Former minister Alan Milburn has laid bare the state of Britain’s youth unemployment crisis in a shocking report, which warned that the country’s young people are being let down at all levels.
His report blames a “whole system failure” – from health and education to welfare – over decades, but that hasn’t stopped commentators and businesses up and down the country from pointing the finger at the chancellor.
Rachel Reeves’ decision to raise the national minimum wage for young workers – and plan to eventually equalise it for all ages – has often been blamed for putting employers off hiring less experienced young adults looking for their first job.
But amid calls for her to reverse the policy, former health secretary Mr Milburn warned against assuming implementing a lower minimum wage would serve as a silver bullet.
He made it clear at the launch of his report on Thursday that “there are no easy solutions” to fix the crisis and warned recent change to economic policy “is not the root cause of the problem”.
Acknowledging this is a “really big concern” for employers and that the government must “minimise the risks for the employer” and “maximise their incentives”, Mr Milburn went on: “However, many employers don’t pay the youth minimum wage, they pay the adult minimum wage, so that change in policy has had a minimal impact on them.”
Asked again if the government should listen to employers in hospitality and reverse the changes to minimum wage, he pointed to the effect of the cost of living crisis on trade.
“Now it’s perfectly reasonable to say, you know, does raising national insurance contributions and raising the national minimum wages and make that worse or better, but let’s not pretend that is the root cause of the problem,” he said.
“Seriously? I mean, honestly, it’s the sort of thing that so frustrates me about this thing – that everybody goes for the bloody easy solution. Let’s just go for the easy solution.
“There are no easy solutions. None. They’re all hard.”
He added: “If we keep just going on, you know, if Rachel hadn’t done this and Rachel hadn’t done that, everything would be bloody lovely. Really? Come on.”
Mr Millburn instead urged lawmakers to look at a whole system approach, telling a press conference on Thursday: “My core diagnosis is that the system set up to support young people from the world of education into the world of employment is no longer working in too many places It does not just fail to tackle the problem, it reinforces it.”
His review warns Britain’s schools, health system, welfare state and labour market are no longer fit for purpose, and said that layering new programmes on top of a broken system won’t work.
Ms Reeves’ changes to national insurance contributions and minimum wage has become a focal point for government critics seeking to pinpoint blame for the country’s youth unemployment crisis.
Currently, employers must pay workers aged between 18 and 20 at least £10.85 an hour – a figure which rose from £10 in April.
Older workers aged 21 and over must receive at least £12.71 – rising from £12.21.
Sir Tony Blair joined critics of the changes in a scathing attack on Labour’s policy agenda earlier this week, which singled out measures including new workers’ rights laws and the above-inflation uplift to the minimum wage.
Mr Milburn also agreed with his former boss Sir Tony that “politics needs a plan”, and said there was “no doubt that these changes have had an impact” in sectors including retail and hospitality.
His review found the youth unemployment crisis is costing Britain £125bn a year, as new figures show the number of young people neither working nor learning has reached more than one million for the first time since 2013.
The eye-watering figure, which is more than the country spends on education and almost double the defence budget, comes as Mr Milburn warns that Britain faces a “lost generation” without serious action to tackle the crisis.
In his interim report, Mr Milburn warns that without urgent action, the number of young people who are Neet will rise from 1 in 8 to 1 in 6 young people by 2031, affecting 1.25 million young people.
Speaking on Thursday, he warned that the problem is “much worse” than he initially thought and called for a cross-party effort to find a solution.
