Firms need to get onside if Labour’s youth employment push is to have a chance of working | Richard Partington

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Alan Milburn’s report will call for benefit cuts but lack of entry-level job opportunities is also driving crisis‘I’m scared about my future’: young people on the stress and…

This week’s long-awaited review will call for benefit cuts but lack of entry-level jobs is also driving the crisis

A generation is being sold short. Almost a million young people are not in education, employment or training (Neet). Austerity and the Covid pandemic cast a lengthy shadow, AI is upending the jobs market, and the cost of living is soaring – all under the microscope of the social media age.

This week Alan Milburn’s landmark report on young people and work will bring Britain to a fork in the road: either continue on this path of state and market failure or sharply change direction.

It will be a big test for Andy Burnham’s government. Milburn will call for controversial benefit cuts for under-25s in exchange for a legal guarantee of a job or training. Alongside changes to education and health, his plan will take a decade to implement.

Behind his argument is a principle Labour has struggled with – that restricting benefits to encourage work is a good idea.

The system clearly is not working. Milburn makes the case eloquently – pointing out that for every £1 spent on job support £25 goes on benefits. But there are also important caveats: change will count for nothing unless employers play their part; half of all Neets are not on benefits, and bad jobs and a lack of entry-level opportunities are far bigger drivers of Britain’s youth jobs crisis than the generosity of the benefits system.

Last week the Bank of England deputy governor Clare Lombardelli told me Britain’s young people were bearing the brunt of a “low-gear economy”, with employers freezing recruitment amid the war in the Middle East.

Unemployment among the under-25s has risen at the fastest rate since the 2008 financial crisis to reach its highest level relative to the total for all ages since the early 1990s. Young people now make up about 40% of all unemployment.

All of this compounds a drop in entry-level jobs over the past two decades.

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