Government Record on Education, Employment and Welfare

Baroness Cash Excerpts

Thursday 16th July 2026 Lords Chamber

[Baroness Cash (Con)]

My Lords, what an excellent debate—the House at its very best. I have lost count of the number of former Ministers and Cabinet members speaking on their areas of expertise. I thank them all. What is striking is how much we agree on. No one here disagrees with the notion that our children should be lifted out of poverty, that they should realise their potential, that they should have productive and fulfilling lives, and that we want to see our country flourish and thrive. Where we differ is about how we get there.

We will not agree on all that, but there may be some things that we can learn from today. It is the case that the Government inherited record employment, some of the strongest reading and numeracy results in the western world, a narrowing disadvantage gap in our primary schools and an economy back in growth. It would be wrong, however, not to acknowledge the profound and lasting effects of the pandemic on school attendance, mental health and our national working culture and the fact that the Government inherited those challenges also. The question today is whether they have risen to the challenges.

I do not know whether noble Lords are aware of parallel play. It is a phrase used in child psychology to describe how children up to the age of two play next to each other with similar toys but do not actively interact. That is how the Government’s own reviewer, Alan Milburn, has described this Government’s lack of strategy. Perhaps that lack of strategy is itself the consequence of what the Prime Minister’s former chief of staff Morgan McSweeney admitted was a failure to prepare for government. Playing at governing has real-life consequences and it is our young people who pay the highest price.

The problems since July 2024 in the Government’s performance can be traced to the contradictions that lie within so much of what they have done. This could not be more vividly or sadly illustrated than by the way in which they have torn down a cornerstone of their own party’s legacy under Tony Blair. In 2021, England’s 10 year-olds were ranked fourth in the world for reading—the best in the West—and, in mathematics, we had climbed from 27th to 11th. By 2018, the disadvantage gap at the end of primary school was down to 9.2 months, the narrowest ever recorded. That work began under the previous Labour Government, and I pay tribute to the part that the Minister opposite played in that when she was Education Minister in the Blair Government.

When we entered government, we built on those foundations proudly. Policy Exchange research has found that 83% of the highest-performing schools serving disadvantaged children are academies or free schools but, inexplicably, this Government’s Children’s Wellbeing and Schools Act will end that success by returning to the old default of central control, without a shred of evidence of how that will affect outcomes. This Government have said that they want to eliminate the advantage gap—we all do—but then inexplicably undid the very reforms begun by their own party that had helped the most disadvantaged.

What about our young adults? We have heard so much about them today. More than 1 million young people are now outside education, employment or training—it is the first time that we have crossed that line since 2013. Alan Milburn is clear that the causes are complex and the Minister has said the same in this House. I agree, but Milburn’s verdict is still damning. He puts the cost at £125 billion a year and describes the young victims of this chaos as a “lost generation”. Eighty-four per cent of them want to work, yet nearly two-thirds have never held a paid job. In his words,

“The aspiration is there. The opportunity is not”.


Why not? We have heard today from the Benches behind me about the economic consequences of the taxation rises. What have the Government done to opportunity? They have raised the cost of taxation on business and hit the cost of employing young people from three different directions. There are some £25 billion of new costs through the national insurance rise; yes, young people are exempted from national insurance, but the burden carried by those businesses has been stated repeatedly by our public bodies as the reason why they are not hiring young people. It is no good to say that young people are exempt when businesses talk about having to cut all their jobs. A record 16% rise in the minimum wage for 18 to 20 year-olds makes them much more expensive to hire, and excessive new employment rights make taking on an untested young worker a bigger risk for many smaller firms, which they simply cannot afford.

The Government were warned so many times. The IFS warned that the combined changes would reduce opportunities for younger workers. The Bank of England’s chief economist told the Treasury Committee that it would hit those aged 16 to 21 hardest. The Low Pay Commission said that employment would fall most among the young. The Government ploughed ahead, and the result has been brutal. Today, two years after this Government were elected, youth unemployment is close to one in six, at 16.2%—according to the Labour Force Survey, that is the highest in over a decade. The number of NEETs is also tracking upwards, according to Alan Milburn. He says it will reach 1.25 million—another quarter of a million—within five years. The ONS has confirmed that firms are not hiring because of the cost of employment.

Again, we see contradictions at the heart of government, with one department spending public money on the youth scheme that we have heard about today to coax young people into work while others have taken the jobs away. As one of the great heroes of the left, Aneurin Bevan, said, we know what happens to people when they are unemployed. Their skill goes, their hope goes and their self-respect goes. They are an army of the defeated. That army is now 4 million people of working age. One in 10 is on health-related benefits, and more than half of the rise since the pandemic relates to mental health.

Here, again, the Government’s left and right hands do not meet. Their Health Secretary says this country overdiagnoses mental health and writes too many people off—so much so that he commissioned Professor Fonagy to examine the striking rise of diagnosis of anxiety, depression, ADHD and autism. But the welfare system continues to pay out in ever greater numbers on precisely those diagnoses. The state has become quicker to pay for a condition than to treat it.

The science reinforces what Bevan knew. The research warns about excessive labelling. One of the world’s most cited neuroscientists, Lisa Feldman Barrett, shows that the brain learns to expect what we teach it to expect. Label difficult behaviours as fixed incapacity and people believe they are incapable. One part of government says we label too much and another is funding the labelling and calling it support. Milburn describes a welfare gateway that has become a one-way valve, cohorts staying longer and longer, funding the problem but not solving it, and so the vicious circle remains closed. The very taxes raised to fund the welfare bill have destroyed the entry-level jobs that, on the Government’s own evidence, would have kept young people busy and well. The revenue measure has defeated the fiscal aim. Funding more diagnosis defeats the health aim. Each department, as Milburn says, plays alone next to the others, and real young people fall through the gaps between them.

None of this evidence is mine. It is their evidence, their data, their reviewer, their Health Secretary, their own party’s research. They were warned. They were asked to stop but they have carried on, and a generation of young people, our nation’s taxpayers and the British economy are paying the price.