generation in southern Europe as youth unemployment rates soared so high.

Why should the situation in those countries be different from the situation in countries like ours? There is a fancy economics term for it: insider-outsider theory. That theory basically says that when there are economic troubles in a system that has very heavily regulated labour markets, very high levels of employment protection and the very heavy involvement of trade unions, all the help tends to go to the people in work, and it is those trying to get into work—the outsiders—who suffer as a result. Historically, our country has had more liberalised—although not totally liberalised—labour markets, which has meant that we have not had those problems with youth unemployment to the same extent as some of our near neighbours in Europe, and we have tended to recover more quickly when they do occur.

Right now, we have the historical rarity—I am not sure it is unique, but it is certainly a rarity—that the ratio of youth unemployment to total unemployment in the UK is higher than it is in the EU. That is before we feel all the effects of the Employment Rights Act 2025; I am sure that some effects were there already, but we have yet to feel the full effect. That Act will discourage taking on new workers, especially new untested workers, and that is of course what youth unemployment is.

Let me talk about one aspect of the 2025 Act: zero-hours contracts. These contracts have a special place in Labour mythology, which comes from the time when the last leader of the party, the right hon. Member for Islington North (Jeremy Corbyn), used to bring them up every week at Prime Minister’s questions, saying that they were an epidemic, ripping apart our country. At the time, the Conservatives researched how big a deal zero-hours contracts were, and it turned out that fewer than 3% of workers had a zero-hours contract for their main job. There were others who had one for a second job, including many working as bank staff in the NHS. There were also lots of students on them. It turned out that the average number of hours on a zero-hours contract was 25, and—here’s the bit that nobody could accept—the average job satisfaction of people on a zero-hours contract was higher than it was for workers overall.

Those on the Government Benches have been grimacing a little, but I do not know how many of them know that the proportion of people on zero-hours contracts has gone up since the general election of 2024. They are just a part of our economy. They are also heavily skewed towards young people, such as students working in sectors like hospitality and other seasonal occupations. About 40% of people with a zero-hours contract job are under 25.

I myself was once a young person with a zero-hours contract—I just did not know it was called that. If colleagues across the House think back to their first job, perhaps washing up in a restaurant or working shifts in a shop, they probably did not know at the start if they would be working exactly the same number of hours every week and so on; it turns out that a lot of us probably had our first opportunity in the world of work through a zero-hours contract. It will be true for people even after the Employment Rights Act—those with such a contract will have some extra guarantees included in nit. However, it will also be a bigger deal, from an employer’s point of view, and it will add some risk to taking on young people. What will be the balance for employers and employees? It is, for Ministers, a leap of faith.

[Andrew Pakes]

I appreciate the right hon. Gentleman’s knowledge and his passion for this subject. I would just suggest that he perhaps underestimates the impact that insecure work can have. In one of my brother’s last jobs, he had to get in the car and start driving to work each morning before he would get a phone call telling him whether or not he had a shift that day. Does the right hon. Gentleman not think it is reasonable that people like my brother should know their shift a day in advance? That is the issue we are really talking about with insecure work. I understand that he is making a political point, but we are talking about real people’s lives.

[Damian Hinds]

I am not making a political point. I think it is right and reasonable to give employees visibility, and all good employers who want to keep their employees will of course do the right thing and try to do so. The Employment Rights Act, however, does an awful lot more than just let people know some time in advance about the hours of their next shift.

The effects we see from the Employment Rights Act, taxation changes and other measures will not be mass lay-offs; it will be people—young people—not being taken on in the first place. Why does that matter? The Minister said it herself: it matters because of the scarring effect of youth unemployment. We know from studies that if someone is out of work in their early 20s, they can still be suffering the effects 20 or 30 years later.

There are things the Government could do to mitigate some of what is happening, including on the regulations coming out of the Employment Rights Act. However, I just wonder why they are doing it overall. I think it is because, in a world where there have been enough U-turns from this Government—actually, I do not think there have been enough yet, but there have been a lot—that legislation is something that Labour MPs can bring home and say, “This is a proper left-wing policy that we have enacted.” But do they really want to bring home higher levels of youth unemployment in their constituencies? That is what will happen.

The Government have introduced a number of schemes to try to mitigate what is going on, some of which are welcome. All Governments introduce somewhat similar schemes. However, the 55,000 people who will be eligible for the jobs guarantee should be seen in the context of the more than 900,000 young people who are not in education, employment or training. The scheme is limited in the areas it covers and, I think, people are eligible only after they have been searching for a job for 18 months or more, which would obviously count out many young people.

I welcome Connect to Work, which was mentioned by the hon. Member for Dartford (Jim Dickson), although I do not think it is meant particularly for young people; it might nevertheless be helpful for people who have been off on long-term sick. I thought the timings sounded ambitious when the Government first announced it, though, so I would welcome the Minister telling us what they expect the numbers to be at the end of this financial year, including in my county of Hampshire.

I know that I have already spoken for 10 minutes, Madam Deputy Speaker, but I just want to set the record straight on apprenticeships, which have come up a number of times. I hope I can help the House with a non-partisan description of what has happened in relation to apprenticeships over the past 20 or more years. The truth is that under the previous Labour Government, and under the first few years of the coalition Government, many tens of thousands of young people were doing an apprenticeship without even knowing they were doing so, so thin and flimsy were those apprenticeships. [Interruption.] The hon. Member for Bermondsey and Old Southwark (Neil Coyle) may screw up his face, but that is true; the research evidence is available.

The previous Government therefore reformed apprenticeships to be a minimum of one year, with a minimum of 20% time off the job, end-point assessments and qualifications designed by employers themselves, overseen by an independent Institute for Apprenticeships. Yes, when we did that, the number of apprenticeships went down, and the numbers that the Minister was quoting were all from after that change. Making the specifications of a qualification considerably more exacting will of course have an effect on the numbers. But guess what the new Government are doing? The minimum length for an apprenticeship will now be eight months. Try telling a German captain of industry that it is possible to do an apprenticeship in eight months. Will the numbers go up? Of course they will!

I recently met hairdressers in my constituency and was reminded of how all this comes together. Hairdressers, like hospitality businesses and others, bring people into our town centres. They are more than just employers, and their businesses cannot just move online. They are now facing seriously higher employment costs, including national insurance contributions and, in many cases, much higher business rates, and that is before we get to the looming impact of the employment regulations. Hairdressers also have a very strong tradition of taking on large numbers of young people and apprenticeships. My worry is that, with the increase in costs, it will be simply unaffordable for them to take on young people in nearly the same numbers. The same is true for pubs and many other employers.

We are seeing the early effects of Government policy in today’s youth unemployment numbers, and I take no pleasure whatsoever in saying this, but I am afraid that they are going to get materially worse. I ask the Government to take that seriously and to act, not by delivering some short-term programmes but by rethinking their approach in order to make it easier and less costly for companies to take on young people so that they can start their careers and build their futures.

17:16

[Andrew Lewin (Welwyn Hatfield) (Lab)]

I am pleased to have an opportunity to talk about young people, how we invest in their future, extend opportunities and do all in our power to leave nobody behind, but in order to have a serious debate about the prospects of young people in work, we need to look back at the unique set of circumstances that people in their late teens and early 20s have faced growing up. They are the first generation to grow up in Brexit Britain. They had no say in the decision to leave and to devastate the trading relationship with our single largest trading partner. Their opportunities to work, study and travel in the EU were taken away by the Conservative party at great cost to them and to the economy.

This is a cohort of young people who were teenagers during the pandemic, patiently abiding by lockdown to protect their families, but with months, if not years, outside of the classroom. To be clear, I supported the public health measures, but the chaotic way that school closures were overseen was indefensible. The most fateful days were 4 and 5 January 2021. On 4 January, these young people were marched back into school, and on 5 January, they were sent home again—here today and gone tomorrow, much like the Conservative MPs that we have seen defecting to Reform.

Brexit, the chaotic Conservative management of the pandemic and Liz Truss blowing up the economy: that was the legacy left for young people by the previous Government. This Government are resolved to turning that around, and we understand that good prospects for young people must start with a strong economic foundation.

Since Labour came to office, the Bank of England has made the decision to cut interest rates six times. GDP growth last year was ahead of forecasts, and there are 500,000 more people in the labour market today than there were in July 2024. There are good reasons to be positive about the economy in 2026, but I absolutely recognise that we cannot be complacent. I know how difficult it can be for young people. Yes, that is because of the Conservative inheritance, but it is also because of the structural changes we are seeing: there can be intense competition for entry-level jobs; there is anxiety about the impact of artificial intelligence; and there are still too many people in insecure work.

If a strong economy is the first pillar of success, the second is to have a Government who are willing to intervene to help young people. This comes through investment in skills, access to training and, where needed, support so that young people can be placed in their first role. It is vital to invest in further education and higher education. In the community I represent, I am proud that Welwyn Garden City is home to Oaklands college and that Hatfield is home to the University of Hertfordshire. Our ambition should be for at least two thirds of young people to go to college, start an apprenticeship or attend university, and across Welwyn Hatfield I believe that that number could be higher still.

The vast majority of young people still move quickly into work after education, but the jobs guarantee is a serious intervention to provide some people with the additional support that they need. The offer from the Government is clear: if a person is aged 18 to 21, is in receipt of universal credit and has been searching for work for 18 months or more, they will be offered paid employment for six months. The full scheme will cost the Government £820 million, but this is an active choice we are making to invest in young people, and it is a down payment on their future success.

It is also right that we passed the Employment Rights Act 2025. Thanks to the actions of this Labour Government, this generation of young people will no longer have to endure exploitative zero-hours contracts and will have the right to guaranteed shifts. They will also have day one rights to paternity leave, and no longer will people be excluded from statutory sick pay because their pay is too low.

The last Conservative Government were not prepared to intervene to support young people. The Conservatives and their friends in Reform voted against stronger rights at work for young people, and the Liberal Democrats bravely abstained. Only Labour understands that for young people to succeed we need a strong economy, continued investment in education and a willingness to intervene when the market alone does not provide the right opportunities. Young people backed Labour at the last election, and with the Employment Rights Act, the jobs guarantee and a rise in the living wage, we are backing them to succeed in the economy that we are turning around.

17:21

[Joy Morrissey (Beaconsfield) (Con)]

I appreciate that all Members across the House care about youth unemployment, but the way it is tackled is very different depending on from which party a Member hails.

We have rising youth unemployment, and the issue is taxation. Our businesses are facing an increased national insurance rate, and business rates on the high street are high. Hospitality and retail businesses are being taxed to the point where they cannot take on another employee, and usually that employee is a young person who is being given their first opportunity. The Government are making the job market so rigid and protecting workers’ rights to the point where there will be no jobs available by the time young people are looking to get into employment. The Government are making it so restrictive that businesses do not want to take on new employees. First, they are not able to afford to and, secondly, there is so much restriction when they go to hire a new employee that they just will not do it. That will not be dealt with, and youth unemployment will continue to rise.

I have had a young person come to me who has just finished a degree in mathematics from Cambridge but cannot find a job. Someone else’s son did a law degree but cannot find a job. I have people from every sector coming to me with their concerns: businesses are saying that they cannot take on a new employee because they simply cannot afford it, and parents are desperate to get their child into any job.

As my right hon. Friend the Member for East Hampshire (Damian Hinds) said, apprenticeships and zero-hours contracts were an opportunity for a young person to get their first job, for example in hospitality or retail. Working in those environments, with other people, teaches young people lessons that they can take forward in life to other jobs and opportunities. That is what young people need.

I would like to provide some historical context to the Minister’s speech. In 2010, the Conservatives inherited from Labour youth unemployment at 20%, and nearly a million young people were out of work. Before the pandemic hit in 2020, the Conservatives had nearly halved it to just 12%. When we left office in 2024, despite the pandemic’s effects, the level was just 13%. That was the result of our fixing the economy, driving up education standards and making work pay.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I am really impressed by how the hon. Lady is representing her constituents and businesses. I loved her summary of recent youth unemployment levels, but the reality is that when we came into power in 2024 youth unemployment was rising. We cannot blame the problems we are facing now on the current Government. One could argue that we are not making it better and that we could do more, but youth unemployment was rising at the time that we came into power and had been for many years.

[Joy Morrissey]

That intervention leads me to the statistics that we have today. Nearly 16% of young people—that is 729,000—are out of work. That figure is a staggering 103,000 higher than a year ago, and a further 2.88 million young people are economically inactive. Just to point out: that is more than when Labour took over from us. That is statistically accurate.

[Dr Arthur]

I accept that youth unemployment is higher now than when we took office. I regret that and it is great to see that the Government are doing more on it. The point I was making was that when we took office, youth unemployment was rising and it was rising fast. It has continued to rise, but it was rising then. That is my point.

[Joy Morrissey]

This is a youth unemployment crisis of Labour’s own making. It is because of the national insurance tax hikes and the restrictions on business—

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Will the hon. Lady give way?

[Joy Morrissey]

I will make some progress. The crisis will continue to be a problem that this Government face—mark my words.

Turning to my constituency of Beaconsfield, Marlow and the South Bucks villages, we have an incredible restaurant in Beaconsfield called The Greyhound. I strongly urge everyone to go to eat there. It has a wonderful apprenticeship programme that helps young people get their first job in hospitality, providing them with an incredible opportunity. I went to speak to them and they said, “This is great. I wasn’t enjoying school and I now have an opportunity for a career in hospitality. I am trained in every level of hospitality.” They gave me a tour of the wine cellar and everything in between. They love it and are passionate about it.

The Greyhound tells me, however, that many businesses, and not just The Greyhound, cannot continue their apprenticeship programme because of the backdrop of the national insurance tax raid and an eye-watering hike in their business rates. They simply cannot continue the very successful programme that has changed young people’s lives.

This is a Government who failed to listen to the urgent calls of businesses to stop their Employment Rights Act, which will destroy jobs while creating rights for jobs that will no longer exist. Young people need businesses to be able to create jobs for them and not be hamstrung by tax and employment policies that force employers to curtail opportunity. This is also a Government who sow utter chaos in our apprenticeship system at every turn.

With Labour Governments, rising youth unemployment —indeed, all unemployment—becomes a sad inevitability. Yet different choices can change that course for our young people and create a better future. Lowering business taxes to enable businesses to create jobs will help tackle the problem, as will putting evidence before ideology in education so that standards rise and do not collapse, and scrapping business rates on the high street. We will see many people coming back, many businesses coming back and many young people being employed. It will be a tremendous win for this Government if they try that.

The Government should also try reducing the tax burden for anybody under the age of 25. If they scrap the national insurance contribution for under-25s, this Government will see a tremendous rise in young people taking their first job with a business, because the risk is reduced for that business. Instead, we are forcing over-regulation on to businesses, crippling and closing them, and curtailing opportunities for young people. We should create an apprenticeship system built on aspiration that is about employment choice and stability, so that we continue to build on the great work that had already started and give young people an opportunity to get their first job and start their career. That is the future our young people deserve.

13:39

[Naushabah Khan (Gillingham and Rainham) (Lab)]

This debate lays bare the sheer hypocrisy of the Conservative party. Although I certainly do not welcome the numbers we are seeing on youth unemployment and recognise the challenge, this is not an issue that was created today. It was overseen by 14 years of their Government, as young people were steadily pushed into the margins. After leaving nearly a million young people not in education, employment or training on their watch, it is convenient for them to come to the House to point fingers at those who are tasked with fixing the damage they caused.

[Graham Stuart]

Will the hon. Lady give way?

[Naushabah Khan]

No, I will continue.

Let us not forget the damage that the Conservatives caused by cutting youth services by 70% in real terms since 2010. A Government who presided over the rise in NEET numbers year after year cannot claim surprise at the consequences of hollowing out the skills system that once gave young people a route into meaningful work while more and more young people are falling out of the labour market due to ill health. The Leader of the Opposition said in a speech today, when referring to the hon. Member for Clacton (Nigel Farage), that Britain needed an engineer, not a used car salesman. That is quite funny, because 14 years of Conservative government have left a generation of young people who might not have the opportunity to be either.

When the last Labour Government left office, they left a strong foundation of support for young people: a national careers guidance service, robust apprenticeships and a clear vocational pathway. Fourteen years later, those foundations lie in ruins. Connexions advisers are gone, opportunities for training have been slashed and, as I have said, nearly a million young people were left economically inactive.

[Joe Robertson]

Will the hon. Lady give way?

[Naushabah Khan]

I will not give way at this point.

We are now left to rebuild what should never have been dismantled. It is promising to see that that is exactly what this Labour Government are doing. I welcome our youth guarantee that will create 350,000 new training and workplace opportunities, supported by 360 youth hubs across the country, and the investment of £750 million in apprenticeships that will equip 50,000 more young people with skills for the future.

We also recognise that the traditional path that allowed me to succeed—going to university—is not necessarily the right path for everyone. With a growing skills shortage, particularly in sectors such as house building that we need for building the infrastructure of the future, it is vital that we go further in encouraging young people to use their talents and feel confident that such career paths are valued and given the respect they deserve. I have made many visits to MidKent College—which serves my constituency—where young people are learning trades and are really passionate about what they do. They have skills in bricklaying, carpentry, welding, hairdressing and woodwork. Those are skills that my university degree could never have given me, and we must ensure that these avenues are fully supported so that young people can contribute meaningfully to our country’s future.

[Wendy Chamberlain]

The hon. Member is talking about further and vocational education, which is important. Another aspect of it is that it helps young people for whom school has not been a success. It is not just about the skills that they learn; it is about that arm that is put around them. Does she share my concern at the rural agricultural college in Cupar in my constituency of North East Fife effectively mothballing its building and moving a number of its courses online, meaning that young people studying animal care for, for example, are missing out on those arm-supporting opportunities that they desperately need?

[Naushabah Khan]

I completely agree that those routes offer young people an alternative. They offer them a space where they have an opportunity to thrive in a way they might not have been able to thrive in a traditional academic setting. I recognise the need for us to ensure that all those opportunities are protected in whichever way possible, and I recognise the work that the hon. Member is doing in her constituency to promote that.

I know that many of my young constituents in Gillingham and Rainham will welcome this Government’s approach. Jack, a 19-year-old constituent of mine, wrote to me to say:

“I am trying hard to build a future for myself, but without anyone giving me a chance it feels impossible to get started. I want to work, to contribute and become independent, but at the moment, I feel stuck and unsupported.”

My heart broke when I read that. I know that we have a lot of work to do as a Government to get this right, but Conservative Members should recognise their part in creating a legacy that has left thousands of young people living with despair or hopelessness.

We cannot have a generation stuck in limbo, truly struggling not because of their lack of talent or drive, but because the system has been deliberately dismantled. When I was 19, and living a few streets away from where Jack lives today, my future did not feel to me as his does to him. We must recreate a sense of hope and opportunity in this country. I am glad that, through my office and the actions of this Government, we may be able to give Jack the help that he needs, but is a moral stain on our country that we have allowed young people to reach the point of putting those words to paper because that feels like a reality to them. I hope that we get to the heart of this issue. I will back the Government in what they are doing to tackle youth unemployment as a matter of urgency.

17:35

[Bradley Thomas (Bromsgrove) (Con)]

The facts speak for themselves: the unemployment rate for those aged between 16 and 24 is 15.9%—that represents 700,000 people —and 946,000 young people aged between 16 and 24 are categorised as NEET. There has been an 11% drop in the number of job adverts in the 12 months between July 2024 and July 2025. Under this Labour Government, there has been a staggering 14.6% increase in the unemployment rate of those aged 16 to 17.

When I go out and about in my constituency and talk to businesses—particularly small businesses in retail, hospitality and leisure, which are for many the first rung on the employment ladder—they make it known loud and clear that the Government’s tax rises, and rising energy costs and bureaucracy, are eroding not just their margins but their confidence. That is perhaps the most corrosive effect of all. Once those businesses are gone, the opportunities for young people to get on the first rung of the employment ladder are reduced.

In listening to comments by Members from across the Chamber, I have been struck by what I consider to be the fundamental ideological difference between the two sides of the House—between my party and the Government—on the question of where wealth is created. Governments do not create wealth. They can play a role in catalysing the foundations of our prosperity, and it is right that they lean into that and create schemes where necessary, but at the core of this issue is the fact that empowering individuals and small businesses to take risks is what enables the economy to prosper. We see that time and again. It is noble that the Government want to intervene to support businesses in creating jobs, and to create routes for young people to develop their skills and enter the jobs of the future, but we are just not seeing enough hard action that acknowledges the reality of where wealth is generated.

[Joe Robertson]

My hon. Friend talks about the differences between those on the two sides of the Chamber. As we have heard today, most of the Government’s answers are: “We have a Government programme for that.” Does he think that most young people would prefer a re-branded Government programme or a job?

[Bradley Thomas]

The best welfare programme of all is a job; nothing else comes close, in terms of the earnings that people receive as recognition of and reward for their contribution, and the effect on their self-confidence.

During this debate, we have not heard much, if anything, about incentives for people to take risks. Ultimately, every single business that employs people, whatever their ages, has been created by someone who has taken a risk because they have been empowered to put something on the line, be it capital or time. Every business, large or small, was started off by somebody taking a risk. Our economy is becoming increasingly risk-averse, and that is exacerbated by the pressure placed on businesses across the board, whether from rising employment costs, energy costs or bureaucracy.

Many organisations that are experts in this field directly critique the Government’s policies. The Centre for Social Justice, the Institute of Directors, the British Chambers of Commerce and UK Hospitality all say that the choices made by the Government are having a detrimental and corrosive effect on the employment prospects of society as a whole, but particularly of young people.

I urge the Government to focus less on work programmes, and to instead speak directly with those who take risks to employ people of all ages. The Government need to be less burdensome, to get off the backs of those who take risks, and to instead support them. When the Prime Minister gave his very first speech at 10 Downing Street following the election, he said that the Government would tread much more lightly on people’s lives. They are doing the opposite, and that needs to change.

11:30

[Chris Vince (Harlow) (Lab/Co-op)]

It is a pleasure to speak in the debate. I thank the Minister and the shadow Minister for opening the debate on this important issue. It is hugely important that hon. Members have the opportunity to speak on this subject. The hon. Member for Bromsgrove (Bradley Thomas) suggested that Labour Members were risk averse, but I am going to take a risk: I will attempt to make a speech in which I will not make any political points. If I do at any time make a political point, I will allow the right hon. Member for Beverley and Holderness (Graham Stuart) to intervene. I think that is very fair.

I start by taking the House back to lockdown in March 2020. I made the decision to leave my job as a teacher; I will not go into why, because I do not want to make any political points. I went to see my headteacher and said, “I want to resign,” but he convinced me to stay until September, the start of the next academic year, so I handed in my notice on 22 March 2020. If hon. Members know anything about recent history, they will know that resigning on 22 March 2020 was quite a gamble, because the following day the country changed and we went into lockdown. I found myself working from home, giving online lessons and that sort of thing, and thinking to myself, “Now I’ve got to find a new job during lockdown.” I was not worried about it April, May or June, but when we got to August, I started to think, “Oh my gosh, in a couple of weeks’ time I will be unemployed.”

I will not pretend that I was particularly young in March 2020—I am not trying to claim that I am a young person—but I wanted to tell that story because for me, the idea of being unemployed was terrifying. I recognised the huge impact that being unemployed, for any length of time, would have on my mental health. Members across the House will agree that for people who suffer from mental health issues, which we recognise affect people to different degrees, work can be the solution, because it can provide an opportunity to give back to society and provide self-worth, which is really important.

Most of my contribution will be about the work of Harlow college. I was about to make a political comment, but I stopped myself. I came to this House not to be negative, or to talk down the country, but to talk up Harlow. Over the past year, the number of young people in Harlow not in education, employment or training has gone down, mainly because of the work being done by Harlow college. I pay tribute to the college’s principal, Karen Spencer, who has written a few points for me—it is not too long, and certainly not as long as what my mother would write, so hon. Members should not worry—about the work of Harlow college, and schools in my constituency, to get the NEET rate down in Harlow. I thank the college and those schools for their work.

Karen Spencer writes:

“Harlow college has developed a targeted NEET programme that recognises the complex barriers many young people face. Through flexible entry routes, small group provision and strong pastoral support, learners are helped to rebuild confidence, re-engage with education and progress into further study or employment. Importantly, these students are fully integrated into college life, including English and maths, enrichment activities and digital support. Harlow College also recognises that preventing young people from becoming NEET must begin earlier.”

That is a really important point that we can all understand. I know young people in Harlow who have been out of employment for a number of years, and whose parents have perhaps been out of work for a number of years, and we have to change that culture. She goes on:

“The college works closely with local schools, including Passmores Co-operative Learning Community.”

It is a community co-operative—“co-operative” is, technically, a political term, but it is in the title of the multi-academy trust.

I pay tribute to Vic Goddard, the executive head of Passmores Co-operative Learning Community, for his work with the college, because this must work both ways. Karen says that Harlow college works

“with college staff going directly into schools to discuss careers, support applications and help prepare young people for interviews. This early, collaborative approach reduces the risk of young people falling through the gaps at key transition points and demonstrates the vital role that further education colleges play in tackling NEETs and supporting social mobility.”

The right hon. Member for Beverley and Holderness has not intervened on me, so I do not think I have made any political points.

Let me finish by saying that I am absolutely determined for young people in my constituency to have the best opportunity moving forward. I am delighted that this Labour Government are investing in my town, and that the UK Health Security Agency will have its permanent home in Harlow. That will mean high-tech, high-skilled jobs for young people in Harlow.

17:44

[Shivani Raja (Leicester East) (Con)]

Every young person I speak to in Leicester wants the same basic things: to work, to earn, to learn and to build a future for themselves. They want the dignity that comes from that first pay packet, the confidence that comes from responsibility, and the chance to prove themselves in the workplace. They do not want to sit on the sidelines of our economy and—let us be honest—we do not want that for them, either.

I hear constantly about the Government’s ambition—their ambition for more people to be in employment, the ambition for this and that—but ambition does not create jobs. It is not just the Government who have ambition; young people have ambition. They have the ambition to succeed, to buy a house with their wages, and to raise a family. Ambition is not lacking among our young people, but ambition does not create jobs. Jobs exist only when employers can afford to take on people, or to take a risk on expanding or on starting a business, and right now, this Government’s policies are making that harder, not easier.

What young people lack are opportunities. Entry-level jobs are disappearing, not because young people are unwilling to take them, but because businesses are increasingly unable to afford the risk of hiring them. This Government repeatedly underestimate how employers respond to rising costs. I know that those on the Government Front Bench and a large section of Government Members have never worked in the private sector and will not understand the risks of starting a business or working in the private sector. I know that they have never had to meet a payroll date, or had sleepless nights thinking about whether there is enough cash for them to take any salary at all, or about whether taking on another member of staff will cripple them.

I come from the private sector, and I understand businesses—my family runs its own businesses—so let me help Government Members to understand. Higher employer national insurance, rising business rates and increased regulatory risk all feed into the same calculation. When margins are tight, businesses do not take chances; they prioritise experience over potential. That is rational behaviour, but it locks young people out of the labour market.

As we have heard, youth unemployment stands at 15.9%, and nearly 1 million young people are not in education, employment or training. That is not because young people have stopped trying; it is because the number of entry-level opportunities available to them is shrinking. Retail, hospitality and leisure are where many young people learn how to work. They learn reliability, communication and resilience. Those sectors operate on tight margins and employ a disproportionate number of young people, yet they are precisely the sectors being squeezed the hardest by this Government.

Business groups have been clear about this. Yesterday, we heard the Government announce further changes to business rates, including additional relief for pubs. Any support for struggling businesses is welcome, but temporary discounts, transitional reliefs and future reviews do not change the fundamental problem. Costs are rising faster than confidence, and uncertainty discourages hiring.

In my constituency, claimant counts already sit above the national average. The number of young people aged 18 to 24 claiming unemployment-related benefits has risen over the past year. That is hardly surprising, given that businesses tell me that they are scaling back entry-level recruitment in response to rising costs. The story I hear again and again is the same: employers want to grow, but they cannot justify the risk. When the door to work closes, young people do not suddenly stop wanting to contribute. Instead, they are pushed towards welfare—not because they choose dependency, but because opportunity has been taken away. That is how a benefits system becomes a waiting room, rather than a springboard. This matters, not just economically but socially. Without early work experience, young people struggle to progress; skills fade, confidence falls, and the distance between them and the labour market grows. That is how temporary unemployment becomes long-term disengagement.

This does not have to be the outcome—there is another way to get young people back into work. We Conservatives believe that the answer is not to manage decline through temporary reliefs and reviews, but to remove the barriers that stop businesses from hiring in the first place. If this Government are serious about tackling youth unemployment, they must stop focusing on managing the consequences of higher costs and start removing those barriers, which means backing small and medium-sized businesses, reducing the cost of employing people, and ensuring that our tax and regulatory system rewards job creation rather than punishing it. Young people want to work, they deserve the chance to work, and it is the responsibility of this House to ensure that Government policy opens the door to opportunity, rather than quietly closes it.

17:50

[Sean Woodcock (Banbury) (Lab)]

It is a real pleasure to speak in this important debate on a vital topic. There have been numerous fascinating contributions from Members across the House, which is why I was so astonished by the contribution from the Opposition Front Bencher, the hon. Member for Faversham and Mid Kent (Helen Whately)—she was patronising young people when she should have been apologising to them. Hundreds of thousands of young people fell out of employment, education and training on the Conservatives’ watch.

In Banbury, youth unemployment is lower than the national average. I do not think that will surprise anybody; given its Soho Farmhouse, celebrity farmers and the Chipping Norton set, it may be assumed that youth unemployment is not something we know. That would be wrong, though, because there are deep pockets of deprivation in places such as Grimsbury and Ruscote—both of which I served as a councillor for—but also in Chipping Norton itself. There are too many young people there who have been failed for far too long, and the result is that they do not do things. They do not learn to drive, they find it difficult to get a job, and they end up having shorter lives than people just down the road from them. In rural areas, too, things such as the decimation of buses that we saw under austerity have led to some kids being unable to go to college or get into town to go to a job, so the cycle continues.

The difficulties affecting our young people should anger us all and upset our British sense of fairness, because our young people have so much to offer. During the pandemic, in 2020 and 2021, young people were asked to make sacrifices that were not made by any previous generation. Freshers’ weeks at universities and colleges were done via Zoom, kickabouts with your mates down the park were not allowed, and nights on the town were banned. What did young people get in return? They were told by the Conservative party at the last general election, “Go and do national service.” This is a party that did not help young people to get into work or to stay in it, with youth unemployment growing by almost 50% between 2021 and 2024. Under the Conservatives, the UK was the only G7 country whose employment rate was lower after the pandemic than before it—if they want to talk about records, that is their record.

The Conservatives want to come to this Chamber and talk about what this Government are doing. They are the ones who closed youth centres; this Government are opening youth hubs. We are rolling out programmes to get people into work, in contrast to the Conservatives’ plan to cut support. This Government are overhauling jobcentres so that they support both people who are looking for work and businesses that are looking to recruit, and we are also getting buses back on the road. This Labour Government are providing a jobs guarantee; the Opposition are guaranteeing absolutely nothing, because they have learned absolutely nothing from the 14 years that they were in government.

17:53

[Sir Roger Gale (Herne Bay and Sandwich) (Con)]

I will be very brief, Madam Deputy Speaker. In her remarks earlier, the hon. Member for Gillingham and Rainham (Naushabah Khan), who is a Kent Member of Parliament, rightly praised the work of MidKent College and the training in construction trades that it is offering young people. I will add my praise for the work of the east Kent colleges, which is in a similar vein—they are also doing a tremendous job under quite difficult circumstances. However, there is little point in offering that training in skills, only to see disappointment at the end of it because the opportunities have gone. When a young man or young woman trains as an electrician, plumber or bricklayer, they expect to then go on to earn money in a job as an electrician, plumber or bricklayer. As my hon. Friend the shadow Secretary of State knows, people in the construction trades in east Kent are being laid off. House building is grinding to a halt, houses are not selling and the market is flat. That is all as a result of the Government’s fiscal policies.

In towns in my constituency such as Herne Bay, Sandwich, Birchington-on-Sea and Westgate-on-Sea, many of the jobs are hospitality-based. They are either directly in hospitality—pubs, restaurants and small hotels—or they are dependent upon the visitors that those businesses attract, such as the seaside amusement arcades and Dreamland in Margate. All these businesses are dependent on people having money to spend to be able to employ staff. Those staff are not being taken on, and those staff are the young people. I may be getting on a bit, but I can remember my first job washing up in a restaurant in Stratford-upon-Avon. I needed to earn some money, and I was able to walk in and do it, and that is not happening now. Businesses are laying off staff, rather than taking them on.

As my right hon. Friend the Member for East Hampshire (Damian Hinds) said earlier, it is young people who are not being employed. Why? It is a direct result of the fiscal policies of this Government. Directly or indirectly, it is national insurance, business rates, the cost of inputs and the cost of electricity. People cannot run a restaurant or a pub without heating and lighting or food to put on the table. There are pubs closing in my constituency. A couple of weeks ago, I heard of another. A lovely riverside pub, the Dog and Duck, in a place bizarrely known as Plucks Gutter, has shut. The young couple who were running it—they had a splendid summer season—found that business crashed at the end of the summer. They could not afford to pay the staff along with paying for the rates, the food, the electricity and everything else that goes with running a good little riverside pub, so it has gone. Please God, it will come back again, but that couple have had to retrench, and they put their heart and soul into it.

It is no good. We do not want a sticking plaster, and we do not want schemes. We do not want to be told, “Yes, you can do this and you can do that. There are these opportunities.” These young people—soon it will be my grandchildren—want jobs. They want the dignity of being able to go out, to do a hard day’s work, whether that is washing up in a café, picking fruit in an orchard or whatever, and to get a pay packet at the end of it that they have earned and can spend as they want. That is the dignity of employment, and that is what I fear this Government are denying them.

17:58

[Graham Stuart (Beverley and Holderness) (Con)]

It is a pleasure to take part in this debate. How do we, as so many colleagues have asked this afternoon—certainly on the Opposition Benches—persuade an employer? How do we create the incentives for an employer to take a chance on a young person who may have no work experience—they may be full of ambition, fresh ideas and curiosity, but with little or no experience to offer—when that same employer could choose an older candidate who is proven, reliable and familiar with the workplace? If we can answer that question, we will help more than one person; we will help ensure that we provide the door to opportunity for people to have that dignity of work, as my right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) has just talked about.

I have been a Member of Parliament for nearly 21 years, along with the Minister. In that time, she, like me, will have visited hundreds of schools—I certainly have, from Holderness academy to Withernsea high school—and asked thousands of students the same question: “What do you want to be when you leave school?” Not once has a child replied, “Unemployed”, and for good reason. Young people are ambitious. They want the dignity of work, about which my right hon. Friend spoke so passionately just now, over the indignity of welfare. They want to climb a ladder of opportunity, not fall into the trap of dependency. However, as was reflected in the Minister’s speech, study after study tells us the same hard truth. Young people who experience long-term unemployment are more likely to end up poor, sick and more isolated than their peers, with no options and no hope. No way should we be consigning our young people to that fate.

Labour Governments have done this before. I never want to question anyone’s honesty, but some Labour Members have been very selective in the data that they have given. They have talked relentlessly about the 14 years, but not one of them has given youth unemployment figures for those 14 years, which anyone fair-minded would surely do rather than picking some three-year period around covid. The hon. Member for Edinburgh South West (Dr Arthur) did make a fair statistical point. He said, “OK, youth unemployment has gone up under Labour.” He conceded that: how refreshing. However, he also said that it was going up when we came to power and we should deal with that. It was a fair point and a point well made, but in 1997 youth unemployment stood at 14%, and by 2010, under the socialists—the Labour party—it had climbed to 20%.

[Dr Arthur]

Will the hon. Gentleman give way?

[Graham Stuart]

I will make a little more progress, and then I will happily give way. Given that I have referred to the hon. Gentleman, it is the very least I can do.

By 2024, the level had been brought back to below 14%. Again and again, Conservatives have brought youth unemployment down. I have mentioned—as have others, including the Minister—just how damaging it is for young people to be unemployed. It has not just a short-term horrific impact, but a lifelong impact. I do not quite know why that is the case, but study after study shows that it is. Now, less than two years in, the figure is 16% and rising. We have seen this film before, and unless we change course—unless the Government change course—we know how it ends. So how do we change course? I think that Conservative Members have tried to indicate to Opposition Members what the answer might be. I know that Opposition Members lack experience of running businesses—so few of them have ever had to make that huge decision, that risk-filled decision, to employ someone and then to employ more people, having to find the money to pay them at the end of the month as well as paying all the taxes—but the answer is that we do it by changing incentives.

As any good economist knows, the single biggest cost for almost any business is its workforce, yet this Chancellor has chosen to increase the minimum wage and so many other costs on business. In turn, the cost of employing 18 to 20 year-olds—just since July 2024—has risen not by £2,000, not by £3,000, but by a staggering £4,095, in less than two years. If we understand that behaviour is driven by incentives and we make it much more expensive to employ a young person than to employ someone older, what happens?

Well, it is not a surprise: the rate of youth unemployment has gone up. Let me now give way to the hon. Gentleman.

[Dr Arthur]

I thank the right hon. Gentleman for giving way, and I thank him for reflecting on a longer period than just the last few years. However, if he has been in this place for 21 years he will remember that the level of youth unemployment in 2010, a year to which he referred, was not because we had a socialist Government—although I am a big fan of Gordon Brown—but because we had a global financial crisis. Unemployment was high in the UK, but it was high elsewhere as well. The right hon. Gentleman will also remember that part of his Government’s response to that was austerity. Does he want to reflect on the impact of that on our young people?

[Graham Stuart]

The hon. Gentleman makes a fair and reasonable point, but if he goes back and looks through the data, he will see that youth unemployment stayed stubbornly high under the last quasi-socialist Government, and it was not just because of the 2008 crash. The truth is that, throughout that period, we had a much higher level of youth unemployment than we should have done. He says that we had austerity, but the then Government overspent. We inherited a massive deficit and slowly brought it down throughout the 2010s, but we overspent in each and every year, so the idea that we had austerity is a myth. “Austerity” means living within our means, but we did not live within our means. We overspent each and every year, but by the time we got to covid, we had managed to get our deficit right down. We showed fiscal responsibility, because we know that if Governments spend money that they do not generate, they impose a burden on the very young people on whom unemployment is now being imposed.

I will deal with the minimum wage, which Labour Members have touched on. They asked whether we want to tell young people that they are not worth higher pay. Well, if they do not have the experience, and if they lose out on getting a job against an older person because they do not even have cost competitiveness, they are in trouble. Since the introduction of the development rate in 1998, there has been a lower wage for younger workers. That is deliberate, for a very sensible reason: when young people enter the workplace, they are doing exactly that—they are developing. They are developing skills, confidence, discipline and the ability to work productively alongside more experienced colleagues. Employers were explicitly permitted to pay less in order to reflect an economic reality.

[Jayne Kirkham]

rose—

[Graham Stuart]

I do not doubt the good intentions of the Labour party, the Cabinet and the hon. Member for Truro and Falmouth (Jayne Kirkham), who I may allow to intervene in a moment, but good intentions do not disguise the truth. They have not run businesses, and it shows. They do not understand how employers make decisions or how behaviour is incentivised. By abolishing the development rate, the Chancellor wanted to signal that she is on the side of young people in order to put in place a political divide: “You Tories don’t want to pay young people a fair and decent wage!” Of course we do, but we want them to have jobs. This is the insider-outsider issue that my right hon. Friend the Member for East Hampshire (Damian Hinds) touched on earlier.

The effect that the Chancellor has had is the opposite of what she desired, and she is not helping young people. Many have received a short-term pay rise, but hundreds of thousands have received the ultimate kick in the teeth. They have received not a pay cut, but no pay at all, because the jobs they should have been offered have disappeared in a puff of the Chancellor’s smoke.

After the Government’s first Budget, a survey by the Beverley and District chamber of trade found that 88% of its members said they would be less likely to employ young people because of the rise in the minimum wage. Despite that warning, the Chancellor returned with a second Budget and destroyed even more opportunities with another £26 billion tax raid. We can but pray that she is out the door before she completes her tax-taking trilogy. If the Chancellor changes nothing, we need to change the Chancellor.

What would the Conservatives do differently? We would start with a simple truth: jobs are created by employers—by not Ministers, schemes or programmes. Private employers are the ones who generate wealth. The ladder of opportunity is not built by ministerial good intentions; it is built by creating incentives for the behaviours we want. The behaviour we want from employers is for them to take a risk, and to feel that it is worth their while for their family to invest in and give an opportunity to a young person. But under this Government, the first rung of the ladder is being sawn off. Young people do not begin at the top; they begin with a Saturday job or a summer shift, and their first payslip. That is where confidence is built, habits are formed and futures are forged. When those jobs disappear, the ladder does not get longer; it just gets shorter and steeper.

A Conservative Government will abolish business rates for retail, hospitality and leisure—not 10% of them, but 100%. Those are the sectors in which so many young people take their first step. Cutting costs gives businesses the freedom to grow and hire, and we do not need a vast number of people to administer a scheme. When we simply lower the costs for employers, they get on with it. That will create real opportunities for young people to learn, earn and prove themselves.

Under Labour, businesses face another three years of higher and higher costs, heavier regulation and constant uncertainty, leaving young people blocked, frustrated and struggling to get a foothold in the job market. We will repeal Labour’s job-destroying Employment Rights Act, because we cannot regulate our way to prosperity. The Act introduced 28 major reforms—count them—placing significant new requirements on businesses. By the Government’s own estimate, it will lead to £5 billion in costs.

The planned changes to zero-hours contracts are perhaps the most damaging to young people, because employees will require guaranteed hours and compensation for cancelled shifts. I fully accept that these measures are well-intentioned, but they will reduce the flexibility that employers value, and that young people also value because they can balance their studies with gaining experience. Businesses will hire fewer young workers, leaving a generation without the chance to learn, earn and prove themselves.

[Jayne Kirkham]

rose—

[Graham Stuart]

I hope the hon. Lady will say now on the Floor of the House that if the youth unemployment rate continues to go up, as it did under previous Labour Governments, from the 14% inherited from the Conservatives to 20%—if that were to be the terrible outcome, with its scarring impact on young people—she would not seek to stand for the Labour party at the next election, because she would recognise that she had failed us.

[Jayne Kirkham]

As an ex-employment lawyer—in fact, I was an equity partner in a law firm that employed 50 people, so I do have some experience—I remember that when the minimum wage came in in 1998, the figure for over-21s was the same, but the Conservative party changed that, so that those under 25 were paid less, although people’s rent does not cost less when they are 24. There is still a differential for under-21s of £2 an hour, so how can the right hon. Member say that that differential is no longer there when it still exists?

[Graham Stuart]

The differential has been eroded, but the hon. Lady is quite right to mention that. What we are talking about is balance. None of us is talking about a total free-for-all for employers. We are looking at getting balance, and it looks as though that balance has gone wrong, as the hon. Lady must know. What have been the great external economic shocks over the last year and a half? There have not really been any. There is no reason, other than the policies of this Government, for this increase in youth unemployment, with the loss of nearly 100,000 jobs in hospitality. This is about getting the balance right, and this Government have not done so.

The Conservatives will align incentives, cut costs and free businesses to hire—to get the balance right—and in doing so, we will give them the freedom to give young people a chance to prove themselves, because Conservative Governments stand for work, not welfare, and for opportunity, not dependency.

18:11

[Lewis Cocking (Broxbourne) (Con)]

As we have heard, the number of young people not in education, employment or training is at its highest level for more than a decade. Astonishingly, the most recent figures show that 946,000 young people are in that position, which is almost one in every eight young people across the country. We can all agree that this situation is completely unsustainable and damaging to our society, but despite their promises, the Government’s actions have only made it harder for young people to find jobs. To the surprise of no one, apart from the Chancellor and her Back Benchers, increasing the cost of employment through the rise in national insurance has led to more unemployment. Last month saw the biggest monthly fall in the number of payroll employees since the pandemic, and the unemployment rate across the United Kingdom is 5.1%.

What is the Labour Government’s response? They just keep increasing benefits. Welfare spending will rise by £18 billion this year, and is on track to increase by another £73 billion over the next five years. The biggest driver of that increase is spending on working-age adults. The number of new claimants for the personal independence payment is 78% higher than pre-pandemic levels, and 110,000 graduates under the age of 30 now claim at least one benefit without being in work. Why would a young person today take on the risk of their idea and start a business, or put hours of effort into a job, when they see more and more of their peers getting by on Government handouts?

I come to this issue with the very simple belief that the best form of welfare is a well-paid job, and that must be our country’s guiding principle.

[Sir Desmond Swayne (New Forest West) (Con)]

Can I tempt my hon. Friend with another very simple belief, which is that unemployment is like any other commodity: the more one pays for it, the more one will have of it?

[Lewis Cocking]

My right hon. Friend makes an incredible point, and that is precisely what businesses tell me. As I have said, it comes as no surprise to any of my constituents or businesses in Broxbourne—it is a surprise only to the Chancellor and the Labour party—that if the Government tax jobs more, there will be fewer jobs. The Opposition have been making that point. I am always surprised when Labour MPs come out and say that they have spoken to businesses in their constituency and everything seems fine. They should speak to businesses that have a Conservative MP, because they would hear a completely different message.

More people in decent, sustainable employment and a life off benefits is better for our economy and our public finances. To show young people that there can be a better future, we must change the economic model to reward employment properly and change our education system so that young people are prepared for the world of work.

We should be more creative about what we are asking young people to learn at school. Countless employers in my constituency have told me that, when they hire school leavers, they lack important skills such as writing an email, speaking with customers over the phone, and understanding basic finance and the language of contracts. It is not that young people today cannot or will not develop those skills, nor is it the fault of our brilliant teachers; the curriculum simply is not geared to preparing young people for work in the modern world. We should be inviting local businesses, entrepreneurs and employers into schools more regularly so that they can share their knowledge and experience to encourage students to think about how they can get their ideas off the ground and what it takes to run a viable business.

When I asked about this issue before, I was told by a Government Minister from the Dispatch Box that it is the Government who create economic growth in this country. Let me say gently to the Government that it is not they, nor us as MPs, who create economic growth in this country; it is all our constituents across the United Kingdom who take a risk, put their ideas forward, create jobs and economic growth locally, and employ lots of people.

In school, students could learn about marketing, economics, maths and law, all without knowing that they are actually learning those skills and all without a textbook in sight. That sort of system would help our young people to navigate the crucial period after leaving school and make them more attractive to employers. I have seen fantastic work at the Broxbourne school, which teaches a business T-level in which students go out into the world of work and have an apprenticeship alongside learning in the classroom. That is what we need to gear our education system towards: preparing young people better for the world of work in the 21st century.

I went through my whole education in the United Kingdom under new Labour and Tony Blair, and I remember Tony Blair saying that he wanted half of all young people to go to university. University might be the right choice for some young people in this country, but it is not the right choice for everybody. When I was choosing what I would do after school, the word “apprenticeship” was not even in the school’s vocabulary. There was no offer of an apprenticeship. School leavers then either went to university or fell off the edge of a cliff and did nothing. That record, from when new Labour was in power, is not one that I would be proud of; I think Labour Members need to reflect on what they did last time they were in government, because it clearly did not work then and it is not going to work now.

[Jayne Kirkham]

The hon. Gentleman must be really pleased, then, about the Prime Minister’s new target of two thirds of young people being in either higher education or apprenticeships and training.

[Lewis Cocking]

Of course I am pleased about that target, but anyone can stand at the Dispatch Box, set a target and make it sound good. We want action on the ground. The Government have been in power for 18 months, and when I speak to my constituents, including young people, they say, “We don’t see action.” We need to move faster and further on this.

[Jayne Kirkham]

The hon. Gentleman must also be pleased to see the further education White Paper, which will put some of those things into action.

[Lewis Cocking]

I would gently say to the hon. Lady that her party colleagues had 13 years to come up with a plan for government when they were in opposition. That paper should have landed the day after the general election; that is when the Government should have been getting on with it, not 18 months down the line. My message to the Government is clear: yes, make the obvious tax changes that businesses from all our constituencies are crying out for, but also show that you are serious about creating economic growth, tackling youth unemployment and bringing forward fundamental changes to education.

18:19

[Mr Peter Bedford (Mid Leicestershire) (Con)]

I turn 40 next week. I hope that does not render me too old to highlight the realities faced by some of our young people. They feel let down and some even speak of intergenerational unfairness. The facts are stark: youth unemployment is rising, home ownership feels out of reach, NEET levels are at unprecedented highs, and youth savings are almost non-existent. By any serious measure, being a young person in Britain today is getting harder and harder.

It is therefore no surprise that since the general election, support for the Labour party among 18 to 24-year-olds has halved. The Government simply do not understand aspiration, personal freedom or opportunity, and young people in Mid Leicestershire and across the country are increasingly starting to realise that. On the Conservative Benches, we understand that promoting aspiration, freedom and opportunity is the best path out of poverty and to improving social mobility—and, indeed, getting on in life. Put simply, we must help our young people to help themselves.

It is a shocking indictment of this Government’s economic policies—the rise in national insurance, the burdensome regulations of the Employment Rights Act 2025, and the utter decimation of our hospitality sector—that youth unemployment now stands at above 700,000, with NEETs close to 1 million. Even our brightest graduates are struggling to find work. That is unsettling for young people and it is holding back their potential.

Hon. Members should not just take my word for it. Earlier this week, I hosted the Institute for Hospitality here in Parliament. Delegates told me that the sector has lost over 100,000 jobs, many of which are traditionally taken up by young people at the very start of their careers. So I ask the House: what message does that send to young people? We should be offering them opportunities, not giving them their P45s. This is a betrayal of the next generation. Young people do not want a life on handouts; they want a chance to stand on their own two feet.

Sadly, personal responsibility means very little to this Government. Surely, it is the Government’s duty to send a positive message to our young people that through hard work, determination and responsibility they can achieve economic freedom and success. They can own their own home, they can have that nice car and they can take those family holidays. They can build a life that they want through their own graft, which they and their family can be proud of. It is increasingly clear that it is only us on the Conservative Benches who understand that. We are on the side of hard-pressed taxpayers.

[Lewis Cocking]

My hon. Friend does not look a day over 30, so it cannot be his 40th birthday coming up.

Does my hon. Friend agree that we need to go further? Of course we need economic growth. We need to tax jobs less and let the people outside create that economic growth, but we also need to look at the education system so that we prepare young people better when they leave education for the world of work. That is what employers are crying out for.

[Mr Bedford]

I absolutely agree with my hon. Friend. Another campaign I have been articulating is on financial education. That is also key to unlocking opportunity for many of our young people.

Only us Conservatives believe in young people. We are on the side of hard-pressed taxpayers, we are on the side of small businesses, and now more than ever we are on the side of young people. I am a Conservative because I believe that economic freedom comes through hard work.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

18:23

[Dame Harriett Baldwin (West Worcestershire) (Con)]

This has been an excellent and engaging debate, in which I think everyone has recognised that this is an important issue to which we should be dedicating time. Indeed, it is a crisis, because youth unemployment is rising faster here in the UK than anywhere else in the G7.

We have had some fantastic contributions from those on the Conservative Benches. My right hon. Friend the Member for East Hampshire (Damian Hinds), a former employment Minister, spoke in an extremely well-informed way. He also incorporated some very practical things into a call to action. We had a passionate speech from my hon. Friend the Member for Beaconsfield (Joy Morrissey), who talked specifically about The Greyhound as an exemplary business in her constituency. My hon. Friend the Member for Bromsgrove (Bradley Thomas) made a very apposite comment: that the best welfare programme for young people is a job. In an outstanding speech, my hon. Friend the Member for Leicester East (Shivani Raja) shared her deep experience of working in a family business and the importance of those jobs in our retail and hospitality sector to teaching young people reliability, communication and resilience.

[Graham Stuart]

My hon. Friend is picking out remarkable contributions to this debate. Was she particularly struck by the hon. Member for North Norfolk (Steff Aquarone), who is not in his seat, saying that the Conservatives should apologise for not having any mention in their motion of transport to help young people get to work, when the much longer Liberal Democrat amendment, ironically, has no mention of transport either?

[Dame Harriett Baldwin]

My right hon. Friend makes an excellent point.

My right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) spoke extremely eloquently about the importance of the Dog and Duck in his constituency and about how terrible it is for the local community that it has closed because of all the extra costs. My right hon. Friend the Member for Beverley and Holderness (Graham Stuart) was absolutely on the mark about some of the statistics and the fact that we have seen this film before. We have learned about the importance of the ladder of opportunity that is built by good intentions. We need to create those jobs in the private sector; we cannot regulate our way to prosperity. My hon. Friend the Member for Broxbourne (Lewis Cocking), in a speech that was very practical and befits his background in both the private sector and local government, had some very sensible points to make.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

In the Minister’s speech, she seemed to be lauding jobs created by the Government. Does my hon. Friend agree that it is ridiculous to suggest that the Government should create jobs instead of business?

[Dame Harriett Baldwin]

My hon. Friend is spot on, because it is that foundation of private sector prosperity that will create the tax revenues that we can use to pay for excellent public services. A similar point was made by my hon. Friend the Member for Mid Leicestershire (Mr Bedford)—and I agree that the House is shocked to learn that he will be 40 next week. He illustrated the importance of business and of the private sector.

At times—I hope you will permit this, Madam Deputy Speaker—a quote from Mark Twain came to mind:

“lies, damned lies, and statistics.”

I cite it to summarise some of the contributions. I want to set out for the record some statistics. Youth unemployment is now at 15.9%. There has been a rise of 2.5% on this Government’s watch. As we have heard in a range of speeches, 729,000 young people are unemployed in this country. That is a scandalous 103,000 more than the previous year. That number does not even include those who were signed off as long-term sick. Indeed, nearly 1 million young people are not in education, employment or training, and that is up by 25,000 since this Government came to power. Many of them are university graduates. The Centre for Social Justice has warned that over 700,000 university graduates are now out of work and on benefits, and many are fleeing the country, looking for opportunity elsewhere. Last year there was net emigration of 59,000 people under the age of 24.

[Dr Johnson]

Will my hon. Friend comment on the proportion of benefits claimants who are under the age of 24? In Sleaford and North Hykeham, 25% of people on unemployment benefit are under the age of 24, which is clearly a very large amount.

[Dame Harriett Baldwin]

As we have seen so often in this debate, that is a tragedy. Every young person deserves the chance to move into the world of work. What we are seeing from those statistics is that this is not a blip, but a trend—and a trend that is moving in the wrong direction.

[Graham Stuart]

Does my hon. Friend look forward to the Minister’s reply, as I do? Youth unemployment has already gone up from 14% to 16%. Does she want to hear from the Minister at the Dispatch Box a commitment that this Government will reduce it back down, so that they can for once end their time in power—in 2029—however short-lived it may have been, with a lower rate of youth unemployment than they started with?

[Dame Harriett Baldwin]

I certainly hope that we will hear a plan of action to tackle this alarming crisis, and a less selective grouping of statistics than we heard from the Minister of State, Department for Work and Pensions, the right hon. Member for Kingston upon Hull North and Cottingham (Dame Diana Johnson) when she opened the debate.

This Government have made it more expensive, burdensome and risky for businesses to hire young people. That is not a view that I am expressing from a partisan point of view—[Interruption.] I will try to follow the example of the hon. Member for Harlow (Chris Vince) and not be partisan, by quoting from external organisations. The Federation of Small Businesses warns that many firms are now scaling back recruitment, with young workers the most exposed. The highly respected and neutral Institute for Fiscal Studies has warned of a worrying rise in unemployment among young workers, citing policy-driven increases in labour costs. The National Institute of Economic and Social Research has highlighted a cooling labour market with disproportionate effects on young people.

How in their first 18 months have the Government managed to have such a terrible impact on our young people? First, there is the national insurance rise. The Institute of Directors has described the national insurance rise as a direct disincentive to hiring. Young people are the least experienced, the least established and the most vulnerable to cost cutting, and when it is made more expensive to hire, employers hire fewer people. It is not complicated.

Secondly, we have Labour’s increase in the minimum wage. Since the 2024 general election, the cost of hiring a full-time minimum wage worker has risen sharply across every age group. For over-21s, the annual cost has increased by 15%, but for 18 to 20-year-olds, it has jumped by 26%, despite the fact that there is no employer national insurance to pay for that age group. For apprentices, it has risen by 25%. In fact, since Labour got into government, it now costs £4,000 more a year to hire an 18-year-old full time.

[Dr Arthur]

rose—

[Dame Harriett Baldwin]

I give way to a Member from the governing party.

[Dr Arthur]

I am very proud to be a Member from the governing party. I am sure the hon. Lady would not tell those young people in our constituencies that they do not deserve that pay rise, particularly when it is about ensuring that two people, doing the same job side by side to the same standard, get the same pay irrespective of their age. Surely that is a good thing.

[Dame Harriett Baldwin]

I am sad to see that the hon. Gentleman does not recognise that that young person will now be standing next to another young person who is unable to get a job. Surely he must agree that the level at which people are being paid has had an effect on the fact that there are fewer people in these jobs.

[Gareth Snell]

rose—

[Dame Harriett Baldwin]

Government Members do not have to listen to me; they can listen to the Federation of Small Businesses, which said that those wage rises risk pricing young people out of the labour market. That is not me speaking; that is the Federation of Small Businesses, and I am sure the hon. Gentleman will agree with it.

[Gareth Snell]

The Federation of Small Businesses will be looking for answers to those policy challenges that it is rightly putting to this place. What would the hon. Member’s answer be? By how much should young people’s pay be reduced in order to strike the balance that so many Opposition Members have talked about? By how much should the minimum wage be reduced for young people so that they can be guaranteed a job?

[Dame Harriett Baldwin]

I have news that will perhaps come as a bit of a shock to the hon. Gentleman: it is his party that is in power, and it should be his Front Benchers and the Chancellor he should be having that conversation with. Labour market economists at the Resolution Foundation—not normally considered to be right-leaning, by the way—have noted that when minimum wages rise faster than productivity, employers tend to favour experienced workers, disadvantaging young applicants. The very people Labour claims to champion are the ones being priced out of the labour market.

Thirdly, Labour’s business rates reforms have piled pressure on our high streets. As we have heard time and again in this debate, it is hospitality, retail and small firms that traditionally give young people their first job. Indeed, my first job was behind the bar at a now defunct pub; it taught me an enormous amount, and I was very grateful for the opportunity. The Confederation of British Industry has said that rising business rates “suppress investment and hiring”. When fixed costs for employers increase, their capacity to hire is reduced.

Lastly, and perhaps most damaging of all, is Labour’s Employment Rights Act 2025, which introduces sweeping day one rights across the board. The Government’s own economic analysis of the Bill says:

“higher labour costs could reduce demand for work, damaging the employment prospects of the same workers the package is trying to support…the risks are highest for workers with the weakest attachment to the labour market…and the youngest workers, since they are still gaining experience and skills.”

This is not a partisan point—this is the Government’s impact assessment of their own legislation.

According to the Youth Futures Foundation,

“the risk profile of recruiting young people has increased”.

The Chartered Institute of Personnel and Development reports that employers are already reducing recruitment plans, particularly for inexperienced workers, due to regulatory uncertainty.

[Dr Caroline Johnson]

My hon. Friend is making an excellent speech, and I am sorry to interrupt it. I want to ask her about the people who are writing hundreds and hundreds of applications for graduate schemes, and who are finding that they are locked out of those schemes, having been deprioritised because of the colour of their skin. Why should the Deputy Prime Minister’s son or the children of the Leader of the Opposition be prioritised for jobs over a tractor driver from Lincolnshire?

[Dame Harriett Baldwin]

My hon. Friend makes a good point.

The third-party testimony I have been giving shows that for large firms, the legislation is a headache; for small firms, it is a deterrent to employing; and for young people in our country, it is a disaster. When employers are forced to choose between hiring an experienced worker or taking a chance on an 18-year-old with no track record, the Government have made that choice brutally simple. The result is fewer opportunities, fewer first jobs and a generation shut out before they have even begun working.

The Labour Government’s policies are not pro-worker; they are anti-opportunity. They are killing youth employment with higher taxes, higher costs and higher risks for employers. Young people deserve better. They deserve a Government who understand how jobs are created, how businesses operate and how opportunity is built. They deserve a Government who will not price them out of the labour market. They deserve a Government who are prepared to reform the welfare system, so that they do not become trapped in welfare benefits dependency.

The Conservatives will stand up for those young people. We will abolish business rates for retail, hospitality and leisure, benefiting 250,000 businesses and reviving our high streets. We will break Labour’s doom loop with our golden economic rule and save £47 billion. We will abolish stamp duty. We will introduce a £5,000 first jobs bonus, backing the next generation. We will repeal every job-destroying, anti-business, anti-growth measure in the Employment Rights Act. We will double apprenticeship funding by ending debt-trap university degrees. We will overhaul the sickness and disability benefits system.

We will hold this Government to account, and we will fight for a jobs market that gives every young person the chance to succeed.

18:38

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

If only the Conservatives had had 14 years to do much of what the shadow Minister just outlined. It seems as though they never tire of pulling apart their own abysmal record. Today they have chosen to focus on the crisis of opportunity that they handed down to young people, and that this Government are determined to address.

The Conservatives were perfectly happy, it seems, for youth apprenticeship starts to plummet by nearly 40%. They sat and watched as the number of young people neither learning nor earning spiralled upwards by 300,000 in three years, and they were devoid of ideas to help young people overcome the barriers to work that they face. Perhaps worst of all, when confronted with undeniable proof of their failure, they blamed young people, instead of supporting them.

This Government will never take that attitude to the next generation—an attitude of ambivalence at best, and contempt at worst. Instead, we are clearing up the mess that the previous Government left in their wake. We are giving young people opportunities to succeed, and the support that they need.

We are determined to meet the size of the challenge that we inherited, and to deliver on the huge scale that is required. That is why we are refocusing apprenticeships towards young people. We are also bringing support to where young people are by expanding youth hubs to over 360 areas across Great Britain. That is just part of our youth guarantee, which we are rolling out so that every young person gets the chance to earn or learn; and it accounts for part of the more than £1.5 billion that was made available for employment and skills support at the Budget, which will create around 355,000 new training or workplace opportunities. Our jobs guarantee will make available subsidised paid employment for around 55,000 young people. These are significant interventions, while the Conservatives offer nothing. The vision they have to offer young people is as bleak as the reality of their record: they offer low-paid, insecure work, and a cold shoulder instead of a helping hand. We have seen where that leads, and we have chosen a different path.

[Graham Stuart]

The Minister knows that youth unemployment was at 20% when the Conservatives came into power, and at 14% when we left. Can he commit that his Government, with their vast array of programmes, will bring youth unemployment back below the level that his Government inherited? Previous Labour Governments have failed to do that, and shoved up youth unemployment, with all the damage that goes with that. Will his Government ensure that the numbers come down, and if they do not, will the Government put their hands up and admit their failure?

[Andrew Western]

That is why we are making interventions in the form of the youth guarantee and increased investment in the growth and skills levy. I gently point out that, as the right hon. Member will be aware, the rate of youth unemployment rose by 4% in the Conservatives’ last two years in office. Today we have heard attack after attack, and excuse after excuse for youth unemployment rising, but it was rising when they left office. This is not a new problem. It is a significant challenge that we are serious about addressing, but if the Conservatives wish to continue with their policy of collective amnesia about the mess that they left behind, they will never have anything to offer young people.

I turn to Opposition Members’ contributions, beginning with that of the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), who showed that the Conservatives have suddenly developed empathy for young people after leaving us with a NEET number of almost 1 million. We heard Tory Members compare the youth unemployment rate with those of other G7 countries, but we have the second-highest youth employment rate in the G7. We are not complacent, and we know that there is work to do. [Interruption.] I am aware that it is a different figure, but it is relevant when looking at the overall picture.

Several Members, but first among them was the shadow Secretary of State, said that nobody on the Government Front Bench had ever worked in a business. I suggest that she checks the record. Certainly, both the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Kingston upon Hull North and Cottingham (Dame Diana Johnson), who opened the debate, and I worked for many years in the private sector. I managed a small business; I worked in a global business; and I did several other jobs in the private sector in between.

Conservative Members suggested that they cut the welfare bill and halved unemployment, using a pick ‘n’ mix of flattering figures from various moments of their time in office. However, we, like people up and down this country, will judge them on their legacy when they left office. They left a spiralling welfare bill that disincentivised people from looking for work, and they left us the only G7 country with a lower employment rate than before the pandemic. They are not prepared to face up to the mess that they left our country in, and they do that time and again. I admire their chutzpah for continuing to table Opposition day debates on subjects on which their record is absolutely appalling and by a considerable margin the most significant factor in what we face today, but that does not mean that the public will forgive or forget what they left behind.

The Liberal Democrat spokesperson, the hon. Member for Richmond Park (Sarah Olney), asked about the impact of artificial intelligence on the workforce. I assure her that the Government are cognisant and mindful of the need to keep a close eye on it. We have recently set up a new cross-Government unit that will look at AI’s impact on the labour market, and will offer free AI foundations training for all workers. She raised concerns about the defunding of level 7 apprenticeships. I will not pretend that the Government’s decision is not difficult. We have chosen to target the apprenticeship funding that this Government have to spend on young people. That is because they are less likely to have a relationship with an employer who might be able to fund their training, and less likely to be able to access some of the other opportunities that people who access higher-level apprenticeships might have, and because there are other routes, including a more traditional higher-education route, for people to access instead of a level 7 apprenticeship.

The hon. Lady asked about the timing of the roll-out of the youth guarantee. The first tranche—the first 55,000 opportunities—will be in place from April, and by September we will see the roll-out of the full 300,000. She went on to criticise the national insurance increase in the Budget and its impact, but then set out that the Liberal Democrats would cut business rates and VAT and scrap that national insurance contribution increase. I say to her gently that that is the problem with the Liberal Democrat position; they never say how they would pay for it, or what they would do. She lambasts the decisions taken in the first Labour Budget. Would the Liberal Democrats choose to withdraw the additional money that has gone into the NHS? It is not credible to set out only what they are against.

We heard a number of excellent contributions from my hon. Friends the Members for Norwich North (Alice Macdonald), for Welwyn Hatfield (Andrew Lewin), for Gillingham and Rainham (Naushabah Khan), for Harlow (Chris Vince) and for Banbury (Sean Woodcock). Those excellent contributions not only highlighted the toxic legacy of the Conservative party, but set out the range of key interventions that this Government are making, which include, but are not limited to, the youth guarantee.

I think the right hon. Member for East Hampshire (Damian Hinds) asked a question about the timing of Connect to Work, but I may have lost track.

[Damian Hinds]

It was about the Minister’s projection for the Connect to Work numbers by the end of this financial year, its first year in operation.

[Andrew Western]

I thank the right hon. Gentleman for that clarity. He will be aware that Connect to Work is already live in two thirds of delivery areas. By April, that will be all areas. In his area of East Hampshire, it is already live, and we expect that it will support up to 4,800 people.

[Damian Hinds]

Is that for this financial year?

[Andrew Western]

I will confirm for him separately the figure for this financial year. That figure is the aspiration in the round, using the £18.7 million funding that has been made available.

The right hon. Gentleman then launched a staunch defence of zero-hours contracts. He will know that we have a fundamentally different view of that. It is my view that insecure work is a blight. It is hugely problematic for those on challenging budgets not knowing what hours they have to work each week. This is the fundamentally different perspective that we have on this side of the House.

[Damian Hinds]

Would the Minister apply that principle to bank staff working in the national health service who have what is in fact a zero-hours contract—a bank staff contract—to top up in other roles in the NHS when that support is needed?

[Andrew Western]

The challenge in the NHS is markedly different—I would freely acknowledge that—but the right hon. Gentleman is talking about other roles in the NHS. It is not unusual for people to hold more than one job if they are operating as bank staff, so they do not have the uncertainty about receiving no funding at all.

The right hon. Gentleman also made the criticism that the jobs guarantee only kicked in after 18 months. That is the final stage of a range of new interventions that this Government are putting in place, including an additional supported conversation at 13 weeks, followed by four weeks of intensive work coach support with specialist teams. It is not just a question of a jobs guarantee after 18 months; a broad range of interventions are being put in place.

The hon. Member for Beaconsfield (Joy Morrissey), who I do not think is in her place, said that apprenticeships were an opportunity for young people to find work, and I quite agree with her, but the reforms of the Conservative party had the effect of delivering a situation where, as the Liberal Democrat spokesperson said, the average age of those entering into apprenticeships was significantly increased. We are seeking to reverse that trend, and it is important that we do so. This is a key mechanism for giving young people the skills that they will need in the future. I believe she also called this a youth unemployment crisis of this Government’s making. I fail to see how that can possibly be the case when there was such a stark increase in the youth unemployment figures in the final two years of the Conservative Government.

The hon. Member for Bromsgrove (Bradley Thomas) said that the best welfare support of all was a job, so he will be delighted to see the additional 513,000 people who have entered into employment over the past 12 months. The hon. Member for Leicester East (Shivani Raja), who is also not here, said that she was tired of hearing about this Government’s ambition, but the Conservatives had a paucity of just that. They left almost a million NEETs, a welfare system that disincentivised work—something we have begun to address—and an employment rate lower than before the pandemic. They can accuse us of being too ambitious if they like, but they had given up on delivering opportunity for our young people—something that this Government will never do.

The right hon. Member for Beverley and Holderness (Graham Stuart) asked how we would encourage an employer to take a chance on a young person. We are doing that by not charging national insurance contributions for under-21s or for apprentices under 25, by fully funding apprentices at SMEs and by placing young people in six months of guaranteed work if they have been out of the workforce for 18 months so that they have the chance to prove themselves. That is a range of interventions that we are putting in place because we recognise that there is a challenge with youth unemployment. It is long standing and it is not new, but we take it very seriously.

[Gareth Snell]

On the point that the right hon. Member for Beverley and Holderness made, the natural extrapolation to what I believe the Conservatives are suggesting is that the way to incentivise that employer would be to allow them to pay less than the minimum wage or indeed cut the minimum wage rate for young people. I would oppose that. Would the Minister?

[Andrew Western]

I certainly would. I also note that the Opposition spokesperson, the hon. Member for West Worcestershire (Dame Harriett Baldwin), having complained about the increase in the minimum wage in her closing contribution, failed to say what level the Conservative party think it is acceptable to reset that at. I personally could not look young people in the eye and justify such a cut to their wages, but the Conservatives seem happy to do so.

The shadow Minister also pointed to the lack of a plan of action, but that was set out comprehensively by my right hon. Friend the Minister for Employment, underpinned by the £1.5 billion for the youth guarantee and growth and skills levy funding increase, but not limited to those interventions alone. The attacks on the national minimum wage increase are frankly a smokescreen for a party whose policies targeted young people for 14 years and would very clearly continue to do so now.

I cannot resist remarking that I thought it more likely for the hon. Member for Mid Leicestershire (Mr Bedford) to be in the young person category than in the 40-plus category. I note that he has had a change of employment status, because he was on the Front Bench on Monday but has returned to his previous position in the Parliamentary Private Secretary pigeonhole—there is a thriving labour market on the Conservative Benches, if nowhere else. He pointed to youth unemployment rising, homeownership falling and NEETs being on the up. That is a brave take given that every single one of those facts was true in July 2024. He then asked—again, this is daring, but I know that he is daring if nothing else—what that had done to the voting intentions of young people in relation to the Labour party. If I were a Conservative Member of this place—I have no intention of being one, and I do not know how much longer he intends to be one—I would not point to any other party’s polling among 18 to 24-year olds, because theirs is truly dire given the appalling legacy that they left behind.

[Andrew Lewin]

Speaking of daring, the Leader of the Opposition said today that the Conservatives do not want any more centrist ideas. What does the Minister make of that and their future with young people?

[Andrew Western]

If that is the position of the Leader of the Opposition, Conservative Members may need to find a new home other than Reform—[Interruption.] I am not sure where that comment came from, but I think it might have been my hon. Friend the Member for Bury South (Christian Wakeford), who knows a little about political journeys and will allow me to leave it there.

I, too, am concerned about the spiralling welfare bill and the rise in youth unemployment, about which we have heard a lot today, but the shadow Minister refused to set out what the Conservatives would do. If that is the best that they can offer on one of the few days a year on which they have control of the Order Paper—no idea, no clue and no plan beyond highlighting multiple problems in our society, which we inherited directly from them, as the facts show—I think they will have rather more Opposition days before they come back to the Government side of the House.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

18:58

Division 423

Question accordingly negatived.

Ayes: 91

Noes: 287

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House welcomes the Government’s commitment to invest in young people’s futures; notes that the UK has the second highest youth employment rate in the G7; recognises that the Government announced more than £1.5 billion of investment over the next three years, consisting of £820 million of funding for the Youth Guarantee to support young people to earn or learn, and £725 million for the Growth and Skills Levy; further welcomes that the expanded Youth Guarantee will reach almost 900,000 young people, including through Youth Hubs in every area in Great Britain and a new Youth Guarantee Gateway; further notes that this investment will also create around 300,000 more opportunities to gain workplace experience and training; and further recognises that, as part of the Youth Guarantee, the Government is breaking the cycle of unemployment by guaranteeing paid work to around 55,000 young people aged 18 to 21 who have been on Universal Credit and looking for work for 18 months.