Angela Rayner risks writing a charter for youth unemployment

Yahoo

03-03-2025

Harry Enfield's grumpy character Kevin, a floppy haired parody of youth who graced our TV screens in the 1990s, depicted a rebellious teenager who was stepping into adulthood with great suspicion and even greater lethargy. The stereotype of a moody teen wanting to spend all day in bed might be 'so unfair', as Kevin would say, but there is something in this tongue-in-cheek portrayal which endures to this day. Gags aside, official figures suggest that even part-time Saturday jobs are on the out. Behind the cliches about workshy teens, a worrying trend has bedded in that we all need to pay attention to.
Britain now has almost a million 16 to 24-year-olds who are not in education, employment or training (known as Neet), according to the latest Office for National Statistics numbers. That's the highest level since 2013, when the economy was still reeling from the financial crisis. A big difference is that in 2013, most people in that group were looking for a job but struggling to find one.
Today, that has flipped and the majority – some 595,000 of the 987,000 Neets are classed as economically inactive, meaning they are not hunting for a job nor hoping to apply for an educational course. Young men are more likely than women to be a Neet (14.4pc compared with 12.3pc), a phenomenon that headteacher Caroline Barlow last year said was partly down to a culture of low expectations for male students.
This is not a footloose and fancy-free cohort living for the next party or beach holiday. Nor are they simply lazy. The rise in inactivity is linked to a post-pandemic mental health crisis. A survey of 500 Neets by the King's Trust charity last week found that almost one in three would like to work but said their poor mental health prevented it. Half of respondents said they felt hopeless about their future because they were unemployed. The Prince's Trust has said that this group is more likely than their peers to feel as if they have failed in life.
Getting this group into work would give them a sense of purpose, life skills and confidence. Instead, Neets are stepping into adulthood feeling lost and adrift, and so a vicious cycle begins.
The Government has outlined plans for a benefits crackdown and a 'youth guarantee' to ensure all those who are able to can access either work or training. But to be a success this plan needs bosses who are willing to hire. Instead, the managers who have traditionally given these school leavers their first jobs are now reluctant. They blame the £25bn increase in employers' National Insurance contributions (NIC) coming into force in April, which disproportionately affects people on low wages and in part-time work.
They also point to Angela Rayner's looming Employment Rights Bill, which they fear could make hiring someone who is inexperienced more trouble than it is worth. Under the reforms, employees will be able to claim full sick pay and take employers to tribunal from day one on a job. The Treasury is already said to be concerned that the employment tribunal system could become clogged with claims.
If the final package is considered too inflexible or too employee-centric, why take a chance on a risky hire?
'I've not been in a meeting [with ministers] where this point hasn't been made,' one senior executive tells me.
The NIC raid already means that the cost of employing a worker on 15 hours a week will rise by 73pc, according to UKHospitality. As employing staff gets more costly, it is completely understandable that companies will start turning away less experienced candidates, particularly if Labour's workers' rights overhaul means they cannot easily get rid of someone if they hire a dud candidate. Rayner's workers rights revolution risks becoming a charter for youth unemployment.
Warnings about this have been reverberating for months - and not just the tribunal aspect. Lord Wolfson, the chief executive of FTSE 100 retail giant Next, has expressed concerns about plan to ban 'exploitative' zero hour contracts as part of the overhaul. 'We offer staff extra hours in the run-up to Christmas. If the legislation is going to mean that those hours have to be contractually binding forever then we just won't be able to do it at all, it would be impossible,' he told the BBC this year.
Nobody is saying that Rayner's workers rights overhaul isn't needed. There is a general consensus that workplace rules need to be modernised – the business and trade committee argues in a report today that there is clear evidence of worker exploitation across different sectors. Official checks on areas such as forced labour in a company's supply chain are so weak that the UK is at 'serious risk of becoming a dumping ground' if it does not align with tougher laws amongst allies, MPs warn. Liam Byrne said the committee heard evidence about the abuse of workers in this country which 'frankly horrified us'. It is clear that there is a serious problem that needs addressing.
Yet as the number of Neets rises, bosses' warnings about unintended side effects need to be heard. The point of this package of reforms is to fight nasty bosses who are exploiting staff – it would be a disaster if it accidentally ended up stopping the lost and lonely from getting their first job.
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