Labour considers new welfare changes after youth jobs report

The Story

A government-backed report by former Labour minister Alan Milburn states youth unemployment is costing Britain more than £125bn a year, as official figures show the number of young people not working or studying has surpassed one million for the first time in over a decade. The report recommends a “whole system reset” involving schools, welfare, and employers. Prime Minister Keir Starmer acknowledged further steps are needed and said the government is working with Milburn on what more can be done.

Key Facts

• Youth unemployment is costing Britain more than £125bn a year, according to the report.
• The number of young people not in education, employment, or training (Neets) has surpassed one million for the first time in over a decade.
• The report warns of a 25% rise in Neets to 1.25 million within five years unless action is taken.
• The average lifetime cost to the exchequer from a Neet aged 18-24 is £29,000 per year.
• An individual who is Neet in early adulthood could lose out on £52,000 per year on average over their working life.
• The government spends about £8.1bn a year on benefits for young people, with over half going to Neets, and £3.2bn on health and disability benefits.
• Six out of 10 young Neets are not looking for a job, and a similar number have never worked.
• Labour faced fierce criticism from opposition leaders and business groups for its policy decisions, including tax increases and rising minimum wage.
• Charity leaders, including the Mental Health Foundation’s Mark Rowland, urged ministers not to weaponize the benefits system to punish or shame young people.
• Milburn’s final recommendations are expected this autumn, alongside a separate disability benefits report.

Conflicting Reports

The article notes that Labour has faced fierce criticism from opposition leaders and business groups who say its policy decisions have added to the youth jobs crisis. Additionally, charity leaders and campaigners urged ministers to resist using the benefits system to punish or shame young people.

Still Unclear

• Whether Keir Starmer will remain prime minister amid a potential Labour leadership challenge.
• What specific welfare changes the government will propose.
• How the government will balance welfare savings with reinvestment in employment support.

Misconceptions

No widespread misconceptions addressed in the source article.

Key Figures

• Alan Milburn, former Labour cabinet minister and author of the report
• Keir Starmer, prime minister
• Mark Rowland, chief executive of the Mental Health Foundation
• Pat McFadden, work and pensions secretary
• Stephen Timms, social security minister

Sources: The Guardian