Labour plans welfare shake-up as scale of youth jobs crisis revealed

Milburn warns of lost generation, with million not working or studying

- Richard Partington Peter Walker

Labour is poised for a fresh attempt at welfare reform after a major government-backed report said youth worklessness was costing Britain more than £125bn a year.

As official figures revealed the number of young people not working or studying had broken through a million for the first time in more than a decade, Alan Milburn said the government had a responsibility to the next generation to take action.

Launching his landmark review of Britain’s youth jobs crisis, the former Labour cabinet minister said Keir Starmer’s government had shown a renewed desire to overhaul the benefits system as part of changes to tackle soaring youth unemployment and inactivity. “As I’ve spoken to cabinet ministers about it, my sense is that there is an appetite to go back into this, and to go back into it in the right way,” he said.

Overall unemployment in Britain is now at the highest levels since the outbreak of the Covid pandemic, with young people bearing the brunt as businesses warn of the impact of tax increases and an economic downturn from the Iran war.

The prime minister said Labour was taking action to address the “sobering” findings in Milburn’s report by ploughing money into a “youth guarantee” and funding more work experience and job placements.

Speaking on a visit to a training facility for apprentices in west London yesterday, Starmer acknowledged further steps were required. “Clearly we need to do more,” he said.

“We will now work with Alan on what more needs to be done. I’m pleased that some of the measures we’ve already put in place are coming on train next month.”

Labour has faced fierce criticism from opposition leaders and business groups who say its policy decisions have only added to Britain’s crisis in youth jobs, including tax increases and a rising minimum wage.