No 10 told: fix youth jobs or risk a 'lost generation'

The future of the youth minimum wage will come under review as part of a major inquiry into rising inactivity among young people by the former health secretary Alan Milburn.

- Pippa Crerar

The social mobility expert said unless the government tackled some “uncomfortable truths” about the labour market there was a risk of creating a “lost generation”.

In an interview with the Guardian, he said the rising overall welfare bill was “unsustainable fiscally and economically” but insisted that any reform of the system had to focus first on righting social injustices.

Milburn’s intervention on the minimum wage echoes recent warnings from economists that the increase in youth rates - which the government is trying to equalise with the adult rate - could lead to some being “priced out” of entry-level jobs.

But it is likely to be greeted with dismay from some Labour MPs and the unions after the party pledged to end “discriminatory” lower minimum wage rates for younger workers so that all adults would be entitled to the same legal pay floor.

In a warning to Labour yesterday, Andrea Egan, the incoming general secretary of Unison, wrote in the Guardian that she would “call time on our union’s inexcusable habit of propping up politicians who act against our interests, undermine our fundamental values, and make our lives worse”.

As Keir Starmer struggles against a backdrop of difficult poll ratings, Milburn, who served under Tony Blair, suggested the government could still turn around its fortunes if it was able to generate hope for the future. Transforming young people’s prospects could do that, he said.