Welfare Reforms and Youth Unemployment

Lord Storey Excerpts

Thursday 11th June 2026 Lords Chamber

[Lord Storey (LD)]

My Lords, I declare an interest as the patron of Career Connect. I thank the noble Lord, Lord Evans, for initiating this debate and welcome the opportunity to contribute on welfare reform and youth unemployment. Recent analysis from the Health Foundation highlights a significant change in the profile of young people who are not in employment, education or training. A decade ago, around a quarter of these young people reported a work-limiting health condition. Today, that figure is almost a half. Perhaps most strikingly, mental health and neurodevelopmental conditions are now among the principal barriers preventing many young people participating in education and employment.

These findings tell us something important about the challenge we face. Too often, debates about welfare and unemployment focus solely on economic incentives or labour market conditions. Important though these issues are, they tell only part of the story. For a growing number of young people, the challenge is not a lack of aspiration but a struggle with their health and well-being. As someone who spent many years working in schools, I know that these difficulties rarely emerge overnight. The young person who eventually leaves education without qualifications, confidence or a clear pathway into work often showed signs much earlier. The question for policymakers is whether we recognise those signs and provide support before any disadvantage becomes entrenched.

The evidence suggests that employment policy, health policy and welfare policy can no longer be treated as separate conversations. A young person experiencing poor mental health does not encounter these challenges in neat departmental categories. They experience them as barriers to learning, to work and to participation in society. That is why early intervention matters so greatly. Effective mental health support, strong pastoral care in schools and colleges, access to mentoring, high-quality careers advice, and opportunities for training and employment can make the difference for a young person between becoming disconnected from society and fulfilling their potential.

As we have heard from my noble friend Lord Shipley and others, perhaps we could learn lessons from elsewhere. Young people in the Netherlands report anxiety at much the same levels, yet the Dutch NEET rate is less than a third of ours. There, vocational education is prized, not patronised. The Dutch call it the foundation of their economy. Employers are involved from the classroom onwards and, by 19, more than half of Dutch young people have workplace experience. Here it is fewer than one in five. The Resolution Foundation estimates that matching the Dutch rate would mean 600,000 more of our young people earning and learning.

I welcome the youth guarantee, but it is built around claimants. Can the Minister tell us how it will reach the far larger group who are economically inactive and the 314,000 young people who claim nothing and are known to no service at all? Will it be sustained, or will it be another new initiative funded and then quietly wound down? Will the Government give every young person a statutory entitlement to meaningful work experience and face-to-face careers guidance, starting early and reaching those who need it most? Will they go further in rebalancing the apprenticeship levy towards young people entering work, while easing national insurance and business rate burdens on hospitality and high street employers who give so many of them their first job?

We should judge our success not merely by the number of people moved through a system but by the number of young lives put on a path to opportunity. Welfare reform must be about more than managing need; it must be about creating the conditions in which people can thrive. If we can help young people overcome the barriers that prevent them participating fully in education and employment, we will not only improve individual lives but strengthen our communities, reduce inequality and support economic growth. That is an objective which I hope can command support across this House.