Call to rethink youth minimum wage rates amid rise in Neets

Labour has been urged to break a manifesto pledge to scrap youth rates of the minimum wage amid a dramatic rise in the number of young people out of work and education.

- Richard Partington

In a report sounding the alarm over a sharp increase in the number of 16to 24-year-olds who are not in education, employment or training (Neet), the Resolution Foundation thinktank urged Labour to change course to avoid them being “priced out” of entry-level jobs.

It said the number of young people who were classified as Neet had risen by 195,000 over the past two years to reach 940,000, and was poised to hit 1 million for the first time since 2012.

Labour promised before last year’s general election to scrap “discriminatory” lower minimum wage rates for under-21s so that all adults would be entitled to the same legal pay floor.

The chancellor, Rachel Reeves, announced a phased approach in last year’s budget, kickstarting the process to equalise the minimum wage with a bumper rise for 18to 20-year-olds.

The rate was increased by 16.3% in April to reach £10 an hour, significantly above the 6.7% rise for those aged 21 and over on £12.21 an hour.