Welfare Reforms and Youth Unemployment

Lord Liddle Excerpts

Thursday 11th June 2026 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I congratulate the noble Lord, Lord Evans of Rainow, on securing this debate and on the largely non-partisan way in which he explained the problem.

I would love to see cross-party consensus on welfare reform, but if we are to get that, I totally agree with my noble friend Lord Walker that it has to examine the challenge of the ageing society and whether we can continue to support the pension triple lock and all the costs of NHS and social care, which, if we are not careful, produce great generational inequality in Britain. Something has to be done to address that.

On the Milburn report, first, I would like to say that it is brilliant. The way in which Alan Milburn and Pat McFadden are going about trying to get positive change in this policy area is an example that the rest of our Government here should follow. They are making a really powerful argument for change with compelling clarity, and we want more of this from our Government. They also make it clear that there are no simplistic solutions to this problem. I agree with Tony Blair that the Government made a mistake in putting up national insurance as a way of raising taxes—we should have done something else—particularly in lowering the threshold at which national insurance is paid, which hit low-paid starter jobs particularly hard. However, changing that is not going to change what is a very complex problem, as the Milburn report has outlined.

Part of this is a classic story of social exclusion, and the Government are doing a lot through Early Years to try to get more children school ready by five. The report demonstrates that it is children who are not school ready at five who are much more likely to be jobless at 18. We are doing good work there. There is also a problem of poor school attendance among the less able children. This is a question of education reform, as the noble Lord, Lord Baker, explained to us; we have to be better not just at training kids to pass exams but at giving them skills. The system is not well organised for that. However, it is a much bigger problem than social exclusion. After all, 30% of NEETs have good GCSEs, 20.1% have level 3 qualifications, and 15% have a degree, so it is not just a problem of social exclusion.

The most interesting part of the report, which was new to me, was the changing nature of the labour market and how the supply of entry jobs has gone down. This has not happened under the Labour Government in the last two years; it is much more of a long-term trend. We remember Norman Tebbit saying that you had to get on your bike to find a job. Nowadays, Milburn tells the rather pitiful story of young people who make hundreds of applications by email and typically do not even get an acknowledgement. So that is an issue.

We have to have more incentives for employers to provide apprenticeships, which have fallen by 35% since 2019. What the Government are doing there is right. We have to have an extended job guarantee, as we had in the early 1980s through the Manpower Services Commission. There are lots of ideas that need to be explored. This is one of the great social challenges of our time, and we must address it.