Youth Unemployment

Sarah Smith Excerpts

Wednesday 28th January 2026 Commons Chamber

[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.