Welfare Reforms and Youth Unemployment

Lord Elliott of Mickle Fell Excerpts

Thursday 11th June 2026 Lords Chamber

[Lord Elliott of Mickle Fell (Con)]

My Lords, it is a huge pleasure to follow my noble friend Lord Hannan, and I thank my noble friend Lord Evans for securing the debate. This is not the first time I have spoken about the million plus young people who are not in education, employment or training. It is a subject I follow closely as president of the Jobs Foundation, as declared in the register.

In his interim report, Sir Alan Milburn rightly said that:

“We are at risk of a lost generation”


of young people. He rightly stated that:

“If public policy aims to increase youth participation, it has to minimise risks and maximise incentives”.


In this vein, I will reiterate a cost-free idea that I first proposed over a year ago, which has now garnered support from other noble Lords, as well as Back-Benchers in the other place and regional mayors. Noble lords will be aware that there is currently a scheme to incentivise employers to hire veterans, which was first introduced in 2020 and has been extended by the current Government to last until at least 2028. The scheme is very simple: employers who hire veterans do not have to pay the employers’ national insurance for that new employee during their first year of employment. This is facilitated through a zero rate of employers’ NI on salaries below roughly £50,000 a year.

In a similar way, employers hiring those under 21 also do not have to pay employers’ NI, a change first introduced in 2015. My hope is that the Government might be willing to consider extending this scheme to those older than 21 who are moving from welfare into work. They might wish to extend it to anyone moving from welfare into work, or they might wish to restrict it to those aged 24 or under, but it is certainly a proposal that would help maximise incentives for employers, as Sir Alan Milburn put it.

When I first mentioned this proposal last year, when we debated the Universal Credit Bill, it was supported only by the Jobs Foundation and the Good Growth Foundation, whose advisory board boasts the noble Lord, Lord Liddle, who I am pleased is in his place. I endorse his call for a cross-party approach on this issue.

Crucially, the Good Growth Foundation estimates that the policy would save the Exchequer up to £1.1 billion every year were it to be adopted for all employees helped from welfare into work. It would surely also save the Exchequer money were it to be restricted to NEETs.

I am pleased to say that support for this proposal has grown over the past year. In your Lordships’ House, the final report of the Autism Act 2009 Committee, published last November, recommended

“the use of tax incentives and/or national insurance relief”

to help businesses employ more autistic people.

The concept has also received backing from Labour Back-Benchers in the other place. Speaking to the Sunday Times a fortnight ago, Labour Back-Bencher Wes Streeting said:

“I think we should be thinking actively about … targeted reduction in employers’ National Insurance”.


I was also pleased to hear one of our great regional mayors, the Mayor of Greater Manchester, Andy Burnham, telling BBC “Newsnight” that he was “sympathetic” to reversing the recent rise in national insurance for employers.

Given that my modest proposal now has growing support on a cross-party basis, I have two questions for the Minister. First, can she confirm that the Milburn review will be allowed to make policy proposals with budgetary implications, including those involving tax incentives? Secondly, can she clarify whether the Treasury will hold back from finalising the Autumn Budget until it has both seen and considered the final recommendations of the Milburn review?

Universal Credit Bill

Lord Elliott of Mickle Fell Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 22nd July 2025 Lords Chamber

[Lord Elliott of Mickle Fell (Con)]

My Lords, it is a huge honour and privilege to be the first to congratulate my noble friend Lady Shawcross-Wolfson on her superb and very moving maiden speech. I am particularly pleased that my noble friend chose a debate on welfare policy to make her debut. Having served in the Department for Work and Pensions as both the chief of staff and a non-executive director, she brings great expertise to this debate. As she reminded us, it is our duty, in our position of privilege, to look out for those less fortunate than ourselves, an obligation expressed beautifully in the speech that we just heard.

My noble friend also brings with her six years’ experience of working in His Majesty’s Treasury. This too is crucial—to policy generally and to welfare policy specifically—because without a growing economy we cannot pay for welfare spending and without a conducive business environment, we cannot create the good jobs that are needed to help people on their journey from welfare to work.

I should also mention my noble friend’s two years as head of the No. 10 Policy Unit. In this capacity, she joins many distinguished Members of your Lordships’ House, including—I am hoping that Wikipedia has not let me down here—the noble Lords, Lord Donoughue and Lord Adonis, the noble Baroness, Lady Hogg, my noble friends Lord Griffiths, Lord Blackwell, Lord O’Shaughnessy and Lord Johnson of Marylebone and, last but certainly not least, the noble Baroness, Lady Cavendish of Little Venice. If the No. 10 Policy Unit alumni do not already have a dining club, I hope that they consider setting one up. We are all lucky to have the pre-eminent brains trust of the country in our midst, including their newest member, my noble friend Lady Shawcross-Wolfson. I offer her many congratulations on a superb maiden speech and our collective thanks in advance for her contributions to this House in the years to come.

Turning to today’s debate, I very much welcome the Government’s aim with this Bill—to get people into work. I was heartened when the Prime Minister said in December, at the launch of the Get Britain Working White Paper:

“Getting Britain back to work is at the heart of my mission to grow the economy”.


This objective is to be applauded. The Government’s Pathways to Work Green Paper in March outlined their plan for getting people into work. This Bill is a key element of that plan in its desire to shift from the current system, which incentivises applicants to maximise health-related benefits.

However, having followed closely the debate on the Bill in the other place, I was disappointed that very few commented on the positive and important role that the business community has to play in getting people from welfare into work. The debate today rightly has delved into a lot of detail about the workings of the benefit system, but the other element of getting people from welfare to work must be the availability of good jobs with appropriate training. The role of the business community as the primary creator and provider of jobs in our economy is therefore paramount. I realise that this point goes slightly beyond the narrow focus of this Bill, but for its overall objective to be achieved it requires the carrot of decent jobs for people to transition to, as the Government’s overall plan recognises.

I will use my remaining time to plant the seed of an idea for a cost-free measure to ensure that there is a carrot of good jobs for people to go to and a carrot for employers to provide these jobs. The proposal is as follows. Noble Lords will be aware there is currently a scheme to incentivise employers to hire veterans, which was introduced by Rishi Sunak in 2020 when he was Chancellor of the Exchequer and extended earlier this year by the Government to run until at least 2026. The scheme is simple. Employers who hire ex-Armed Forces personnel do not have to pay employers’ national insurance contributions during their first year of employment. This is facilitated through a zero rate of employers’ NI on salaries below £50,270 a year. A separate national insurance category is used when submitting payroll reports to HMRC. Similarly, employers hiring those under 21 do not have to pay class 1 national insurance contributions up to the lower earnings limit for these workers. In its submission ahead of the Autumn Budget, I hope that the Department for Work and Pensions might propose extending this scheme or replicating it for those who are moving from welfare into work.

I declare an interest: the proposal was recently suggested by the Jobs Foundation charity, of which I am president, as declared in the register. It was also advocated recently by the Good Growth Foundation, which was founded by and is directed by Praful Nargund, who stood as the Labour candidate for Islington North in the 2024 general election. The Good Growth Foundation is chaired by Tim Allan—who I understand from the Sunday newspapers might soon be joining the Civil Service as a Permanent Secretary—and has on its advisory council the noble Lord, Lord Liddle, whom I see in his place. I hope that he supports the proposal as well. I say this to emphasise and doubly underline that this is not a party-political suggestion but a common-sense suggestion. Even better, it will not cost the Treasury anything. The Good Growth Foundation estimates that the policy would save the Exchequer up to £1.1 billion every year. I am not expecting a commitment from the Minister tonight, but perhaps she might give us her initial thoughts on the proposal at the end of the debate and commit to asking her officials to look into it further.

Returning to where I began, if there is a dining club of former heads of the No. 10 Policy Unit, I hope that they discuss this at their next gathering. It seems to be an eminently sensible suggestion, and anything that encourages employers to help people on welfare into work and saves taxpayers money is surely worth serious consideration by the Treasury to help deliver on the very worthy aims of this Bill.