PM says youth unemployment is a 'catastrophe and a moral failure'

Prime Minister Andy Burnham has warned the UK faces an "economic catastrophe and moral failure" due to the nearly one million young people not in education, employment or training.

Writing in the Times newspaper, Burnham has laid out his case for the government to "invest in the success of our young people" rather than "pay for failure through the benefits system".

"Benefits will become the backstop, not the starting point," Burnham wrote in his piece published in Monday's paper.

This week, the government is expected to announce plans aimed at giving young people thousands of job opportunities. The Conservative Party has labelled the government's youth employment strategy "a disaster".

According to the latest data from the Office for National Statistics, there are almost a million people aged 16 to 24 known as Neets - not in education, employment or training.

Around 39% are unemployed while the remaining 61% are economically inactive, meaning they are not seeking work.

The number of 18 to 24-year-olds claiming unemployment-related benefits stands at 331,000, almost double the number in 2016, but lower than the peaks of around 500,000 seen after the financial crisis in 2008 and Covid in 2020.

The UK government will spend £353bn on welfare next year, just under half of which will go on the state pension; while the remainder is spent on benefits such as health, disability and unemployment payments.

In his opinion column, the prime minister said this reflected a "generation being denied its chance to get on in life".

"This is an economic catastrophe and a moral failure. And it must change," he wrote.

Burnham said two years of Covid lockdowns, social media that erodes "confidence and sense of belonging", an education system focused on the "university route", job markets with "too few opportunities" and failures of previous governments have all contributed to the Neets crisis.

"Today, the welfare system provides an assessment, a payment and, after that, goodbye," Burnham wrote. "Too often there is no support, no offer of skills and no opportunity to get a job."

He flagged a shift in the approach to welfare, which he said "will no longer begin by establishing which benefits a young person is entitled to" but rather "begin with their ambitions and the help they need to achieve them".

"We either invest in the success of our young people or pay for failure through the benefits system. We cannot afford to do both," Burnham wrote.

Ministers are this week set to release plans for 22,400 apprenticeships a year in businesses such as accountants, legal services and consultants, in addition to 40,000 placements in the construction industry.

The Conservative shadow business and trade secretary Julia Lopez said: "Labour have been a disaster for youth jobs. Their tax hikes and red tape have made it harder for businesses to hire, invest and grow, destroying opportunities for young people looking to take their first step on the career ladder."

The party has said they would cut £36bn a year from the welfare budget including by reintroducing the two-child limit for Universal Credit and restricting who receives housing benefit.

Green Party deputy co-leader Mothin Ali accused Labour of planning a "welfare cuts charter that would take support away from young people who are already struggling and vulnerable".

Burnham confirmed the long-awaited full review of young people and work will be published next month, and vowed to take its recommendations "seriously".

While the prime minister has emphasised the importance of incentivising young people into work, the review's author Alan Milburn suggested there could be cuts to benefits.

The former health secretary told the Guardian that there was a need to "redistribute money from the welfare system to more employment support".

"This is not a workshy, snowflake generation," Milburn said. "If we provide more opportunities and we provide more support, the overwhelming majority of young people will take that, because that's what they want. The system isn't delivering what young people want, which is a job."

Milburn calculated that the government spends 25 times more on benefits for young people than getting them into work, describing the current rate of Neets as "shameful".

In order to cut the benefit bill, both Burnham and Milburn will need to secure the support of those Labour MPs who previously baulked at Sir Keir Starmer's attempts to reduce spending by £5bn a year.

Backbenchers objected to proposals to tighten restrictions for those claiming working-age health-related benefits and, following a rebellion, the then-prime minister was forced to abandon his plans.

Two of Burnham's closest supporters Louise Haigh, his effective deputy, and Anneliese Midgley, his chief whip, who are now in government, were both leading lights in the welfare rebellion.

But difficult decisions are coming nonetheless and government insiders are clear that the link between cuts to welfare entitlement to fund increased jobs support is inevitable.

While Burnham has promised not to introduce "crude cuts", Labour advisers say it is impossible to leave the system for under 25s unchanged.

Work and Pensions Secretary Pat McFadden is sympathetic to Milburn's call for a new, parallel benefits system for young people - but that level of change will require legislation.

Chancellor John Healey is due to give his first Budget on 28 October, and there is not expected to be much mention of welfare in it.

Instead a bill is being prepared and the New Year is when that is likely to be voted on by MPs.

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