Welfare Reforms and Youth Unemployment

Lord Mohammed of Tinsley Excerpts

Thursday 11th June 2026 Lords Chamber

[Lord Mohammed of Tinsley (LD)]

My Lords, I too thank the noble Lord, Lord Evans, for securing this important debate and all noble Lords for their thoughtful contributions.

As I have listened, I have been struck by how this debate is not merely about stats, forecasts and the Government’s programme. It is about people, particularly young people, and the opportunities that can shape the course of their lives. I know this from experience. In the late 1980s, I was fortunate enough to gain a place on a youth training scheme, a YTS. We all know what they were—£27.50 for 40 hours. Mine was at the Sheffield Co-op at Hillsborough. Like many young people growing up at the time, I entered that labour market during a period of economic uncertainty and high unemployment similar to what young people face today. The opportunity that I received through that programme was not simply about a wage. It gave me confidence, experience, skills and, perhaps most importantly, a sense of purpose and possibility. I often reflect on how different my life might have been had that opportunity not existed for me. The experience has stayed with me throughout my career.

Before I entered your Lordships’ House, I spent many years working with young people in Sheffield who have often been referred to during this debate as NEETs. I often want to change it, get rid of the “N” and replace it with an “L” to say “looking” for employment, looking for training et cetera. When you speak to young people you often hear that they do not like being called a NEET. I met those young people and saw in them a talent that was obvious to everyone except them and the system that was there to support them. I met young people who were struggling with poor mental health, unstable homes, family difficulties or a lack of confidence. I learned that very few young people lack ambition. What many lack is the opportunity, the support and sometimes someone to believe in them.

This is why the figures from the House of Lords Library should concern us all. Almost 1 million young people are, in my view, looking for employment, education or training, while welfare spending continues to rise significantly. We heard from a number of noble Lords, including the noble Lords, Lord Shipley and Lord Austin, about this 25:1 ratio. We are spending 25 times more on welfare than on helping and supporting these young people who are looking for opportunities. It reminds me of my time in local government. We had a term, “invest to save”—invest in now and make savings. I hope that when the Minister responds we look seriously at how we can invest now to save in future. How can we invest in young people’s future now?

For us, the test of welfare reform is not how we can move people off the benefit roll; it is how many people we can help into fulfilling, sustainable employment and support to live independent lives. The most successful welfare systems are not those that simply reduce expenditure but those that invest in people. We have heard from many noble Lords about the example of the Dutch model, which invests a lot more in training in early years in secondary schools. That their NEETs level is less than half of ours means that we should take the opportunity that has been afforded to us by the Milburn review. He has diagnosed the problem; the challenge of the next six months is to see what the possible solutions are.

I hope that we can use energy and expertise from across your Lordships’ House to come together to shape the recommendations of the Milburn review. Rather than waiting for Alan Milburn to come back to both Houses with his recommendations, we should use that time, possibly with a cross-party working group—however you term it, I hope the Minister looks at it favourably—to use our experiences to say what should be in Milburn. We all want to see fewer young people on welfare and more support for them to fulfil their lives because that would be good for society.

The Government are right to recognise that economic inactivity has become a significant challenge to growth. We on these Benches welcome efforts to improve access to employment, training and apprenticeships, as my noble friend Lord Shipley said earlier. However, we remain concerned that some aspects of the welfare reforms focus too heavily on short-term savings while failing to address the underlying causes of inactivity.

As I said, my experience in Sheffield has taught me that many young people who are disconnected from work are facing multiple barriers simultaneously. A young person experiencing anxiety, depression or poor physical health cannot simply be instructed into employment. A young person without qualifications, work experience or a stable support network requires investment and guidance. If we ignore these realities, we risk treating the symptoms, as we heard earlier, while leaving the cause untouched. Milburn warns of a “lost generation”, and it is a warning to us all. Those words should resonate in your Lordships’ House.

When a young person spends years disconnected from education and employment, the consequences, as Milburn said, are often lifelong. Lower earnings, poor health outcomes and reduced economic participation all follow. The costs are personal, social and economic, but I remain optimistic because I have seen what works. I have seen young people flourish when given access to mentoring, skills training and meaningful work experience. I just flag to your Lordships that as university and sixth-form terms come to an end, many young people are seeking opportunities for work experience. I will be taking a number of young people on in July, and I hope that many other Members of your Lordships’ House take the opportunity to give that experience.

I always say to young people, “You’re all going to get GCSEs. Some of you will get A-levels and some of you will get degrees. What else can you get? That is the difference that an employer seeks”. If we in your Lordships’ House can play a very small part in doing that, I urge noble Lords to take up those opportunities that young people welcome. I have badgered my Liberal Democrat colleagues to take on four young people who have approached us.

On that greater investment in young people, I make a plea to the Minister that investment in youth services and community organisations is important because they often engage with young people before the statutory sector gets involved. We need skills and apprenticeship systems that work for every young person, not just those who follow the traditional academic route. We also need employment support that is personalised and supportive. Many disabled young people and those with long-term health conditions want to work, but need flexibility and understanding. The principle behind the Government’s “right to try” approach—that people should test their ability to work without fear of losing support—is sensible, and I welcome it. I hope they can strengthen it further.

The economic argument, as we have heard today from many noble Lords, is compelling. Britain cannot afford to leave the talent of over 1 million young people untapped. At a time when growth remains weak and productivity challenges persist, helping young people into education, training and employment is not simply a social policy but an economic policy, yet beyond the economics lies something even more important. Every young person deserves a chance such as that which I was fortunate to receive, as I said earlier, as a young YTS trainee all those years ago.

Here is one thing that I hope we can build on. I know the Government have tried to reset their relationship with the European Union around Erasmus. When I was in the European Parliament with the noble Lord, Lord Hannan, I was on that committee, and we were looking at expanding Erasmus to include more young people on apprenticeships, not just the academic route. At the time, I argued that if the sons and daughters of hospital cleaners and car mechanics from Hull and elsewhere were working at Siemens, they should also have the opportunity to go abroad, and I really hope that that opportunity continues. Young people deserve that opportunity to discover their talents, contribute to their communities and build a better future for themselves. If we are serious about welfare reforms, we must be equally serious about creating opportunities, as I said earlier. If we are serious about economic growth, we must invest in potential for our young people. If we are serious about building a fairer society, we must also ensure that no young person is written off because they happened to start life on the wrong side of the opportunity.

This is a challenge for us all, and it is one that I hope the Government will continue to address with ambition, compassion and determination.