Youth Unemployment: Autumn Budget 2025

Answer from Torsten Bell

Last week, the Office for Budget Responsibility set out its updated forecast for the UK economy, including for unemployment to peak this year before falling in each and every year thereafter. Longer-term problems for young people have been building in our labour market for far too long, with employment rates that are too low and levels of those not in education, employment or training soaring in the last Parliament. We will not allow a generation of young people to be left behind, which is why the Government have committed £820 million for the youth guarantee, strengthening employment support and guaranteeing jobs for the long-term unemployed.

Answer from Torsten Bell

The hon. Member's phrasing of his question was very telling about the challenges we all face in our labour market, because while we have seen more jobs created over the last year, there is a longer-term challenge with youth unemployment. If we look at the last Government, we never saw youth employment rates recover to the level seen under the previous Labour Government after the financial crisis, which was exactly the experience he mentioned. It is important that we grapple with that long-term challenge, and there is the newer challenge with the huge increase in NEET rates in the last Parliament specifically. We absolutely need to focus on both of those, which is why we are focusing apprenticeship funding on young people in particular, why we are introducing the youth guarantee, and why we have the independent review led by Alan Milburn to focus on the root causes of these challenges.

Answer from Torsten Bell

I think all of us recognise that our hospitality and retail sectors have had a difficult time in recent years. For retail, that goes back before the pandemic, with the growth of online shopping. The squeeze on energy costs in the outrun of the pandemic has squeezed how much people are spending on hospitality. Specifically on the hon. Member's question about national insurance, I am sure he is aware that those under the age of 21 and on youth apprenticeships are exempt from national insurance entirely. I would gently point out that the youth employment pattern we see in the labour market long predates the changes to national insurance last year.

Answer from Torsten Bell

My hon. Friend has rightly been raising this issue for some time, predating the election. I will take the two parts of her question in turn. The impact of AI is something that is being looked at across countries—there is a unit inside Government looking at exactly that. More importantly, though, she mentions the crisis happening now, with some young people unable to get the job opportunities that we all want them to have, which they have not had for some time. We will bring forward further measures to strengthen the youth guarantee, which is an important measure to increase the employment support available to our young people and to ensure that a job guarantee is there for those who are long-term unemployed.

Answer from Torsten Bell

My hon. Friend and I have discussed these issues on many occasions, particularly as they are specific to his constituency and other coalfield communities. There are challenges, particularly with youth employment, which goes back to the last decade in particular, and we absolutely need to prioritise that. However, I would also say a word of warning on the view of the overall labour market. Looking at the employment level last year, which was around 75%, there have been only two years in peacetime in the past 100 years when Britain has had a higher employment rate. I think we should be a bit careful about talking down the resilience of the UK economy or, as in this case, the resilience of the labour market. We have had only two years in the past 100 in peacetime when Britain has had a higher employment rate than last year.

Answer from Torsten Bell

I want to offer my condolences to the hon. Gentleman for the recent loss of his father. It is something we all have to face at some point in our lives, but it is a lot to deal with. All our thoughts are with him at this time. In answer to the hon. Gentleman's question, no, there is no change in Government policy. Our view is that we should see alignment of the national minimum wage and national living wage rates, but that should happen in the right way, which is with the guidance of the Low Pay Commission, which will continue to play an important role.