Government Record on Education, Employment and Welfare

Baroness Shephard of Northwold Excerpts

Thursday 16th July 2026 Lords Chamber

[Baroness Shephard of Northwold (Con)]

My Lords, I congratulate my noble friend Lady Evans on her excellent introduction to this important debate, and it is a pleasure to follow the right reverend Prelate the Bishop of Newcastle.

I will concentrate on NEETs: that is, young people who leave school without entering sixth form or FE, employment or training. They are at the centre of Alan Milburn’s interim report on Young People and Work, which reveals very bleak prospects for NEETs. There are nearly a million of these young people—that is, one in eight of our school leavers—and the numbers are rising. Nearly 60% of them are economically inactive, which means they are detached from the labour market and not looking for work. The Milburn report describes this as a “moral crisis” with “economic consequences”. The economic consequences are that the annual cost to the taxpayer for the present numbers is £125 billion. All other EU countries, apart from Romania, are doing better than us on this issue, and, alarmingly, over the past decade, the number of NEETs citing health problems has risen by 70%, four out of 10 citing mental health problems.

I accept that the position has developed under successive Governments. We now have the aftermath of Covid, war, and a volatile world. We need economic growth. I can do no better than quote the noble Lord, Lord Walker of Broxton—I think he is not in his place today—who said in the welfare debate on 11 June that

“we will cure the problem”

of NEETs

“only by growing the economy … the Government need to be more business friendly. It is only business that creates wealth and jobs and pays tax”.—[Official Report, 11/6/26; col. 1443.]

He is of course right. Employers are key players for NEETs. They provide entry and part-time jobs in retail, hospitality and hairdressing. How many people here started off in that way? I certainly did. They also support apprenticeships. However, those functions, for which we depend on business, have been made well-nigh impossible for many employers by the Government’s imposition on them of higher national insurance costs—which have already been mentioned—increases in the national minimum wage, higher business rates and heavier regulation.

In the past, local government also was a key partner in helping to equip school leavers for the world of work. But, sadly, the Government are creating yet another barrier to the improvement of NEETs’ prospects by the chaos they are currently imposing on that sector, with uncertainty, delay and confusion surrounding its structure and its functions. Nor can there now be any sensible planning because we are told that the new Prime Minister is intent on creating a new regionalised structure on top of, or maybe instead of—we are currently not to know—the structures that we have, which means that any kind of sensible planning that is taking place will be ended by the uncertainty that the Government are imposing on the entire thing. However, of course time does not stop for the NEETs. They need urgent help to get on with their lives.

The Minister in the last debate on 11 June outlined a number of measures to be useful, and indeed many of them were. But, actually, the Government need not to introduce limited measures but to tackle the fundamental issues I have described. I look forward to hearing the Minister’s response at the end of the debate.