'LOST GENERATION!' - Landmark youth unemployment report shows 'SHOCKING' extent of Labour's FAILURE

Added: 2026-05-28

[00:00:00]You might have seen that just this morning there were new figures released showing that there are now over 1 million young people in our country not in education, employment or training.

[00:00:13]It's actually more than a statistic.

[00:00:16]It's a warning. A warning that far too many young people are reaching adulthood only to find the door to opportunity closed. They're neat. It's an ugly term, but it's a term with ugly consequences, too. Aspirations thwarted, confidence drained, futures narrowed before they've properly begun. During the course of this review, over the last few months, I've met, spoken, heard the views of hundreds of young people. Their voices sit at the heart of this report. Behind the statistic lie 100 one million individual lives all different but with all with one thing in common. Not one of them wanted to end up being not in education, employment or training. I start with a very simple proposition. When Patrick first asked me to do this work I came to it with this view. Every young person has something to give a skill an aptitude a potential.

[00:01:13]Every one of them should have an opportunity to learn or to earn. But the neat rate in our country has barely been below 10% in 25 years. It's one thing to be ignorant about a problem. It's quite another to be neglectful. And I'm sad to say that for far too long in our country, the neat crisis has been swept under the carpet. Not any longer. This review exists because today Britain faces a genuine generational fault line.

[00:01:43]We do not just have a chronic problem.

[00:01:46]It is getting worse, not getting better.

[00:01:48]And we have neither a system or a plan to deal with it. A decade or more ago, the problem was temporary youth unemployment. And youth unemployment today is still of course far too high.

[00:02:00]But now it is something deeper and far more corrosive. It is youth detachment from the labor market. Nearly six in 10 young people who are need today are economically inactive. That means they not only don't have a job, they're not looking for a job. Six in 10 have never had a job. 20 years ago, that figure was closer to 4 in 10. Detachment is no longer temporary. For too many young people, it is becoming permanent. If the current trajectory continues within 5 years, we forecast in this report that today's 1 in eight young people who are neat will climb to 1 in six. We are at risk of a lost generation. There is much talk of course of this being an economic or a fiscal crisis and indeed it is. The cumulative cost to our country of almost 1 million young people outside of education and work is estimated in my report at 125 billion pounds a year.

[00:03:02]More than we spend on education. But the principal cost isn't borne by the taxpayer. It's borne by the young person. Being neat has a long-term scarring impact. Cost to their confidence, cost to their health, cost to their future income. For those who spend the whole period from 18 to 24 years of age outside of education and work as about a quarter of 24 year old needs due, the lifetime loss can approach £300,000.

[00:03:33]That is not an abstract number. It's a deposit never saved, a home never bought, a pension never built, the hope of a good life never realized. So this is more than an economic crisis. It's a moral one. So the question today is no longer whether the current position is somehow unfortunate. It's whether it's sustainable. My answer is no, it is not.

[00:03:57]As a growing older generation becomes increasingly reliant on the next generation to sustain it, every young person has to have more opportunities to learn or earn and to get a job. The problem is that for too many young people, opportunities are not growing, they're shrinking. Reversing that starts with understanding what is driving it in the first place. This is the first of two reports that I'll produce as Pat was saying. The next in the autumn will provide proposed solutions to the need crisis. This first problem diagnoses this first report diagnoses the problem.

[00:04:33]It contains a huge amount of data analysis, new research surveys of young people, employers, teachers, health professionals. During the course of this review, we've spoken to countless organizations, disability charities, youth organizations, businesses, schools, colleges, health professionals, councils, mayers, political leaders.

[00:04:53]I've been around politics and public policy for more decades than I care to remember. I can genuinely say I've never come across an issue as visceral as this with the public. Wherever I've been, whoever I have spoken to, I've come across a deep concern bordering on a fear about the future facing young people. Parents are more worried than ever about their kids. Grandparents, too, about their youngsters prospects for a job, a home, a decent future. For decades in Britain, the foundation of our unwritten social contract has been that each generation would be able to do better than the last. That great British promise for this generation is being broken. The 1 million young people who are neat are its leading casualties.

[00:05:45]They've been hit by a perfect storm. A generation ago, almost two in three of this age cohort were in work. Today it's barely 50%. For under 18s in education, the number also holding down a job has halved during that time. Now there's been much focused about the impact on youth employment of recent policies like the youth minimum wage and the rise in national insurance contributions.

[00:06:11]Employers repeatedly raised this with me as an issue and it is true. The changes have had an impact. It's always a risk for an employer to take on a young person precisely because they're unproven. So public policy wants more young people in work. It has to minimize risks and maximize opportun incentives for employers. But no one should pretend that the structural change that has been taking place in the youth labor market has only recently been triggered. Over the last few decades, Britain has had a jobs boom, but one that has largely passed young people by. Entry- levelvel jobs have long been in sharp decline.

[00:06:53]Compared to the start of the century, there are 1.6 million fewer low and mediumskilled jobs in the economy.

[00:06:58]Vacancies and hospitality have harved in the last four years. Saturday jobs have long since been in freef fall.

[00:07:06]Apprenticeship starts amongst young people have fallen by 35% over the last decade. The first rung of the ladder in careers has thinned. For too many young people, it is now simply out of reach.

[00:07:19]That places them in a hopeless catch 22 position. Where employers ask for work experience, but opportunities for young people to gain it have either narrowed or have gone. And by the way, that is before the impact of the AI revolution to come on jobs and workplaces.

[00:07:38]For decades, falling labor market participation was offset by rising education participation among the young.

[00:07:45]But in recent years, that too has plateaued and has marginally fallen. The biggest falls have been in further education and apprenticeships. The roots most accessible to the potentially neat cohort. Fewer opportunities there in education mean more young people ending up being neat. So none of this is a recent phenomenon. It's a long-term structural change. And yet, for too long, public policy has treated youth disengagement mainly as a supply side problem. Make young people more employable. Raise standards in schools.

[00:08:20]Improve their skills. Toughen their benefits. All of these things matter, but then they're not enough if the labor market, the demand side, is no longer reliably bringing people in. It's striking that almost onethird of today's needs have got good GCES, 15% have a degree. Being neat used to be something that happened to other people's children. Now parents in all parts of the country worry it could be their child. If the need problem is to be solved, change will be needed not just on the supply side but on the demand side too. in labor market policy and in employer practice. Both will be needed because there's also been a fundamental change in the makeup of who is becoming neat. There is no singular explanation for the need problem worsening. But there is one standout change. Over the past decade, the proportion who say their need due to a worklimmiting health condition has increased by 70%. The proportion of needs citing mental health or conditions like ADHD and autism as their primary condition has more than doubled. For the first time in perhaps two centuries, changes in health, especially in mental health, are impeding economic growth and causing a contraction in the supply of labor. Poor health reduces participation. Reduced participation worsens health. Worsening health makes return to work hard as stale. This is the vicious cycle that simply isn't being broken. Once health rellated inactivity takes hold, it sticks. That's what makes the problem more entrenched than it has ever been before. Of those who fall into health related economic inactivity, our research suggests that almost eight in 10 remain neat more than two years later. The damage done to the life chances of those young people is almost incalculable. And here there is an elephant in the room question. How much are young people themselves to blame? Have they become softer, flakier, less resilient, more willing to blame mental health than actually suffer from it? That is not what I found. One of the most striking findings in this review is that 84% of neat young people that we surveyed said they wanted a job or they wanted to be in training. So I do not accept the caricature of a generation that is not interested in work. This is a generation that wants the chance to work. I do not accept that mental health is simply an excuse. We've drawn on Professor Peter Fongy's brilliant work on mental health prevalence, which confirms that distress among the young is real and it is rising. I do not accept either that the answer is to tell young people who are struggling simply to try harder. The young people I have met are trying, applying for dozens, sometimes hundreds of jobs, hearing nothing back. And it is silence that does not just dent confidence, it kills hope. There is no shortage of effort on the part of young people. The shortage is of opportunity and of support. Young people today are different. Not worse, not lazier, not less capable, different.

[00:11:43]They've grown up in a digital world.

[00:11:45]They were hard hit by the pandemic.

[00:11:46]They're more open about mental health.

[00:11:48]They are more anxious in a world of greater uncertainty and less opportunity. Perhaps that is not so surprising. Every generation is different from the one that went before it. The systems that support them into adulthood have always had to adapt. This time they have not. That is not a failure of young people. It's a failure of a system stuck in the past. Of course, personal responsibility matters.

[00:12:16]Effort matters. Habits matter. Families matter. Aspiration cannot be gifted by the state. Young people have obligations. Families have responsibilities. parentance as well.

[00:12:26]But it is dishonest to pretend that individual effort alone can overcome systems that are designed to solve yesterday's problem and not today's. My core diagnosis is that the system set up to support young people from the world of education into the world of employment is no longer working. In too many cases, it does not just fail to tackle the problem. It reinforces it.

[00:12:51]Whether it is education or health or welfare, that system fails to enable their participation in the labor market. Instead, all too often, it ends up putting young people on a path to a life not in jobs, but on benefits.

[00:13:07]Take education. Good qualifications are still one of the best defenses against a