For a generation of unemployed young people, Labour isn’t working

The rise in youth unemployment to an 11-year high is not a marginal problem – it is an existential threat, setting up millions for a lifetime on benefits, says former health secretary Alan Milburn, who is leading an independent review into Neets

‘If you miss that first rung on the ladder in your late teens and early twenties, the risk is you never climb it,’ says Alan Milburn (Getty/iStock)

The jobs numbers out this week are the starkest and most sobering I’ve seen in decades. One in six young people is unemployed – an 11-year high. And, terrifyingly, almost 1 million young people are not in education, employment or training (the so-called Neets) at all. They’re not even looking for work. That’s enough people who are detached from the labour market to fill Wembley Stadium 11 times over. If they formed a city, it would be the third-biggest in the country.

We can do all the numbers. But let’s put it into words. This country is now facing the existential risk of a lost generation. Something dramatic and permanent is changing in the labour market. The NEET phenomenon is just the tip of the iceberg. Parents are more worried than ever about the world their kids are growing up in. About their prospects for a job, a home, a decent future.

This is not a marginal problem. It is an existential threat to their life chances and to our country’s future prosperity. If you miss that first rung on the ladder in your late teens and early twenties, the risk is that you never climb it. It can easily cascade into a lifetime on benefits.

It means you start your adult life never having experienced the dignity, discipline and direction that work can provide. Never having earned a payslip. Never having built the habits and skills of a first job. Never having gained the connections and confidence that work can bring.

The most horrifying statistic of the many that I’ve come across in my role chairing a national review into young people and work is the fact that 45 per cent of 24-year-olds who are NEET have never had a job. If you haven’t had a job by the age of 24, the chances are that you will spend a lifetime relying on the state.

My fear is that short-term inactivity becomes long-term exclusion – that we are witnessing the gathering of a perfect storm. Over half of young people who are NEET report a health condition. The surge is in mental illness and conditions like autism and ADHD.

That this is a more anxious generation is not peculiar to the UK. It’s true across the world. But what is peculiar to the United Kingdom is that these conditions are translating into economic activity at a scale markedly different from that seen in other countries. Our NEET rate is triple that of the Netherlands – and twice those of Japan and Ireland. What’s going on is not inevitable. It can be addressed.

What we can’t have is a situation where a young person is diagnosed with a condition, and then the system – as it seems to do at the moment – says, “You’re not fit to work. The best that we can aspire to for you, for this generation, is a lifetime on benefits.” That’s a lifetime on the scrapheap.

Becoming NEET doesn’t begin at 16. A child who is not school-ready at age four or five is three times more likely to become NEET at age 16 or 17. Too many young people leave education without either the qualifications or the attributes they need to do well in today’s fast-moving labour market. Poor health and poor education put them on a downward escalator into the world of benefits. The number of young people claiming health and disability benefits has doubled in just five years. Many find it hard to escape.

Meanwhile, the jobs market is moving against young people. Saturday jobs seem to have all but disappeared, denying young people a taste of work and the vital experience employers crave. AI is transforming the jobs on offer; vacancies in sectors like hospitality are down by up to 50 per cent since 2023, and apprenticeship starts for young people have decreased by almost 40 per cent in the last decade.

We have removed the early rungs of the career ladder, and then expressed surprise when young people cannot climb it.

The government’s Youth Guarantee – which offers paid work placements to young people on universal credit for 18 months, with sanctions for those who refuse without a reasonable excuse – is a welcome attempt to address these problems. But we must go further and face up to the fact that there is a whole-system failure – in education, as much as in welfare, skills, and the labour market.

That must be addressed if this generational challenge is to be met. Usually, when growth is a bit anaemic, which it is at the moment, young people are the first to be hit. But that isn’t happening. And it’s not going to happen, in my view, unless there are some profound changes in both what the government does and what employers do.

What we’ve got to do is put young people on an “upwards escalator” of opportunities, putting them on a pathway to better skills and decent jobs.

For decades in Britain, the foundation of our unwritten social contract has been that each generation would be able to do better than the last. That great British promise is, for this generation, being broken. We have to fix it. Since our future depends on theirs, this is the generation to invest in. A country that invests in its young invests in its future.

The government was elected on a one-word mandate of “change”. It must now deliver on that promise. The clue is in the title. It’s the Labour Party – it’s supposed to be about work. We need a generation of young people who are feeling not hopelessness, but hope and optimism about the future. And that requires change.

Alan Milburn is a former Labour health secretary, and chair of the Young People and Work review