Youth Unemployment

Debate between Graham Stuart and Scott Arthur

Wednesday 28th January 2026 Commons Chamber

[Graham Stuart (Beverley and Holderness) (Con)]

It is a pleasure to take part in this debate. How do we, as so many colleagues have asked this afternoon—certainly on the Opposition Benches—persuade an employer? How do we create the incentives for an employer to take a chance on a young person who may have no work experience—they may be full of ambition, fresh ideas and curiosity, but with little or no experience to offer—when that same employer could choose an older candidate who is proven, reliable and familiar with the workplace? If we can answer that question, we will help more than one person; we will help ensure that we provide the door to opportunity for people to have that dignity of work, as my right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) has just talked about.

I have been a Member of Parliament for nearly 21 years, along with the Minister. In that time, she, like me, will have visited hundreds of schools—I certainly have, from Holderness academy to Withernsea high school—and asked thousands of students the same question: “What do you want to be when you leave school?” Not once has a child replied, “Unemployed”, and for good reason. Young people are ambitious. They want the dignity of work, about which my right hon. Friend spoke so passionately just now, over the indignity of welfare. They want to climb a ladder of opportunity, not fall into the trap of dependency. However, as was reflected in the Minister’s speech, study after study tells us the same hard truth. Young people who experience long-term unemployment are more likely to end up poor, sick and more isolated than their peers, with no options and no hope. No way should we be consigning our young people to that fate.

Labour Governments have done this before. I never want to question anyone’s honesty, but some Labour Members have been very selective in the data that they have given. They have talked relentlessly about the 14 years, but not one of them has given youth unemployment figures for those 14 years, which anyone fair-minded would surely do rather than picking some three-year period around covid. The hon. Member for Edinburgh South West (Dr Arthur) did make a fair statistical point. He said, “OK, youth unemployment has gone up under Labour.” He conceded that: how refreshing. However, he also said that it was going up when we came to power and we should deal with that. It was a fair point and a point well made, but in 1997 youth unemployment stood at 14%, and by 2010, under the socialists—the Labour party—it had climbed to 20%.

[Dr Arthur]

Will the hon. Gentleman give way?

[Graham Stuart]

I will make a little more progress, and then I will happily give way. Given that I have referred to the hon. Gentleman, it is the very least I can do.

By 2024, the level had been brought back to below 14%. Again and again, Conservatives have brought youth unemployment down. I have mentioned—as have others, including the Minister—just how damaging it is for young people to be unemployed. It has not just a short-term horrific impact, but a lifelong impact. I do not quite know why that is the case, but study after study shows that it is. Now, less than two years in, the figure is 16% and rising. We have seen this film before, and unless we change course—unless the Government change course—we know how it ends. So how do we change course? I think that Conservative Members have tried to indicate to Opposition Members what the answer might be. I know that Opposition Members lack experience of running businesses—so few of them have ever had to make that huge decision, that risk-filled decision, to employ someone and then to employ more people, having to find the money to pay them at the end of the month as well as paying all the taxes—but the answer is that we do it by changing incentives.

As any good economist knows, the single biggest cost for almost any business is its workforce, yet this Chancellor has chosen to increase the minimum wage and so many other costs on business. In turn, the cost of employing 18 to 20 year-olds—just since July 2024—has risen not by £2,000, not by £3,000, but by a staggering £4,095, in less than two years. If we understand that behaviour is driven by incentives and we make it much more expensive to employ a young person than to employ someone older, what happens?

Well, it is not a surprise: the rate of youth unemployment has gone up. Let me now give way to the hon. Gentleman.

--- Later in debate ---

[Dr Arthur]

I thank the right hon. Gentleman for giving way, and I thank him for reflecting on a longer period than just the last few years. However, if he has been in this place for 21 years he will remember that the level of youth unemployment in 2010, a year to which he referred, was not because we had a socialist Government—although I am a big fan of Gordon Brown—but because we had a global financial crisis. Unemployment was high in the UK, but it was high elsewhere as well. The right hon. Gentleman will also remember that part of his Government’s response to that was austerity. Does he want to reflect on the impact of that on our young people?

[Graham Stuart]

The hon. Gentleman makes a fair and reasonable point, but if he goes back and looks through the data, he will see that youth unemployment stayed stubbornly high under the last quasi-socialist Government, and it was not just because of the 2008 crash. The truth is that, throughout that period, we had a much higher level of youth unemployment than we should have done. He says that we had austerity, but the then Government overspent. We inherited a massive deficit and slowly brought it down throughout the 2010s, but we overspent in each and every year, so the idea that we had austerity is a myth. “Austerity” means living within our means, but we did not live within our means. We overspent each and every year, but by the time we got to covid, we had managed to get our deficit right down. We showed fiscal responsibility, because we know that if Governments spend money that they do not generate, they impose a burden on the very young people on whom unemployment is now being imposed.

I will deal with the minimum wage, which Labour Members have touched on. They asked whether we want to tell young people that they are not worth higher pay. Well, if they do not have the experience, and if they lose out on getting a job against an older person because they do not even have cost competitiveness, they are in trouble. Since the introduction of the development rate in 1998, there has been a lower wage for younger workers. That is deliberate, for a very sensible reason: when young people enter the workplace, they are doing exactly that—they are developing. They are developing skills, confidence, discipline and the ability to work productively alongside more experienced colleagues. Employers were explicitly permitted to pay less in order to reflect an economic reality.