Youth Unemployment
Pat McFadden Excerpts(1 week, 1 day ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
I would like to make a statement on our new package of support to tackle the long-term problem of youth unemployment. Let me begin by wishing you, Madam Deputy Speaker, and the whole House a very happy St Patrick’s day. This year, due to Lenten abstinence, I will toast it with Guinness zero—one of the world’s great inventions.
The UK has historically high levels of employment overall. In its most recent report, the Office for Budget Responsibility said that employment would rise in every year of the forecast from 2026, and that unemployment would peak this year and fall in every year of the forecast after that. In fact, in only two of the last 150 peacetime years was the employment rate higher than it was in 2025. However, a particular and long-term issue faces the young, and it is time that young people were offered more hope and opportunity. That is what the package that we are bringing forward will do.
At almost 1 million, the number of young people not in education, employment or training is much too high. The Conservatives try to claim that that is all a result of decisions taken over the past two years—
Pat McFadden
In fact, we can hear them claiming it right now. But the truth is that the number of young people not in education, employment or training rose by 250,000 in the three years running up to the last election, and the Conservatives did precisely nothing about it. Youth unemployment has been rising since 2022, and youth employment never reached pre financial crash levels in any single year of the Conservatives’ 14 years in power. On top of that, the Conservatives kicked away the ladder of opportunity from young people when they presided over a shocking 40% fall in youth apprenticeship starts over the past decade.
The problem is long term and deep rooted. We will back young people with more youth apprenticeships, more chance of getting a job, and more help in overcoming the challenges they face. We have already announced a youth guarantee to help the young unemployed. It involves intensive work coaching, 300,000 work experience and training places, and subsidised work for long-term unemployed people aged 18 to 21. However, we will now go much further, with an explicitly pro young people package, aimed at helping them to learn and earn. From this summer, we will introduce hiring bonuses for businesses that hire a young person who has been out of work for six months. The bonus will be worth £3,000 per young person. There will also be bonuses of £2,000 for small and medium-sized businesses that hire young apprentices. Both bonuses can be combined if the young person hired has been out of work for six months or more. What a contrast with the Conservatives’ record on apprenticeships, which was to take opportunity away from young people—[Interruption.] They don’t like to hear it, but I am going to continue!
We are introducing new foundation apprenticeships in retail and hospitality, and new short courses in AI, electric vehicle charging point installation, electrical fitting and assembly, mechanical fitting and assembly, modular building, solar photovoltaic installation, and welding—the skills that young people need for the future. On top of that, the jobs guarantee, which we previously announced for the long-term unemployed, will be extended to those aged 22 to 24. Those young people will get six months of paid work, at 25 hours per week paid on minimum wage rates. Altogether, this will create 200,000 job and apprenticeship opportunities over the next three years.
This is our new deal for new times, offering new hope to the young people who are so often disparaged by the Conservatives as shirkers and scroungers. Our message is different: “We back you, we believe in you and we want you to succeed.” The package that I have announced is new investment of about £1 billion, and it comes on top of the funding that we announced at the Budget. Taken together, it is a package of support for young people worth about £2.5 billion. The existing exemption from employer national insurance contributions for workers under 21 will stay in place. This package is not just pro young people; it is pro business. I welcome the comments by the Federation of Small Businesses, which said that the provision is a “game-changer” and “a decisive step forward”, and rightly describes the package as “pro-jobs, pro-opportunities”. The package has also been welcomed by large employers such as Amazon, Kier Group and PwC, and the welcome goes beyond business. We know that a lot of young people face challenges in the labour market, and the chief executive of Mental Health UK, Brian Dow, said that the package
“will support young people to be ready for work and help organisations large and small to capitalise on the skills, talents and enthusiasm that young people have to offer.”
As well as the package, there is an urgent need to offer help to young people, given technological and demographic change. They need our help, and we cannot afford to lose their talent and energy. This is about not just young people, but their parents and grandparents. This is a generational challenge, because who does not want their child or grandchild to have a better chance in life? That is why investment in the young is a bond between the generations. It is an act of solidarity that is in the interests of the whole country, because if a young person has prolonged periods out of work, the scarring effects can stay with them for the rest of their life. A young person under the age of 25 on the health element of universal credit is now less likely to get a job than someone over 55 on the same benefit. We have to act to change that.
I am often asked, “So when will you do welfare reform?” Well, I tell the House that this is welfare reform. Putting work and opportunity at the heart of our system is the best reform we can make. Asking not just, “What are you entitled to?” but “How can we help you change your life?” is the change that the system needs. That view lies behind the changes that I am announcing in this package. I commend the statement to the House.
Madam Deputy Speaker (Caroline Nokes)
I call the shadow Secretary of State.
Helen Whately (Faversham and Mid Kent) (Con)
The Government have lost control of welfare. The benefits bill is ballooning. Sickness benefits alone will cost us £109 billion by the end of the decade. Working-age benefits are costing £161 billion right now and rising. But instead of bringing forward welfare savings, Labour MPs have chosen to spend ever more on benefits. Just the other day, they backed an extra £3 billion spending on scrapping the two-child benefit cap. It is all paid for in the same way—by taxpayers, by hard-working people, and by the businesses that employ them.
First the Government tax jobs, and then they wonder why there are fewer of them. Let me tell them: if you tax it, you get less of it. Under Labour, unemployment has gone up month after month. Our youth unemployment now rivals that of Greece, at over 16%. That is one in six young people out of work, wanting employment but denied the chance—and a university degree will not save them, either. Some 700,000 graduates are out of work, and nearly 1 million young people are not in education, employment or training. So many young people have done everything asked of them. They have studied hard, done their exams and got their grades, but now they are getting rejection after rejection to their job applications.
The Government are letting down a whole generation, and the Secretary of State knows it. He said so himself this week on the radio. He talked about the “scarring effects” of youth unemployment: worse mental health, worse outcomes and even lower life expectancy. He is right, so why are his Government making things so much worse? Let us be clear about what this new policy is. It is not a jobs plan or a serious new deal for young people; it is a sticking-plaster, and an expensive one costing over £1 billion. These are state-subsidised jobs to replace the real ones that Labour has killed.
The Secretary of State has laid into our record on apprenticeships, but he knows perfectly well that the drop he refers to happened because we raised the standard of apprenticeships to make them a qualification that would actually count, and to make them a meaningful alternative to university, not just a way for businesses to get cheaper workers. I warn him not to just chase higher numbers in his reforms; quality matters. And why are the Government doing nothing about dead-end degrees and mounting student debt? Why not adopt the policy we have announced of cutting back on low-value degrees, and using the saving to increase apprenticeships? This Government’s answer is to just go back, cap in hand, to the taxpayer.
At the end of his statement, the Secretary of State talked about welfare reform, but why do we never hear the important word “savings”? I think we know why. The Government tried and failed to make welfare savings last summer. What has changed since then? The Prime Minister is only weaker and more indecisive, though the problem becomes ever more urgent. Today’s personal independence payment figures show that claims are up again. There are over 300,000 more people on PIP since Labour took over—a rise of 9%—and the number of young people claiming PIP has risen by 14%. There are nearly 150,000 more people claiming benefits for mental ill health and neurodiversity. I have been clear: this cannot go on. Benefits are not the right answer. Work is better for us. People who can work should work.
The Secretary of State needs to answer some questions. Where exactly has the extra £1 billion that he has just announced for state-funded jobs come from? Will this latest plan actually bring down youth unemployment? Will it even touch the sides? How will he stop fraudulent claims for the cash? How will he make sure that no one loses their job because of his cash handouts? How will he make sure that all this spending makes a difference, and that he is not subsidising employment that would have happened anyway? Does he accept that taxing jobs on the one hand and subsidising them on the other is not an economic strategy, but the economics of the madhouse? Finally, can the Secretary of State at least agree that the benefits bill needs to come down? Perhaps he could take this chance to use the word “savings”. Does he see the irony? Does he understand my feeling of déjà vu? This is another plan from his party for welfare reform that spends more money, rather than saving it. When will he bring forward a plan to actually bring down the benefits bill? He talks about welfare reform; is this it?
Pat McFadden
I fear that the hon. Lady’s response was written without her listening to a word in the statement. She has confirmed that the Conservative party not only bequeathed us the problem, but has learned nothing about how to tackle it. There was no statement of responsibility, no statement of regret and no apology for the record on youth apprenticeships—in fact, she defended cutting youth apprenticeship starts. It is a continued pretence that somehow all of this started just two years ago.
The hon. Lady asks where the funding to help young people comes from. It comes from stable management of the economy—something that the Conservatives know nothing about and that we have practised for the past two years. Young people, at whom all of this is aimed, will have heard her disparage efforts to get them into work and to give them more opportunity. They will have heard her dismiss our changes, which will boost youth apprenticeships. They will have heard her pretend that we can somehow wish all this away with tax changes. That proves that the Conservatives have learned nothing from their disastrous management of the economy. They will have heard her say that the package does not offer young people anything, when we have announced a plan to give them a new deal with more jobs and more apprenticeships. That is the difference between our approach and theirs.
I want to give young people in this country opportunities to get skills, to get a job, to get off benefits and to build a better life for themselves. That is much better than kicking the ladder away and leaving the system unchanged, which is what the Conservatives did. How does the hon. Lady explain the number of NEETs rising by a quarter of a million in the last three years in which they were in power? How does she explain their lack of action to deal with it? When it comes to welfare, what I have said today is very clear and simple: the best means of welfare reform is to put work and opportunity at the heart of the system, and that is what we are doing with this plan.
David Baines (St Helens North) (Lab)
Young people are often unfairly criticised, but it is worth remembering that the vast majority of them are in employment, education or training. Those who are not deserve our support, and to be provided with opportunity, not the condemnation and ignorance that was all they got from the Conservatives in government, and all we have heard from them today. Does the Secretary of State agree with me that the number of young people not in employment, education or training is a scandal, and that it demands action? Will he set out how this new investment will support young people in St Helens North and across the country?
Pat McFadden
My hon. Friend says that young people deserve support; I believe that with the right support, young people want to work and to make the most of their life. He asked how people in his constituency would be helped. They could be helped through the hiring incentives that I have announced, and through the hiring bonuses that will allow small and medium-sized businesses to hire a young apprentice. The young unemployed in his constituency will be helped, because we are offering hope, ensuring that they get a chance, and offering the sense of pride, purpose and dignity that comes with having a job.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Steve Darling (Torbay) (LD)
The Secretary of State is correct to suggest that the Government inherited a crisis around youth unemployment. However, by introducing the hikes in national insurance contributions, the Government made that crisis into a catastrophe for young people, and supercharged the pressure on our youth across the United Kingdom. Rather than tackling what is now the root of the problem—the NIC hikes—these proposals are just papering over the cracks.
Young people’s childhoods are massively different from those that many of us experienced, especially hon. Members who grew up some years ago, so I pay tribute to the organisations that get young people to the right place, including Eat That Frog, Doorstep Arts, Sound Communities and South Devon college, who do incredible work. They help young people who have come through the pandemic, those who feel as though they are in a pressure cooker because of social media, which is gnawing away at their life, and who face a cost of living crisis.
The Liberal Democrats are concerned about an element of the Government’s policy: we do not understand why the Government are removing funding for apprenticeships for management. Surely managers are the people who support young people in their hour of need, as they go into work. Young people aspire to move into those positions eventually, so will the Secretary of State think again about the impact of the national insurance contributions hike on hospitality, retail and tourism industries in areas like Torbay?
I was interested to hear the Secretary of State speaking on the “Today” programme on Monday. The presenter challenged him by suggesting that the NIC hike had jacked up youth unemployment, and the Secretary of State appeared to agree with that. Finally, an article in The Times suggested that the Government are thinking about making young people second-class citizens through their changes to disability benefits; I would welcome comments from the Secretary of State about that.
Pat McFadden
The hon. Gentleman opposes the changes that we made to national insurance, but he neglects to mention that employer national insurance contributions are not required for employees under the age of 21, unless they are earning more than £50,000 a year. He opposes those changes while supporting extra expenditure on the NHS. As I have said to him a few times, if his party supports extra expenditure, it really has to support revenue-raising measures to fund it.
Young people will have heard the hon. Gentleman dismiss the changes that I have set out today; in fact, they will have heard him say that if he was asked to choose between management courses and young people, he would choose management courses—that is now the established position of the Liberal Democrats. I think that many people would be surprised to hear that in some years, most apprenticeship expenditure has gone on those over the age of 25 who are already in work. We have made a choice; we have chosen young people, and for good reasons. We have chosen them because of the scarring effects of youth unemployment, which I mentioned in my statement, and we now have on record that both the Conservative party and the Liberal Democrats are opposed to our prioritisation of young people.
Rushanara Ali (Bethnal Green and Stepney) (Lab)
I welcome this excellent initiative, with the backing of £2.5 billion of investment, and I commend the Secretary of State on trying to get a grip on the scourge of youth unemployment. We saw a generation lost during the previous Government because of the failure to support young people. What will the Secretary of State do to support disabled young people? The backlog and delays in the Access to Work programme are a real issue. Will he say more about what charities and social enterprises can do, and how they will be supported, in addition to the public sector, to get more young people who are NEET into work?
Pat McFadden
My hon. Friend asks about disabled young people. It is really important that we get more help and support to disabled people who, in the past, were too often signed off, written off and forgotten about. That is not good enough for them or for the country as a whole. The Connect to Work programme, which is devolved to elected mayors and local authorities, is helping disabled people, and the WorkWell programme seeks to get over the divide between health advice and employment advice. She is right that there are issues with the Access to Work programme. It is a really good programme, but there is a backlog that I want to see reduced because it is an important programme that helps disabled people to get into work and stay in work.
Joy Morrissey (Beaconsfield) (Con)
The national insurance tax rise and the upcoming implementation of the Employment Rights Act 2025 are just two of the reasons why businesses are on their knees. I welcome the Government’s youth guarantee, but how can the Government guarantee jobs when there will not be any businesses to offer those jobs?
Pat McFadden
I welcome the hon. Lady’s welcome of the youth guarantee. Perhaps she might have a word with her hon. Friend the shadow Minister, who did not welcome it. She asks about national insurance, but the problem is not new—what is new is the package of help for young people that I have announced today.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests. As co-chair of the all-party parliamentary group for youth employment, I welcome the Secretary of State’s statement on these new measures. Members will know that Newcastle is home to the country’s best retail and hospitality offer, and I know many businesses will welcome the support for employing young people. Will the Secretary of State set out how his Department is working to ensure the balance between fairness in the administrative processes do not create any burden for small and medium-sized businesses to access the support?
Pat McFadden
I welcome my hon. Friend’s question and her praise for the great city of Newcastle, which I am sure we would all echo. On small and medium-sized businesses, she is right that we need to ensure that the systems are as easy to use as possible. There is a real direction of help in the package to small and medium-sized businesses, particularly with the hiring bonus for young apprentices. That is perhaps why the Federation of Small Businesses has described this programme as a “game changer” and a “decisive step forward.”
Mr Peter Bedford (Mid Leicestershire) (Con)
This is a socialist economic statement. If it moves, the Government tax it; if it keeps moving, they regulate it; and if it stops moving, they subsidise it. Will the Secretary of State accept that his national insurance rises, the changes to business rates and the “unemployment” rights Act have contributed to the hostile environment to employing young people?
Pat McFadden
I am not sure whether the hon. Gentleman’s description of this statement will do me good or harm among my right hon. and hon. Friends, but once again he makes the mistake of assuming that this problem is something that happened only in the last 18 months, which is where the Conservative party is going wrong. It is a long-term and deep-rooted problem. We need a different approach to tackle it, and that is why we need to offer hiring bonuses to businesses and to redirect the apprenticeship system to help young people, precisely because of the long-term scarring effects of young people being out of a job for any length of time. That can mean worse mental and physical health and, in some cases, even lower life expectancy than their peers in work. We have brought forward this package of measures today because of our concerns about that.
Oliver Ryan (Burnley) (Lab/Co-op)
I am glad to hear that the employer NI exemption for staff under the age of 21 is staying in place. The new £3,000 hiring bonus for businesses taking on young people will make a real difference. How will the Secretary of State ensure that it is taken up by businesses and young people in Burnley, Padiham and Brierfield? Does he agree that the 40% drop in youth apprenticeships that we saw under the 14 years of the Tories left 1 million young people as NEETs and many without the opportunities and life expectations that they deserved?
Pat McFadden
We heard the Conservatives defend the 40% figure on the drop in youth apprenticeship starts—that is on the record. If they want to defend and own that record, so be it, but we want to prioritise opportunities for young people, and that is what we are doing with this package. There is a lot in it for employers in Burnley and for small and medium-sized businesses, which now have a new financial incentive to give a young person the vital start in life that can set them on a path of pride, purpose and dignity. That is what having a job gives you.
John Milne (Horsham) (LD)
The Government want to cut funding for level 7 apprenticeships and redirect resources to younger groups, but bodies such as the Royal Institute of British Architects tell me that young people are unlikely to enter professional training in the construction sector, because funding will be withdrawn at the later, more expensive stages of their training pipeline. Does the Secretary of State accept that a one-size-fits-all, generalised cut-off point for 22-year-olds just does not work for industries that have a longer training period?
Pat McFadden
Once again, the Liberal Democrats speak against the prioritisation of youth. We are for training throughout the system and throughout the age range, but we have to make a decision about where to prioritise it with a public budget. I have unashamedly made the decision to prioritise young people, and I think that is the right thing to do.
Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
Happy St Patrick’s day to the House and to all across the country.
The Secretary of State is absolutely to committed to this agenda, and that comes across in not just his words, but the action that has been announced today. May I highlight the vacancy period for apprenticeships? Only 16% of vacancies in England are advertised in the two months when young people are leaving school and going into the summer break. That means that many are waiting for months and months to even get the opportunity to apply for an apprenticeship, and that is contributing to the NEET figures that he cares about so passionately. Can we at least address that issue in the public sector so that most apprenticeships are advertised when young people are finishing their exams and leaving school?
Pat McFadden
Let me return the greeting of a happy St Patrick’s day to my hon. Friend.
My hon. Friend makes an absolutely vital point about information. When I talk to young people, they tell me that when they are at school, there is a lot of information about how to apply for a university course. That is great, and it is a great route for young people, but the information on how to apply for an apprenticeship is not as clear; it is not readily available to them or as much a part of the preparation process that many schools put young people through. There is a job of work to be done on information, because we want the clearest, most user-friendly information possible to be available to young people and their parents when making such a vital decision about their future.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I have known the Secretary of State for a long time, and I have a lot of respect for him and for the position that he is in. The key thing here, as I observe it, is that one of the big problems is the competition between younger people with no experience and older people. He is focusing on younger people. One of the things that we learned the hard way on this matter is that we also have to do something that moves older people through the system faster. We put up the Work programme at the time, which did not cost the Government any money, because it was based on payment by results. May I suggest that when the Secretary of State goes back to the Department and has a look at that, he is focused on the longer-term older people and moving them through jobs?
The second point is on the criticism of national insurance. I recognise that this is not the Secretary of State’s decision; it comes from the Treasury—he will have endless disputes with the Treasury. The threshold does not apply to those under the age of 21, but lowering that threshold puts a block in the system, because the risks to those who want to hire younger people are at the same time blocking older people from coming into work for the same reason. May I suggest that he says, “Let’s do a proper set-up so that we understand this issue”? We have to get older people and younger people into work, not just the younger people.
Pat McFadden
I have a lot of respect for the right hon. Gentleman; I walk past his picture every morning. He was responsible for a major reform to the welfare system with the introduction of universal credit, but after that his party stopped reforming the system. We are seeing the costs of that, particularly with what has happened in the last few years.
On the Work programme, I am happy to look at any successful programme to help people into work. We have more than one of these programmes in the Department, and they should all be evaluated. The right hon. Gentleman makes an important point; we need to get support to people to overcome the barriers to get into work. With regard to national insurance, as I have said, all these things are costs for business, but this is not a new problem. This is a deep-rooted, long-term problem, and we need new answers to it. That is why I have brought forward this package today.
Rosie Wrighting (Kettering) (Lab)
My generation has faced deep generational inequalities over the last decade. That did not happen by accident; it was the result of years of decision making in which the Conservatives chose austerity over investment into future generations. Nowhere is that clearer than in the fact that one in eight young people are not in education, employment or work—a generation lost. What steps is the Secretary of State taking to ensure that his Department and the Government are hearing directly from young people so that we can fully understand the barriers they face when entering work?
Pat McFadden
My hon. Friend is right. That ratio of 1:8 is too high, and it grew a lot in the last few years. She asks about discussions with young people, and she makes a really important point. When I talk to young people, they tell me that they want to work and make the most of themselves; they just need a platform that will help them. In every part of the programme that we have brought forward today, whether it is the apprenticeship changes, the help for the long-term unemployed, the short apprenticeship courses or the hiring bonus, the motivation that I have had is to give young people a platform on which to stand and take the next step in their lives.
Adam Dance (Yeovil) (LD)
People with special educational needs and disabilities are more likely not to be in employment or training. It is great that the new apprenticeship incentives will include recruitment for 19 to 24-year-olds with education, health and care plans, but a majority of people with SEND leave school without one. Will the Secretary of State set out what specialised support will be on offer to young people with SEND without EHCPs who are looking for work or apprenticeships, as well as what new guidance employers will get?
Pat McFadden
The hon. Member raises an important point. The issue of youth inactivity does not start at the age of 16; it often starts well before that. The reforms to the SEND system announced by my right hon. Friend the Secretary of State for Education very recently are really important in that regard, and we want the maximum opportunity for people. The last thing that we want is for people with special educational needs to be written off from the labour market; there has been too much of that in the past. Part of the package that I have outlined today is not about helping people into work then forgetting about them, but about supporting them once they are in a job so that we can get job retention and give young people the maximum chance of success.
Dan Carden (Liverpool Walton) (Lab)
The number of young people not in education, employment or training hitting 1 million follows a trajectory that has been ongoing for a long time and is a global phenomenon. I am delighted that the Secretary of State has today said that a Labour Government are determined to intervene and do something about it. How does he plan to measure the success of this scheme, and how does he think the Government and our education and work systems need to be more agile, given the onset of artificial intelligence technology?
Pat McFadden
I thank my hon. Friend for his question—I know that he takes a deep interest in this issue. There is an urgent need to help young people with the technological change that is taking place in the labour market. That is not just a British phenomenon; graduate unemployment in the United States went up from 5.3% to 5.7% in the final quarter of last year, and youth unemployment in the United States reached a four-year high last summer. We have to be less insular in our debate and understand that young people face particular challenges. That is why, for example, the different apprenticeship courses that I outlined in my statement are really important. They will train young people to cope with a different technological environment and ensure that we give them the maximum chance of success.
Simon Hoare (North Dorset) (Con)
It frankly beggars belief that the Secretary of State does not understand the impact that the Government’s policies on business, tax and regulation have had on the confidence of businesses up and down the country to invest and employ. There is a direct causal link, and nobody will understand why the Secretary of State does not make that link and persuade the Treasury to do something about it. However, my direct question to him is this: why does he think that unemployment is always higher at the end of a Labour Government?
Pat McFadden
The OBR predicts that unemployment will peak this year and then fall in every year of the forecast—[Interruption.] Conservative Members disparage the forecast, but I gently remind them that disparaging the OBR did not work out too well for them a few years ago. In fact—to make a more serious point—the country is still paying the price for the fact that they did so, so I suggest that they learn that lesson.
Andrew Pakes (Peterborough) (Lab/Co-op)
I thank my right hon. Friend for the care and consideration he has shown in putting this package together. I am delighted today to be joined in the House by some inspiring apprentices from Caterpillar in my constituency, who have been talking about their experiences of moving into work. This matters in Peterborough, because we have one of the highest levels of youth unemployment for a generation, and it needs tackling. Can my right hon. Friend assure me that the work we are doing will not just benefit large employers such as Caterpillar, but put in place opportunities in the supply chain for small and medium-sized enterprises, so the brilliance of the apprenticeships we have at Caterpillar is extended to more and more young people in Peterborough?
Pat McFadden
I thank my hon. Friend for his deep interest in this issue. I have visited his constituency, and I give a warm welcome to the apprentices from Peterborough who are in the Chamber today. He asked about supply chains and small and medium-sized businesses. Those businesses will benefit from the hiring bonus for a young apprentice, which is why the Federation of Small Businesses has welcomed this package, describing it as a “game changer” and a “decisive step forward”.
Wendy Morton (Aldridge-Brownhills) (Con)
For this scheme to work, we need vacancies for young people, yet we have a Government who are squeezing the very businesses that are needed to create opportunities and jobs for young people through business rates, energy costs and national insurance increases. The result, sadly, is that businesses up and down the country are going bust and unemployment is going up. I urge the Secretary of State, rather than apply an expensive sticking-plaster to this problem, to speak with the Chancellor and ask her to reverse the jobs tax.
Pat McFadden
I warmly welcome the Chancellor’s support for this package and the help that she has given me in putting it together. The right hon. Lady mentioned vacancies—there are about 700,000 vacancies in the economy, including 50,000 in manufacturing. I attended a jobs fair in Blackpool a couple of weeks ago, where almost 1,000 jobs were allocated on the day. There are vacancies in the economy, but we have to help young people to be in a position to be trained and have the confidence, skills and support they need to take them up.
Catherine Atkinson (Derby North) (Lab)
Having seen the 40% fall in youth apprenticeships over the past decade and the long-term trend of increasing numbers of young people not in education, employment or training, I welcome the fact that this Labour Government are enabling more apprenticeships and opportunities for young people. Derby is a city of makers with a highly skilled workforce, but we need to train up the next generation, so can the Secretary of State tell us more about how this Government will work in partnership with businesses, including SMEs, to provide opportunities to young people, so that we can benefit from their talents?
Pat McFadden
Let me praise the magnificent industries in the Derby area, many of them manufacturing companies. As I said, there are 50,000 vacancies in manufacturing right now. What the trade bodies tell me is that they need help with skilling young people to take up those vacancies. That is precisely what will be made easier by the package that we have brought forward today.
Kirsty Blackman (Aberdeen North) (SNP)
I am not interested in discussing how we got to this point; we all need to work together to ensure that young people can get the opportunities they deserve and that those opportunities are available to them. I have read the Secretary of State’s statement from Monday, I have read the press release, and I have read and listened to today’s statement. There are some gaps about exactly how the timelines will work and what the legislative process for putting the package in place will be. Will he give us an assurance that the House will get this information at the earliest opportunity, so that we can work together to ensure that young people will have the opportunities that he is hoping they will get?
Pat McFadden
The rate of young people not in education, employment or training is, I believe, even higher in Scotland than it is in the UK as a whole. The hon. Member asks for more information on timescales. The hiring bonuses, for example, will be introduced from this summer, and the apprenticeship changes will be introduced from later this year.
Chris Webb (Blackpool South) (Lab)
I start by thanking my right hon. Friend for joining me at my jobs fair a few weeks ago, where more than 1,100 people secured work on the day. Some 900 are already in those jobs, working in our economy. That is Labour in action. I have spoken many times in this House about the need to support the hospitality and tourism industries, especially in coastal communities such as Blackpool, so that they can hire more young people and give them that opportunity. I got my first job at age 14, on Blackpool seafront. It was a great job that helped me get countless more jobs in hospitality. We need more young people to have access to those jobs. Does my right hon. Friend agree with me, Blackpool businesses and the Federation of Small Businesses that this plan is a game changer in tackling youth unemployment in Blackpool and other coastal communities across the country?
Pat McFadden
I thank my hon. Friend for the enormous amount of work that he put into organising the successful Blackpool jobs fair, which I attended a few weeks ago. He is right that the evidence from that jobs fair is that the vacancies are there, with more than 1,000 jobs allocated on the day of the jobs fair itself. Hospitality is a great entry route for young people. We have announced a foundation apprenticeship in hospitality as part of this process, and I hope that extends opportunity to other young people, similar to the opportunities that he had when he was a young man.
John Glen (Salisbury) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests. I share the concern of many on the Opposition Benches about the national insurance increase, but I am particularly concerned by what is happening with graduate unemployment, which we have seen increase by 46% over the past six years. I draw the Secretary of State’s attention to the work of upReach, a charity that I have been involved in over the past few years. It is a social mobility charity that offers workshops, work experience and career coaching to young people. Will he engage with organisations such as upReach and Nick Bent, the excellent CEO who runs it, to see what lessons can be learned? In a world where AI is already taking many graduate jobs, it is concerning that the trend will only accelerate further.
Pat McFadden
As the right hon. Member knows, I have great respect for him. I am happy to reach out to upReach to speak about the work to which he refers. As I said a moment ago in response to another question, graduate unemployment is an international issue, not just one for the UK. There has also been an uplift in the United States, which we think of as possibly among the most dynamic economies in the world. Precisely because there is technological change, we need to help young people and support them through it. Policy has to catch up with the discussion taking place among young people themselves, because they are very alive to this issue, and they are evaluating their employment choices in terms of what they think will happen in the labour market and which jobs will be sustainable through this period of significant technological change.
Sarah Smith (Hyndburn) (Lab)
Before being elected to this place, I spent many years working for charities seeking to tackle the challenge of youth unemployment. I remember fondly the future jobs fund, which, under the last Labour Government, delivered real change for people across the country. I have established the Get Hyndburn Working group to help tackle the challenge of economic inactivity in my constituency. It would be helpful if the Secretary of State could outline how what he has announced today will support that group in its endeavour to see young and, of course, older people secure good employment. Will he also—as he develops further strategies in this regard—pay particular attention to the importance of place and locally-led decision making, in order to tackle the specific challenges experienced in different parts of the country as we seek to get everyone into a good job?
Pat McFadden
I thank my hon. Friend for drawing attention to the record of the last Labour Government. I have described this as a new deal for new times, and it does adapt some of the lessons that we have learnt in the past to today’s very changed labour market. She mentioned the importance of locally-led work. It is true that local labour markets differ, and I want to work closely with local authorities and elected mayors on this agenda, because I think that they all want the best for the young people in their area. The Connect to Work budget, for example, is devolved for the next few years, with considerable flexibility for local leaders in relation to how they use the funding.
Ann Davies (Caerfyrddin) (PC)
Measures to support about 17% of our young people in Wales who are not in education, employment or training to gain employment are welcome, although I prefer to use the term “LEET”—looking for education, employment or training—which I think is a much more positive way of viewing our young people. However, apprenticeships and skills are devolved in Wales, so will the Secretary of State tell me which aspects of his announcement apply to the young people of Wales and the other devolved nations?
Pat McFadden
I agree that “NEET” is not the best and most user-friendly term, but it has been used for some time. As for the hon. Lady’s question about what is devolved and what is UK-wide, the hiring bonus will apply throughout the UK, but the apprenticeship aspects are devolved to Wales.
Gill German (Clwyd North) (Lab)
One of my main priorities as an MP is to ensure that we see more of our young people in good, fulfilling work, because I know that far too many young people in Clwyd North are unable to fulfil their potential. I am excited about the £3,000 youth jobs grant and the expansion of the youth guarantee in Wales, but can the Secretary of State tell me more about the difference this will make to young people in Clwyd North?
Pat McFadden
I think that the statement offers hope to young people throughout the United Kingdom. I look forward to a positive and close working relationship between the UK and Welsh Governments on this issue, because I believe that both Governments share a desire for young people, in Clwyd North and everywhere else in the country, to have the best start in life. I think that, for example, the £3,000 hiring bonus and the jobs guarantee for the long-term youth unemployed, which are UK-wide initiatives, can help people in my hon. Friend’s constituency and offer hope that there is a solution to the scarring effect of leaving young people to fester in long-term unemployment, which is not good for them and not good for the country either.
Rebecca Paul (Reigate) (Con)
I think we can all agree that tackling the rise in youth employment is very important, but I am concerned about the approach that is being adopted for that purpose. We are essentially taking money away from employers and then giving some of them some of it back. Has the Secretary of State considered, for instance, the use of existing levers in relation to employer national insurance? That would be an obvious way to address the issue and ensure that some of our young people are employed.
Pat McFadden
The hon. Lady refers to national insurance. As I have said, there is an existing tax break for employers of people under the age of 21 in the system, and they will continue to have that, but in addition they will have the hiring bonuses that I outlined in the statement. When we bring those things together, it sends a message that we want to help employers to employ young people and give them a good chance in life.
Patrick Hurley (Southport) (Lab)
Under the previous Government, as the Secretary of State mentioned in his statement, youth employment never reached pre-financial crash levels in any single year, so the country had suffered a long period of stagnation. Crucially, some young people, unlike a bloke my age, have never known what an active Government can do to get them into good work. Will the Secretary of State confirm that this targeted package of support is precisely what the young people of this country need in 2026, and that it can finally turn the tables on years of Tory decline?
Pat McFadden
My hon. Friend is right. Let me repeat what he said, so that the whole House hears it: when the Conservative party was in power, there was not a single year in which youth employment reached the levels that there had been before the financial crash. Perhaps no other figure shows what a long-term problem this is. It is right that we have targeted support to enable young people not just to earn a wage, but to get the sense of pride and dignity that comes with having a job. I do not want to bombard the House with too many statistics, but another shocking one is that more than half the young people who are not in education, employment or training have never had a job in their life. They have never experienced the sense of discipline, obligation and pride that comes with getting up and going to work in the morning. That is what we have to change.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
The Chancellor has spent the last 18 months pricing young people out of jobs, and now the Secretary of State has been asked to ride to the rescue by paying companies to get the same young people back into work. The Government are effectively robbing Peter to pay Paul. Why does he think that youth unemployment in my constituency is up by 15% since the general election?
Pat McFadden
Youth unemployment has been going up since 2022—it has been going up for around four years. What we have not had is a specific package to tackle it, but that changes with the package that I have announced today, which will offer real hope and opportunity to young people in the hon. Gentleman’s constituency. My gentle advice to him is to go and make the most of this package. That is what he should do for the young people in his constituency.
Anna Dixon (Shipley) (Lab)
I welcome the support for small and medium-sized enterprises in my Shipley constituency, which will be able to take on young people who have been long-term unemployed and to offer apprenticeships, but the Secretary of State will know that young carers face additional challenges with getting into education, training or work. Shipley college provides excellent training opportunities, but often struggles to find work placements. Will he commit to working with DFE to ensure that all young people, including young carers, can benefit from today’s announcement?
Pat McFadden
My hon. Friend is right: there is a particular challenge for young carers. A significant proportion of the 1 million young people who are not in education, employment or training have caring responsibilities. I commend the work of Shipley college, and I am very happy to keep talking to her about this issue to see what help we can give to young carers.
Shockat Adam (Leicester South) (Ind)
Like the rest of the nation, my constituency of Leicester South struggles with youth unemployment, and many young people are not in education or training. The statement is welcome to a certain degree, but I have a technical question for the Secretary of State. Which age range will bonuses cover? Is it 18 to 21? Also, when will the bonuses be paid? Will it be on hiring, or after a certain period of work?
Pat McFadden
It will apply to young people between the ages of 18 and 24. The hiring bonus will be available from this summer, and we will look at having a retention mechanism so that people are not hired one day and let go the next.
Mr Luke Charters (York Outer) (Lab)
Apprenticeship starts fell under the last Government, largely driven by the reduced uptake from SMEs, so today’s SME incentive is a game-changer. Can the Minister confirm that that incentive can be stacked with other incentives—for example, when hiring a care leaver—and will he send a message from the Dispatch Box to York employers that they should take on apprentices and provide the opportunity of a lifetime?
Pat McFadden
I think employers want to do the right thing—they want to give young people a chance. My hon. Friend asks whether the incentives can be stacked, and the answer is yes. For example, if a small or medium-sized enterprise wants to take on a young apprentice who has been unemployed and on universal credit for six months or more, it can claim both the £2,000 apprenticeship incentive and the £3,000 hiring bonus. That sends a strong signal to business, and it is why the Federation of Small Businesses has called this a game-changer, just as my hon. Friend did. It sends a strong signal about giving young people a chance, which is exactly what I think small and medium-sized businesses want to do.
Ben Obese-Jecty (Huntingdon) (Con)
I was lucky enough to get my first job when I was 16—washing up in a kitchen as well as working in a warehouse—which taught me some really good life skills about what it is like to be employed and the responsibilities that come with that. From speaking to businesses in my constituency, I know that those opportunities simply do not exist for young people at the moment. Being paid a bung to hire young people will not help, because the problem is the huge impact of business rates, national insurance contributions and the minimum wage on their ability to retain the staff they have. They are having to lay off those staff because they simply cannot afford to keep them on. Knowing full well that I will clip this and put it on social media, what will the Secretary of State say to businesses in my constituency to show them that he is listening to those concerns and will address them, rather than putting on a sticking plaster, as this package surely does?
Pat McFadden
The hon. Member mentioned his career in washing up, and let me tell him that we have that in common, because one of my first jobs was as a dishwasher in what I believe was Scotland’s first Mexican restaurant, Viva Mexico. I inherited that job from the current First Minister of Scotland, John Swinney, the previous dishwasher in that restaurant, so we can be the three founding members of a national union of dishwashers.
The hon. Member asked for my message to employers in his constituency. It is to look at this package and avail themselves of the support in it—hiring bonuses for young unemployed people, specific help for small and medium-sized enterprises when hiring a young apprentice, and foundation apprentices for retail and hospitality industries. All those things should be good for the small businesses, particularly those in the hospitality sector, in his constituency.
Josh Dean (Hertford and Stortford) (Lab)
I really welcome this Government’s investment in our young people’s futures, but almost half of NEET young people are disconnected from the benefit system and traditional support. I know from my experience of leaving school at 16 just how much of a difference youth workers and trusted adults can make in giving those hidden young people a bridge into support. Can the Secretary of State say a little more about the role that he sees trusted adults playing in supporting young people into work, and reflect on the work of the pilots and the youth trailblazer areas in looking at the co-location of youth services and employment support?
Pat McFadden
My hon. Friend makes the very important point that a significant proportion of the 1 million young people not in education, employment or training are not claiming benefits at all, and not signing on for standard universal credit or the health element.
One way in which we want to reach those young people is through the expansion of our youth hub programme, which gives them a chance to come into a place—often a sports or community institution—and get a range of help on the health front, the housing front and the work-finding front, because young people do not live their lives according to Whitehall departmental boundaries, and why should they? It is up to us to tailor the help to the way they live their lives, and get it to them in the places where they want to be.
Lincoln Jopp (Spelthorne) (Con)
A couple of weeks ago, I hosted a student roundtable, with two pupils from my eight secondary schools and two from my further education college. I agree with the Secretary of State in that I was left incredibly excited for them and by their hopes and aspirations for the future. However, we also had a discussion about how AI-proof those plans were. His statement mentioned short AI courses, and he also talked about the urgency. Can he tell us how short these short courses will be, who is going to deliver them and how the young people of Spelthorne will sign up to them?
Pat McFadden
These short courses or apprenticeship units are something that employers have called for. Until now the minimum length of time for an apprenticeship has usually been eight or 12 months, or something like that, but these can be for a matter of weeks. We will publish more information about them as soon as we can. The sectors, including AI, in which the first wave have been announced are all sectors in which we will need the skills of young people. We are trying to adapt the training offer that we fund to the needs of employers, and one way to do that is with more short courses.
Richard Baker (Glenrothes and Mid Fife) (Lab)
I warmly welcome the Secretary of State’s announcement. This is exactly the kind of initiative to tackle youth unemployment that employers in Glenrothes in my constituency asked me for just a couple of weeks ago. Can he assure me that he will work with Scottish agencies and the Scotland Office to ensure that the scheme has the maximum possible impact in Scotland, where youth unemployment is also far too high?
Pat McFadden
Yes, of course. I want to work with the Scotland Office, the Scottish Government and anyone who can make an impact. I visited the Bellshill jobcentre in central Scotland just before Christmas. I was told by the area manager that over 40% of the young people on her caseload were on what was called the “health journey”. That should bring us up short. It should tell us and warn us about the stickiness and the long-term effects of a young person being off long-term on sickness benefits. We have to do more to get opportunity to those young people and help them into work. I hope the package I have brought forward today can help us to do that.
Ayoub Khan (Birmingham Perry Barr) (Ind)
Across the west midlands, around 29,000 young people are unemployed, with unemployment rates in parts of Birmingham, Wolverhampton and Walsall running at double the national average. I welcome the measures announced today, but how will the Government ensure they reach young people in high unemployment areas such as Birmingham Perry Barr, where approximately 2,000 young people are unemployed, rather than resources being spread thinly across the counties and the country?
Pat McFadden
Obviously, I know the west midlands well and I know the passion that our Mayor, Richard Parker, has for expanding opportunity, offering more skills and more opportunities to young people. I work closely with him on that agenda. I do not believe we should set area against area. Of course I am concerned about youth unemployment in the west midlands. I can assure the hon. Gentleman that his constituents and mine, and those in every other constituency in the west midlands, can benefit from the proposals I have brought forward today.
John Grady (Glasgow East) (Lab)
Glasgow has many brilliant young people who just want to work. They have been let down by the Tories and the SNP, with school standards plummeting and the refusal to fund the Rolls-Royce welding centre. In many meetings I have with employers, they emphasise to me how little they see of the apprenticeship levy they pay in. Will my right hon. Friend outline how the package provides opportunities to young people in Glasgow?
Pat McFadden
I do not need any convincing about how great a city Glasgow is, and I will be going there very soon. My hon. Friend asks what this announcement will mean to young people in his constituency and the city of Glasgow. The hiring bonuses I have announced today will be available all over the country, as will the subsidised job—25 hours a week at minimum wage rates for six months for young people who have been unemployed for 18 months or more—precisely to give young people not just a wage but the sense of pride and purpose that comes with having a job. I hope that that gives hope to the young people in Glasgow. It is hope that we need to give to young people all around the United Kingdom.
Liz Jarvis (Eastleigh) (LD)
The managing director of G. W. Martin, a manufacturing firm based in my constituency, welcomes the hiring bonus included in the announcement, but he says that it will barely cover the cost of one month’s pay. More important to him are the candidates’ attributes and commitment, rather than any bonus on offer. I absolutely welcome any measure to support young people in my constituency into work, but will the Minister tell me what more is being done to ensure young people remain and succeed in the workplace?
Pat McFadden
I welcome the hon. Lady’s—somewhat limited—support for the announcement, but she is right that we need to support young people in the workplace. There is perhaps a touch of nostalgia about some of the comments about young people not being work-ready, because that was the traditional role of youth apprenticeships. When the ladder is kicked away from them, it is no wonder that more young people are not work-ready. We are changing that with this announcement, because we are re-emphasising the importance of youth apprenticeships. I hope she welcomes that part, too.
Antonia Bance (Tipton and Wednesbury) (Lab)
I thank the Secretary of State for this announcement, which will make a big difference to so many young people in our area of the Black Country who are looking for work or training but unable to find the opportunities they need. I recently visited Asda in Great Bridge, where I saw the supported internship scheme that is being run in partnership by Asda, Project SEARCH and Sandwell college. The scheme’s employment rate for learning-disabled young people is 60%, compared with 4% nationally. Would the Minister join me in congratulating Asda, Project SEARCH, Sandwell college, Rose, Manvir, Oliver, Trish and Romeo on the work that they are doing together to ensure that learning-disabled people can get into good jobs?
Pat McFadden
I thank my hon. Friend and parliamentary neighbour for her question. I know Asda in Great Bridge. What a wonderful employment rate that is, after the programme. It gives hope to young people with learning disabilities, who should never be written off; there has been too much of that in the past. Part of our work is to get more help and support to young people with disabilities, in order to give them the confidence and the opportunity that a job can bring.
Lauren Edwards (Rochester and Strood) (Lab)
I thank the Secretary of State for his statement. As someone who represents an area where more than 90% of businesses are SMEs, I particularly welcome the financial incentives for SMEs to take on young apprentices in the key industries of hospitality and retail. Demand for apprenticeships has been high for some time, so I welcome the Government’s recognition that supply-side incentives were needed to provide opportunities for young people in areas like mine. However, SMEs lack HR departments, and when I speak to business owners, they talk a lot about the complexity of engaging with the system. How will the Secretary of State make the system simpler for SMEs to engage with, so that we can give young people the opportunities that they desperately need?
Pat McFadden
My hon. Friend is right that we have tried to put extra incentives in this package for small and medium-sized businesses. In particular, there is the hiring bonus for young apprentices, which is aimed at both young people and small businesses. I hope that will be of help to the small businesses in her constituency. She is also right that clarity of information is important. Schemes like this can be complex, so I want to work with officials to make the information about this one, and the administration of it, as clear and simple as possible—consistent, of course, with the need to properly use and protect public money.
Frank McNally (Coatbridge and Bellshill) (Lab)
It was a pleasure to join my right hon. Friend at Bellshill jobcentre last year to hear about the need to support young people who are not in education, training or work. I greatly welcome this announcement, which will help transform life opportunities. Businesses in my constituency across a range of sectors highlight that despite their willingness to train the next generation of workers, intentions are often undermined by the failing apprenticeship system in Scotland. Can my right hon. Friend expand on how the positive actions of this Government will support young people in Scotland who have sadly and tragically been left behind by the SNP?
Pat McFadden
My hon. Friend and I had a great day in Bellshill just before Christmas; I am grateful to him for the visit, and to the staff at the local jobcentre for explaining to us both the work that they were doing. The programme I am announcing today offers hope to young people in his constituency; the £3,000 hiring bonus will be available throughout Scotland. Of course, apprenticeship funding is devolved, but I hope that the Scottish Government will provide the maximum opportunity for young people to combine an apprenticeship role with the hiring bonus, which is available to businesses across the country.
Alex McIntyre (Gloucester) (Lab)
I must admit that I am a little disappointed by those on the shadow Front Bench, who are sneering and suggesting that plunging 3,000 Gloucester children back into poverty will somehow solve long-standing issues with youth unemployment. That is not backed up by the facts, and, quite frankly, it comes across as quite nasty. The Conservatives promised to level up places like Gloucester, but they left the most deprived parts of my city, and the young people living there, without the opportunity to get on.
I am really pleased to see Gloucester boy Tom Kerridge, who grew up in Matson in my constituency, backing the proposals that my right hon. Friend is putting forward. Can he explain to the House how more young people will be able to benefit from the Government’s reforms?
Pat McFadden
Tom Kerridge has achieved a great amount and done fantastic things. I was very pleased to meet him and talk to him about this package a few days ago, and I welcome his warm support for it. I agree with my hon. Friend on the response from those on the Opposition Front Bench. Young people throughout the country will have heard them dismiss the help that we are putting in place. If that is what the Opposition want to do, that is up to them, but we take a very different view. We want to give hope and opportunity to young people; we want to stop dismissing them; and we want to give them belief in their future. That is what this package is about.
Lola McEvoy (Darlington) (Lab)
The message from this Dispatch Box is clear: apprenticeships, apprenticeships, apprenticeships. This Government will meet the challenges that we face today with fantastic careers for the next generation, so thank you. SMEs in Darlington are huge engines of growth across the country. Many of the business owners came up through apprenticeship routes, and desperately want to pass on that opportunity to the next generation. We will bite the Secretary of State’s hand off for the £2,000 hiring bonus. Can the Secretary of State outline any sector-specific restrictions on the types of SMEs that can take advantage of the bonus?
Pat McFadden
We do not propose restricting the hiring bonus by sector, though my hon. Friend will have heard me list in my statement the areas covered by the new apprenticeship units—areas such as artificial intelligence, electric vehicle charging, infrastructure, solar panel installation, welding and so on. As regards the new short apprenticeship units, there are some specific areas that we are putting forward first.
Josh Fenton-Glynn (Calder Valley) (Lab)
I welcome this announcement. It will make young people’s lives and futures better. Calder Valley is famous for its world-class specialist manufacturing, but in the UK, one third of manufacturers are over 60. Can my right hon. Friend please confirm that this policy announcement will help us bring in the new generation of skills that we need for our economy?
Pat McFadden
This package can make a big contribution towards that. As I have said, there are 50,000 vacancies in manufacturing in the UK today. That is partly because of the difficulty that people have in finding skilled workers. With today’s extra help for apprenticeships for young people, we can begin to change that. That is why it is such an important part of this package.
Madam Deputy Speaker (Judith Cummins)
I call Chris Bloore for the final question.
Chris Bloore (Redditch) (Lab)
I am always happy to be last on an announcement such as this. The businesses and young people in my constituency strongly welcome what the Secretary of State has announced today. As I listened to those on the Opposition Front Bench, I was reminded of the statement by Senator Moynihan of New York:
“you are entitled to your own opinions, but you are not entitled to your own facts”.
Sadly, the Opposition have failed to mention that for over a decade, the UK has fallen behind other OECD countries when it comes to reducing the number of young people not in education, employment or training. That is because of structural failings in both education and public health, which the previous Government did nothing to solve. How can young people and businesses in my constituency of Redditch take part in this scheme, which will finally start addressing the tragedy of NEETs in our constituencies?
Pat McFadden
On the final question, I agree with my hon. Friend that this problem of young people not in education, employment or training is a long-term one that grew under the tutelage of the Conservative party, and about which it did precisely nothing. This statement and package is a different approach, with a very clear message behind it. Let us go out and sell it. That message is: we believe in Britain’s young people; we want to give them a better future; and we have a package of help to enable them to achieve that.
Youth Employment
Pat McFadden Excerpts(1 week, 2 days ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
At the Budget, the Chancellor committed more than £1.5 billion to back young people through the youth guarantee and changes to the growth and skills levy.
Today we are going even further. We are announcing almost £1 billion more to help young people into work and training, unlocking up to 200,000 jobs and apprenticeship opportunities by investing in:
The youth jobs grant, an employer hiring incentive worth £3,000 per young person aged 18 to 24 who has been on universal credit and looking for work for six months;
A new apprenticeship incentive, £2,000 for non-levy paying small and medium-sized enterprises in England when they take on new employees aged under 25; and
Expanding the jobs guarantee to 22 to 24-year-olds, meaning all eligible 18 to 24-year-olds across Great Britain will benefit from a fully funded six-month guaranteed paid employment opportunity.
Our ambition is for every 16 to 24-year-old across Great Britain to access opportunity. These changes take the total investment into the youth guarantee and the additional investment in the growth and skills levy to £2.5 billion over the next three years, supporting almost 1 million young people, and creating up to 500,000 opportunities to earn and learn.
This will begin in April, when the first phase of the jobs guarantee will go live for 18 to 21-year-olds in Birmingham and Solihull, East Midlands, Greater Manchester, Hertfordshire and Essex, Central and East Scotland, and South-west and South-east Wales. This will be followed by national roll-out in the autumn of this year for 18 to 24-year-olds.
Further reform to the growth and skills levy
There has been a 40% drop in young people starting apprenticeships over the past decade. This is why the Government are setting out the next stages of the growth and skills levy reforms, to reverse this sharp decline in apprenticeship starts for 16 to 24-year-olds and address the rising number of those not in education, employment or training.
To support this, we are announcing the expansion of foundation apprenticeships into hospitality and retail. These are sectors that traditionally employ large numbers of young people and provide strong entry points into sustained employment, while also supporting retention and progression.
We are also introducing new apprenticeship units aligned to industrial strategy priorities, to give employers greater flexibility in how they upskill their employees. This will make it easier and faster for businesses to address their critical skills needs in areas including AI, construction and engineering, and we will develop further units informed by ongoing input from industrial strategy growth-driving sectors.
We will prioritise youth apprenticeship starts within the growth and skills levy, stopping the 40% decline in apprenticeship starts that has occurred over the past decade.
This will mean that the Government are no longer funding three leadership and management apprenticeship standards that are largely used by employers for older, established staff as continuing professional development, but are instead using the funding for new apprenticeship starts for young people. A further 13 standards that do not sufficiently support young people or our industrial strategy ambitions will also be defunded.
Streamlining the existing offer ensures that our increased investment delivers maximum value for money, supports clearer routes into skilled jobs, and creates headroom for investment into new opportunities for young people and employers alike.
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Oral Answers to Questions
Pat McFadden Excerpts(2 weeks, 2 days ago)
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Alison Griffiths (Bognor Regis and Littlehampton) (Con)
The Secretary of State for Work and Pensions (Pat McFadden)
Headline unemployment is below its average rate under the previous Government, and inactivity is falling as more people actively seek work. Some 381,000 more people have moved into work over the past year. However, there is a long-term challenge in youth unemployment, which we are responding to through the youth guarantee, more youth apprenticeship starts and other measures.
John Cooper
Youth unemployment is, in fact, spiking at nearly 5.3%, which is heartbreaking, particularly for young people who cannot get that all-important first job. The Government like to pretend that they are a cork in a storm-tossed sea and unable to do anything about this, but they could reconsider employer national insurance contributions and the disastrous Employment Rights Act 2025, which is driving up youth unemployment.
Pat McFadden
The hon. Member will be aware of the national insurance tax break under which no employer national insurance contributions are payable for workers under 21, unless they earn more than £50,000, which not too many workers under the age of 21 do.
Jerome Mayhew
The Minister answered a question about unemployment by giving data about employment, so let us focus on unemployment numbers. By how much has general unemployment increased since July 2024?
Pat McFadden
I did talk about unemployment. As I said, the unemployment figures are lower, on average, than when the hon. Gentleman’s party was in power. We are, of course, doing everything we can to help people into work, which is why I referred to the measures that we are taking, including the youth guarantee and increased apprenticeship starts. That is a much more active approach than the one carried out by the previous Government, who saw rising numbers of young people not in education, employment or training but did precisely nothing about it.
Sir Desmond Swayne
The Government loaded costs on to employers while the benefits bill let rip. What on earth did they think would happen?
Pat McFadden
As I said, no employer national insurance contributions are payable for workers under the age of 21, and we believe that workers should be decently paid for the work they do. We are responding to the particular challenge of youth unemployment, which I acknowledge is there, and was there when the Conservative party was in power, with active measures such as the youth guarantee and more youth apprenticeship starts. I remind the House that youth apprenticeship starts fell by 40% while the Conservatives were in power.
Alison Griffiths
I recently launched my Bognor Regis and Littlehampton business club. Many who joined are independent hospitality and leisure businesses, and their No.1 concern is how difficult it is to take on new staff under this Government. What assessment has the Department made of the impact of the Treasury’s new jobs tax, and the Government’s new employment regulations, on job creation in coastal constituencies such as mine? What steps is the Secretary of State taking to mitigate those effects?
Pat McFadden
I congratulate the business club—such organisations play a valuable role in our constituencies. The hon. Lady asks what measures we are taking, and I am grateful to the Chancellor for the extra funding made available in the Budget for the youth guarantee. That will gives hundreds of thousands more training and work experience places to young people and, importantly, will provide funding for the long-term youth unemployed to gain six months’ work, paid at the national minimum wage for 25 hours a week, so that young people get used to the discipline and duty of turning up, doing a job, and experiencing the sense of pride and purpose that comes with having a job.
Lauren Edwards (Rochester and Strood) (Lab)
Net migration has fallen to the lowest level since 2021, which will have a significant impact on our labour market and economy if we do not train and support unemployed people in the UK into jobs in key sectors. What steps is the Secretary of State taking to target back-to-work programmes, especially those for young people who are not in work, education or training, to fill skills shortages in crucial areas such as health and social care?
Pat McFadden
My hon. Friend asks an excellent question. The fact that net migration is falling to lower levels than we have seen for some time gives added urgency to a question that has often been posed: why do we not do more to train our own workers? That is precisely why I am prioritising youth apprenticeship starts, which fell by 40% under the previous Government. We must arrest that decline and ensure that we respond to the new situation of falling levels of net migration by training more of our own young people.
Steve Yemm (Mansfield) (Lab)
Will the Secretary of State outline what exactly the youth guarantee means for young people in my constituency of Mansfield?
Pat McFadden
What it will mean for young people in my hon. Friend’s constituency, and many others, is intensive work coach training, and the chance of training or work experience. If that does not get them into a job, ultimately it will mean a subsidised job, where they get six months of work experience, paid at the national minimum wage for 25 hours a week. The last thing we want is people leaving education and going on to a life on benefits.
Chris Vince (Harlow) (Lab/Co-op)
The Secretary of State will know that the level of young people not in education, employment or training in Harlow has gone down, due to the hard work of Harlow College, working in partnership with local schools such as Passmores Academy and Burnt Mill Academy, which I visited this morning. Businesses and the local chamber of commerce are telling me that the No.1 challenge for getting young people into employment is the skills they have upon leaving school. What work is the Secretary of State doing with the Department for Education to ensure that we have a curriculum that incorporates the skills that employers so desperately need?
Pat McFadden
I am relieved to hear that the number of young people not in education, employment or training is dropping in Harlow. The number of such people rose by a quarter of a million in the last few years of the Conservative party’s time in government, and they did absolutely nothing about it. Bringing skills into the Department for Work and Pensions gives us the chance to bring skills policy and labour market policy closer together, to help young people get that vital chance of a first job.
Mr Peter Bedford (Mid Leicestershire) (Con)
When this Government came into office, unemployment stood at 4.2%. After a brutal 18 months of job-destroying, anti-business, anti-growth policies, it now stands at 5.2%, with young people bearing the brunt—1 million of them are not in employment, education or training. We Conservatives believe in being in work and off welfare, and that is the best path to eradicating poverty. Will the Secretary of State break with the mistakes of all previous Labour Governments and commit that unemployment will be lower at the end of this Parliament than it was at the start?
Pat McFadden
I believe this may be the first time that the hon. Member has appeared at the Dispatch Box in his capacity as shadow Minister—if I am wrong about that, I am sorry; but if I am right, I welcome him to his position. He asks about the forecast for the future. It was published alongside the spring statement a couple of weeks ago, and in it the Office for Budget Responsibility forecast employment to rise in every year of the forecast period.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Steve Darling (Torbay) (LD)
Politics is all about choices. Last week, the Chancellor stood at the Dispatch Box with a choice: she could have chosen to reverse the jobs tax that is costing thousands of jobs for young people up and down the United Kingdom. Why she did she not make that choice?
Pat McFadden
Whatever Department I am in, I hear the same question from the Liberal Democrats. They support all the extra spending that is funded by revenue-raising measures, but they oppose all the revenue-raising measures themselves. If the hon. Gentleman wants NHS waiting lists to fall and if he calls for more spending every week, then he has to support the revenue-raising measures that make that possible.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Alex McIntyre (Gloucester) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
The statistics for the second half of 2024 show the scale of the situation that we inherited from the previous Government. The number of young people not in education, employment or training had increased by around 300,000 since 2021, but, unlike the last Government, we are doing something about that. Over three years, the Government will invest some £1.5 billion to improve opportunities for young people through both the youth guarantee and more youth apprenticeships. We are expanding the number of youth hubs to more areas of the country, and we aim to add about 50,000 more starts through the change to youth apprenticeships. That is in stark contrast to the situation we inherited.
Mr Rand
I draw the Secretary of State’s attention to Wiseup Networks, an organisation, based in my constituency, that enables employers across Manchester and London to provide young people with work experience and mentoring opportunities for those with social and economic barriers to work, including young people with special educational needs. Those opportunities lead to job offers, increased confidence and new career options for the participants. Given this Government’s commitment to social mobility and ensuring that young people are earning or learning, will the Secretary of State meet me and Wiseup Networks to discuss how we can support its vital work?
Pat McFadden
I am grateful to my hon. Friend for highlighting the valuable work of Wiseup Networks. He is absolutely right; work experience and mentoring can play a very important role in helping young people to find work. Confidence can be an issue for young people, so building that up is really important. I am happy to arrange a meeting between him and a Minister from this team.
Linsey Farnsworth
I am delighted that the Secretary of State is planning to visit the David Nieper Academy in Alfreton later this year. The school recently achieved zero NEETs at age 18 for the second year running by working closely with local industry and teaching employability skills. Local initiatives such as that should be complemented by national programmes. Will the Secretary of State provide an update on the results of the Wakefield pathfinder, which is seeking to trial a new, locally led approach to jobseeker support? Given our success in Alfreton, can he confirm whether Amber Valley could be considered as a location for the next pathfinder?
Pat McFadden
I thank my hon. Friend for highlighting the excellent work of the David Nieper Academy in achieving NEET zero, and I congratulate it on doing so. She mentions the career service pathfinder in Wakefield, which was launched in April 2025. We are testing more personalised employment support, and evaluation is under way to understand how this approach works. It is right that we approach these matters with flexibility and innovation, and do not always do what we have always done.
Josh Dean
A young person with undiagnosed attention deficit hyperactivity disorder is more likely not to be in education, employment or training. That is driven by a lack of recognition, treatment and tailored support. The expert-led NHS ADHD taskforce estimates that the cost to the UK economy of unsupported ADHD is £17 billion each year, but, with the right support, young people with ADHD can thrive. Will the Secretary of State set out how the Department is working across Government, including through the Milburn review, to ensure that young people with ADHD can access the support they need to thrive in work and reach their potential?
Pat McFadden
I know that my hon. Friend has spoken movingly about his own experience with ADHD. I assure him that Alan Milburn, a former Health Secretary who is carrying out this report for us, is in regular contact with the chair and secretariat of the independent review into prevalence and support for mental health conditions, ADHD and autism, which is being carried out by the Department of Health and Social Care. More broadly, we should support young people, try to increase their confidence and ensure they do not conclude that a diagnosis means that they cannot work, because that should not be the conclusion reached. Many people who do have a diagnosis can go on to have very productive working lives.
Anneliese Midgley
Last week I met with Knowsley chamber of commerce, and we all welcomed the Government’s youth guarantee. Some 55,000 placements is a great start, but no scheme starts are currently planned in Knowsley, where the likelihood of young people not being in employment, education or training is higher than average. Will the Secretary of State commit to expanding the scheme and meet me and Knowsley chamber of commerce to discuss how we can get more young people into good jobs in Knowsley?
Pat McFadden
My hon. Friend has spoken powerfully of how unemployment in her constituency has scarred generations. I assure her that the youth guarantee will become nationwide by the end of the year. We have to break the cycle of intergenerational unemployment that she has spoken about, and I share her desire to be more ambitious in that area. I am very happy to keep up a dialogue with her and to meet with her, or to have a fellow Minister in the team do so.
Alex McIntyre
Gloucestershire Gateway Trust does vital work in my constituency, helping those not in employment, education or training back into work. It runs the Bridging the Gap programme, which provides an employability skills course and a guaranteed interview at the country’s best motorway services, Gloucester services. It also ran the Going the Extra Mile project, which supported over 2,000 local residents who were furthest from employment. It is exactly the kind of organisation we need to work with to tackle the challenges we face, but the GEM project was stopped under the previous Government due to a lack of funding. Can the Secretary of State visit my constituency to see the work that Gloucestershire Gateway Trust is doing, and to discuss how we can work with community and voluntary organisations to tackle these challenges from the ground up?
Pat McFadden
I suspect we could be here for some time talking about what the best service station in the country is, but I have to say that Rugby services, between London and Wolverhampton, has taken things to another level. Gloucestershire Gateway Trust has helped create over 400 jobs for local residents. It continues to provide invaluable support, and I am very happy to take the opportunity to visit my hon. Friend’s constituency at some point—diary permitting, as they say.
Graham Stuart (Beverley and Holderness) (Con)
Might the Secretary of State perhaps come up to Long Riston in my constituency and go to Oasis services, where I went on Friday? It faces a fivefold increase in its business rates, as well as the impact of the more than £4,000 increase in the cost of hiring a young person. Some people may welcome this national youth guarantee from the Government, but does it not remind you, Madam Deputy Speaker, of what Ronald Reagan said about the left? If something is moving, they tax it; if it keeps moving, they regulate it; and when it stops moving, they subsidise it.
Pat McFadden
The truth is that the Conservatives presided over a huge post-covid rise in the number of young people not in education, employment or training, and they did precisely nothing about it. They also presided over a huge rise in the number of young people going on to sickness and disability benefits and did precisely nothing about it. They have discovered a thirst for change only after leaving office—they have no credibility and no plan on this issue. In contrast, we are responding through the youth guarantee, through changes to the apprenticeship system, and by giving young people more hope that the Government will help give them a chance in life.
John Milne (Horsham) (LD)
A recent report from Adzuna, a large job search agency, shows youth unemployment at an 11-year high and vacancies plummeting. Jobseekers urgently need the new “jobcentre in your pocket” digital service. Given that current timeframes suggest that it will not be ready until 2028, will the Secretary of State assure us that all options are on the table to accelerate delivery—including leveraging the private sector and technology—so that we can support jobseekers now, rather than years down the line?
Pat McFadden
We do want to support jobseekers now. As I said, there is a long-term challenge with youth unemployment, which we are responding to through the measures I have outlined. If we can be more ambitious than those measures in the future, we very much will.
Greg Smith (Mid Buckinghamshire) (Con)
The Centre for Social Justice found that as of the end of last year, 707,000 young people with a university degree were out of work and on benefits. That statistic comes at the same time that employers in my constituency, from the furniture makers in Princes Risborough to the rocket scientists and space sector in Westcott, are saying that they do not want graduates any more—they want apprentices. What is the Secretary of State doing in conjunction with the Department for Education to better signpost young people into pathways for learning and education that will actually help them get a job further down the line?
Pat McFadden
The hon. Gentleman will find that graduate unemployment is an international issue. If we want more non-higher education skills, he should support our plans to stop the decline that we saw in youth apprenticeship starts when his party was in power and to direct more money to youth apprenticeship starts. That is precisely what we will do.
Vikki Slade (Mid Dorset and North Poole) (LD)
MYTIME Young Carers in Dorset works to identify and support young people with caring responsibilities, as without information on their whereabouts, it is hard to target them for initiatives. In a recent national youth voice survey, one in three young carers aged 16 to 18 reported that they were not in education, employment or training. That is eight times the rate of the rest of their peers. What steps is the Department taking to level the playing field for young carers alongside their peers, so that they can fulfil their potential?
Pat McFadden
The hon. Lady makes a good point. When we look at the total number of NEETs, within that is what we might regard as standard unemployment cases, a lot of health, sickness and disability cases and a significant number of young carers. One of the things we are doing is expanding childcare support through free breakfast clubs and extending the number of free hours so that we can support young parents to get into work after they have had a child.
Tom Gordon (Harrogate and Knaresborough) (LD)
I recently visited Ventrolla, a specialist heritage window manufacturer in my constituency. It was concerned by the recent announcements of apprenticeship reform and the impact that will have on its apprentices. It has signed a cross-party and cross-organisation letter from industry leaders and experts to the Prime Minister about the sector’s concerns about the changes to apprenticeships. They think those changes will undermine the Government’s ambition to generate economic growth. What conversations are Ministers having with businesses such as Ventrolla to ensure that these changes do not adversely impact the sector and rob young people of these opportunities and apprenticeships?
Pat McFadden
We have a lot of dialogue with businesses about the nature of the growth and skills levy and how it is used. I have to say to the hon. Gentleman and to the House that we are making a choice to prioritise young people. It is precisely because the previous Government did not prioritise young people that we saw a 40% decline in apprenticeship starts. I do not think that is an argument for the status quo; it is an argument for change. That is the slogan upon which we were elected, and it is change to the system that we will bring.
Rebecca Smith (South West Devon) (Con)
When the Secretary of State and I last met like this, he lauded the roll-out of youth hubs and the introduction of the youth guarantee as the solution to tackling the scale of young people not in education, employment or training. Since then, however, apprenticeship figures have been updated. The latest figures show that apprenticeship vacancies and adverts have significantly decreased since the Labour Government took office. If we compare the latest figures from this academic year with the same period in 2024-25, apprenticeship adverts have fallen by 27% and the number of vacancies has fallen by 22%. How can the Secretary of State make the promise of a youth guarantee with this alarming reduction in the number of available apprenticeships?
Pat McFadden
Precisely because we are tilting the funding more towards youth apprenticeship starts, we will arrest the decline that happened when the hon. Lady’s party were in power. Change needs to come to the system if we want to do that, and I believe it is the right choice. The effect on young people who come off education and go on to benefits can be lifelong, so it is right that we prioritise them in the system.
Adam Thompson (Erewash) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
The right hon. Alan Milburn is making progress on his report. He brings valuable experience as a former Secretary of State for Health and former chair of the Government’s Social Mobility Commission. He is engaging with stakeholders across the country to increase the understanding of what has driven the increase in NEETs in recent years, and his interim report is due later in the spring.
Adam Thompson
With almost 8% of 16 and 17-year-olds not in education, employment or training, Derbyshire is the worst county in the east midlands for NEET. In New Stanton Park in Ilkeston, on the former site of a once-famous ironworks, major investments are bringing good manufacturing jobs back to Erewash. Will the Secretary of State share the work he is doing to ensure that apprenticeships are available to disadvantaged young people so that they can thrive, instead of being left behind?
Pat McFadden
My hon. Friend brings valuable experience to this matter, including his experience of teaching engineering apprentices at the University of Nottingham. We are committed to ensuring that disadvantaged young people have access to high-quality apprenticeships and can benefit from the new jobs being created in places such as Erewash as a result of the changes in how the growth and skills levy is used—as I have explained in response to earlier questions—and the extension of youth hubs in the region to give young people who may not be claiming benefit or undertaking an apprenticeship the chance of finding that vital first job.
Dr Danny Chambers (Winchester) (LD)
Sophia, whom I spoke to in my constituency office in Winchester this morning, is one of many recent graduates—often with really good degrees from really good universities—who have been applying for hundreds of jobs and not even receiving replies. Has the Department carried out an assessment of the impact of artificial intelligence, in all its forms, on graduate employment prospects over the next few years? What work has been done with universities and institutions that offer apprenticeships to ensure that young people are graduating with the right set of skills to be able to work in this era of artificial intelligence?
Pat McFadden
The hon. Member has posed a very good and important question, and the issue of graduate unemployment is by no means confined to the UK. In the United States, for example, a similar debate about graduate unemployment is taking place. The truth is that structural developments are happening in the labour market. Technology is undergoing a big shift, and I think that all Governments must ask themselves how to help young people through this transition. The one thing that we cannot do is abandon them to it: we have to train people, and we have to ensure that the UK is best placed to take advantage of this big technological shift.
Kirith Entwistle (Bolton North East) (Lab)
Kirsty Blackman (Aberdeen North) (SNP)
The Secretary of State for Work and Pensions (Pat McFadden)
The Scottish unemployment rate is 3.8%, and overall economic inactivity in Scotland is higher than in the UK as a whole. However, I am pleased to say that Scotland has had the biggest increase in funding since devolution began. It will benefit from major defence contracts, including the £10 billion contract to build five new frigates for the Norwegian navy, and from the trade deals we have negotiated over the past year, which will be of particular benefit to Scotland’s whisky and food industries.
Kirsty Blackman
One in three—or more than one in three—people in my constituency are employed directly or indirectly or in induced jobs in the offshore energies industries. Given the continuation of the tax system for oil and gas, investment in that industry has reduced. Is the Secretary of State confident that the Government’s measure of the number of jobs lost, particularly in the oil and gas industry, is truly accurate, given that people are generally not signing on for universal credit but rather doing things such as moving to Dubai and Doha?
Pat McFadden
That is of course a hugely important industry for the UK. The hon. Member will be aware that a transition is taking place, but oil and gas will be part of the mix for a long time to come. The Chancellor met those in the industry last week, and I assure the hon. Member and her constituents that the industry’s importance is recognised and hugely valued by the Government.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
Last year, the SNP Government in Holyrood funded nearly 9,000 fewer apprenticeships than colleges and industry asked for, robbing thousands of Scots of opportunities and starving businesses of skilled workers. Meanwhile, youth unemployment in Scotland is rising; more than one in eight young people in Scotland are unemployed. Does my right hon. Friend agree that one of the solutions to that problem is electing a new Government in Holyrood in May, under Anas Sarwar of the Labour party?
Pat McFadden
I very much agree with my hon. Friend’s final point. I think Anas Sarwar would make an excellent First Minister, and I look forward to supporting him in the campaign to come. The youth guarantee, to which I have referred, extends to Scotland. We want young people in Scotland to have as many opportunities and as good opportunities as young people anywhere else in the UK, and in particular not to fall into the pattern of leaving education and going on to a life on benefits.
Manuela Perteghella (Stratford-on-Avon) (LD)
Sarah Dyke (Glastonbury and Somerton) (LD)
The Secretary of State for Work and Pensions (Pat McFadden)
Since the last Work and Pensions questions, we have had Apprenticeships Week, when I visited Cammell Laird shipyard in Birkenhead and London Underground’s Acton Works in west London. I attended the youth guarantee jobs fair in Blackpool, which connected over 3,000 local people with 90 employers; had a roundtable with business at which, for example, Make UK reported 50,000 vacancies in the engineering and manufacturing sectors; and we extended the Connect to Work programme to give employment support to more than 75,000 more people with disabilities or long-term sickness—people far too often in the past simply signed off and written off.
Sarah Dyke
Skills bootcamps in Somerset give businesses in Glastonbury and Somerton the opportunity to collaborate with training providers. This helps to address persistent skills shortages. However, changes to funding allocations could see Somerset lose nearly 70% of its funding. Will the Minister urgently review the skills bootcamp funding methodology? Without it, an important pathway for residents to gain valuable skills and to support economic prosperity in Somerset will be compromised.
Pat McFadden
I appreciate the value of skills bootcamps. They can play an important role in the mix of policies we are talking about today. I hear the representations the hon. Lady has made for more funding. All I would say to her and her party is that if we have more funding, I hope they support whatever revenue-raising measures that have to be put in place for it.
Sarah Coombes (West Bromwich) (Lab)
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
Pat McFadden
The hon. Member is right to point to the disparity of information that there sometimes is for apprenticeships compared with university courses. It is something that we need to address by improving the information available and ensuring that young people embarking on an apprenticeship are treated with just as much esteem and respect as those who undertake a university course. Information is very much part of the changes that we are pursuing.
Catherine Fookes (Monmouthshire) (Lab)
Sadly, I have been contacted by a number of constituents who are facing a hidden problem in the child maintenance system: their ex-partner has found ways of hiding their income to avoid having their monthly payments increased or paying the arrears that they owe. Can the Minister share with me the work that the Department is doing to ensure that income assessment of paying parents is accurate, agile and serves the children it is meant to support?
Euan Stainbank (Falkirk) (Lab)
Powering Futures is a fantastic social enterprise based in Falkirk, and its oven-ready project will deliver at least £1.6 million in quantifiable social outcomes, including addressing youth unemployment in every local authority in Scotland. Funders have been identified, so will the Secretary of State meet me to discuss what support his Department may be able to offer Powering Futures?
Pat McFadden
I thank my hon. Friend for his question. I am very happy to make sure that he gets a meeting with me or another Minister in the team.
Lee Anderson (Ashfield) (Reform)
Pat McFadden
I am grateful to the hon. Gentleman for the retraining scheme that he is running for former Conservative MPs, although I am not convinced that a change of colour is really a change of heart. Let me come to the heart of his question. We do believe that if people have worked here and have contributed over the years, they are entitled to the benefits that the state provides. The logical conclusion of his position would be to deny that to many people who have lived and contributed here, sometimes for decades.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
The Secretary of State will know that working in the visitor economy is so good for young people’s confidence. The extensive Cornish hospitality sector would like to be part of the youth guarantee pilot. Will he consider meeting us to discuss that?
Pat McFadden
We are all going to have busy diaries after this session. I pay tribute to the Cornish hospitality sector. My hon. Friend is right that those are great opportunities for young people, and I will make sure she gets a meeting with someone.
Mr Joshua Reynolds (Maidenhead) (LD)
Liam Conlon (Beckenham and Penge) (Lab)
Today, The Guardian published an article showing that up to 13,000 survivors of Ireland’s mother and baby homes living in Britain today could lose their compensation payments if they accept the redress scheme from the Irish Government. My campaign for Philomena’s law is backed by public figures including Dara Ó Briain, Siobhán McSweeney and Steve Coogan. It would resolve the issue by ensuring that the payments are ringfenced. Will the Secretary of State consider the merits of the case and agree to meet me to discuss it further?
Pat McFadden
The whole House will be aware that the women who lived in the mother and baby homes sometimes went through terrible experiences. I commend my hon. Friend for his campaign for some measure of justice for those women. We are examining what we can do in those cases. A small number of those women live in the UK, and I assure him that help is under active consideration.
Dr Al Pinkerton (Surrey Heath) (LD)
My constituent Michael, who is autistic, lost his personal independence payment in January when he was moved to employment and support allowance without explanation. He is attempting to appeal that decision. Given warnings from the National Autistic Society about barriers that autistic people face in navigating the benefits system, what steps is the Department taking to improve communication and staff training to better support neurodiverse claimants?
John Slinger (Rugby) (Lab)
An important component of the Government’s drive to reduce the number of NEETs is encouraging Jobcentre Plus to work innovatively in constituencies such as mine. Will the Secretary of State join me in commending its work in organising with me a jobs fair on 16 April from 10 am till 1 pm at the Indian community centre in Rugby? Of course, he or his Ministers would be very welcome to come and see that innovation in practice.
Pat McFadden
I have already praised Rugby once during this session; let me do so a second time. I cannot promise to attend my hon. Friend’s jobs fair, but I can say that such fairs play a valuable role in bringing together employers who need staff with potential employees who need jobs. I saw that myself in the very sizeable Blackpool jobs fair that I attended a week or so ago.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
Emma from Abbots Langley in my constituency has to comply with strict timeframes for her job as a frontline worker within a local government adult care service. Despite that, the video relay service allowance that she receives as a deaf person has been reduced by over 75%, meaning that it is significantly below her working hours. Given that the waiting period for Access to Work reconsideration cases can span up to several months, how can the Minister assure my constituent that the delay will not undermine her ability to work?
Jobs Guarantee: Correction to Written Statement
Pat McFadden Excerpts(1 month, 2 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Pat McFadden)
On 29 January, I made a written statement on the jobs guarantee. There was a minor error in the statement. The statement said:
“I would also like to thank the over 60 employers who have already committed to providing jobs for participants of the scheme, including E.ON, JD Sports, Tesco and TUI. Once delivery partners are in place, they will work with employers to help secure these employment opportunities, with support from DWP for those large employers with a national footprint.”—[Official Report, 29 January 2026; Vol. 779, c. 57WS.]
It should have said:
“I would also like to thank the over 60 employers who have already expressed an interest in providing jobs for participants of the scheme, including E.ON, JD Sports, Tesco and TUI. Once delivery partners are in place, they will work with employers to help secure these employment opportunities, with support from DWP for those large employers with a national footprint.”
[HCWS1310]
Universal Credit (Removal of Two Child Limit) Bill
Pat McFadden ExcerptsTuesday 3rd February 2026
(1 month, 3 weeks ago)
Commons ChamberRead Full debate Universal Credit (Removal of Two Child Limit) Act 2026 View all Universal Credit (Removal of Two Child Limit) Act 2026 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Pat McFadden)
I beg to move, That the Bill be now read a Second time.
Core to our belief is the idea that no one, no matter their background, should be trapped by their circumstances. People should have the chance to make the best life they possibly can. Poverty is a barrier to that ambition, and it makes it much harder for people to achieve their full potential.
This legislation has its roots in the change made during the Conservative years to introduce the two-child limit on support for families on universal credit. Let us be clear at the start about what this was always about. It was never really about welfare reform, nor was it even about saving money. No, this was always, first and foremost, a political exercise—an attempt to set a trap for opponents, with children used as the pawns. This was all about the politics of dividing lines: between the so-called shirkers and strivers, or the old distinction between the deserving and undeserving poor. Politics first and policy second, every time.
Sir Oliver Dowden (Hertsmere) (Con)
The right hon. Gentleman has provoked me into responding. I served in the previous Conservative Government, and I was involved in all those decisions. There was a clear principle behind them: will people take responsibility for their own actions? There are thousands—millions—of people who choose not to have more children because they want to take responsibility for their lives, rather than the state doing so. With this change, the Government are saying to those people, “Not only will the state take responsibility, but you as the individual will have to pay for it through higher taxes.” That is the principle at stake here, and the Government are reversing a clear principled position taken by the last Government.
Madam Deputy Speaker
Order. Before the Secretary of State responds, let me say that there are many colleagues in the Chamber and I can understand how passionate this debate is, but let us try to keep the noise down when colleagues are contributing.
Pat McFadden
The right hon. Gentleman has set out the previous Government’s justification. I am about to explain why that did not stack up at the time, and why it certainly does not stack up after the experience of the policy.
We should begin by considering why no other neighbouring country has this two-child limit. Given that the policy was always primarily about politics, it is no surprise that it did not achieve the objectives that the right hon. Gentleman just tried to set out. The Tories claimed that this would lead to people making different choices about the number of children to have, but that did not happen. The family size premise was itself based on the fundamental misconception that there is a static group of people who are always on universal credit.
Pat McFadden
Not at the moment. This is not a static group; people’s circumstances change, marriages break up, spouses die and jobs can be lost. In fact, around half of the families who will benefit from the lifting of the two-child limit were not on universal credit when they had any of their children. This is not a static group of people, which drives directly at the heart of the argument that the right hon. Member for Hertsmere (Sir Oliver Dowden) tried to make.
Sir Ashley Fox (Bridgwater) (Con)
Twelve months ago, not only did the Government support the two-child cap, but they were busy suspending Labour Back Benchers who voted against it. Can the Secretary of State tell the House what it was about the Prime Minister’s weak position that caused him to change his mind?
Pat McFadden
I will come on to the timing of our decision, and exactly why it is right.
Pat McFadden
Not at the moment.
As I said, around half the families who will benefit were not on universal credit when they had any of their children. These are people who found themselves in need of help long after any decisions about family size had been taken.
No account was taken of the costs of the policy further down the line, such as lower educational attainment, worse mental health and lower earnings, perhaps for the whole of people’s working lives.
Kirsty Blackman (Aberdeen North) (SNP)
Does the Secretary of State regret saying that whether the two-child cap on benefits causes harm is “open to debate”?
Pat McFadden
No, I do not regret anything I have ever said on this issue. All along in this debate, there has been an attempt to divide workers from non-workers—
Wendy Morton (Aldridge-Brownhills) (Con)
On that point, will the Secretary of State give way?
Pat McFadden
I shall if the right hon. Lady shows a little patience.
Around 60% of the families affected by the current policy are in work, and of those who are not working, a significant number are affected by serious health conditions or caring responsibilities—circumstances in which any of us could find ourselves. As I have said, this was never really about work, decisions about family size or saving money; it was political through and through. It was children who paid the price, with 300,000 more of them going into poverty as a result.
Sir Desmond Swayne
It appears that those 300,000 were in poverty a year ago, but the Secretary of State has allowed that to persist till now. What has changed? It is not the fiscal situation, and it is not any room in the benefits budget. This is the Labour equivalent of Project Save Big Dog, is it not?
Pat McFadden
Timing matters, and if the right hon. Gentleman shows a little patience, I will tell him exactly why we have done this in the timeframe that we have.
All the policy did was force more children into poverty, alongside the Conservatives’ other key welfare measure of trapping the sick out of work. Even some voices on the right recognise the damage that this policy did. Former Tory Welfare Minister Lord Freud described it as “vicious” and said it had been forced on the Department for Work and Pensions by the Treasury at the time, and the former Conservative Home Secretary and new recruit for Reform, the right hon. and learned Member for Fareham and Waterlooville (Suella Braverman), has said,
“Let’s abolish the two-child limit, eradicate child poverty for good”.
I do not know whether that is still her position—we will find out at tonight’s vote—but it seems that the party she has now joined wants to restore the two-child limit. Reform is importing not just failed Tory politicians, but failed Tory policies.
Between 2010, when the Conservatives came into office, and the summer of 2024 when they left it, the number of children in poverty had risen by some 900,000. That is something to ponder as Members on the Opposition Benches have their debate about whether or not Britain is broken. If it is, who was responsible? Who designed the welfare system that they tell us on a daily basis is broken? They did. Who broke the prisons system that we have had to rescue? They did. Who shook international confidence in our economy and its key institutions? They did. This is the inescapable problem with the Conservatives’ current position: an attack line that says, “We trashed the country and left you with a terrible inheritance,” might just not be the winning argument they think it is. Let them have their debate about whether Britain is broken while we get on with the task of fixing what they left behind.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
As my right hon. Friend has described, this is a crucial policy, but it is a downpayment on tackling other failures of the former Government, including the poor-quality and overcrowded housing that puts too many children in poverty of situation. Is he proud, as I am, that we now have a Labour Government who are tackling these issues and getting our children where they should be?
Pat McFadden
My hon. Friend is right, and the point she makes is that we also tackle these issues piece by piece and over time.
I turn now to the question that people have asked: “Why not do this right away?” Here is the difference between government and opposition. The truth is that in opposition, it is easy to tally up everything that is wrong with the country and promise to reverse it, but a winning manifesto has to be more than a list of what is wrong.
Pat McFadden
Not at the moment. We spent plenty of time in opposition writing those lists—we had many years to do it—only to see them turn to dust on the morning of an election defeat. Good intentions were written off by the voters because the hard yards of winning their trust on the essentials of exercising power had not been done. Change comes only by earning the trust that is essential to victory, and it is because we did that that we are able to sit on the Government Benches and change anything at all, whether for children, low-paid workers or anyone else.
Our first job when we came into office was to stabilise the economy after the irresponsibility and chaos of the Tory years, and even after my right hon. Friend the Chancellor had done that, change still has to be paid for. That is why she was right to spell out at the Budget that this policy can only be introduced now, and can only be funded through a combination of savings from fraud and error in the benefits system, changes to the Motability scheme, and reform of online gambling taxation.
Wendy Morton
I am grateful to the right hon. Gentleman for giving way. I have tried my best to be patient, as he indicated I should be, but surely he agrees that there is only one way for him to pay for these increases, which is taxes?
Pat McFadden
My right hon. Friend the Chancellor spelled out at the Budget how this was going to be paid for. If the right hon. Lady did not hear me the first time, I am happy to repeat myself: savings from fraud and error in the benefits system, changes to the Motability scheme—which the Conservatives did not make when they were in power—and reform of online gambling taxation.
It was also right that we took the time to do the work on the child poverty strategy, which was so ably co-chaired by my right hon. Friend the Secretary of State for Education. That work meant that the strategy included wider policies on childcare, school holidays help and a number of other measures, as well as those that are in today’s Bill.
The Bill is about ensuring that children have the chance of a better life. It will mean 450,000 fewer children in poverty in the last year of this Parliament and, taken together with the other measures in the child poverty strategy, will lift an estimated 550,000 children out of poverty. This Labour Government will reduce child poverty, just as the last Labour Government did.
Ann Davies (Caerfyrddin) (PC)
I am glad that the UK Government are finally taking action on child poverty and removing the two-child cap on universal credit—a policy, of course, that Plaid has opposed from the start. However, more than one in five households affected by the two-child limit will not benefit because of the cap on benefits. Does the Secretary of State agree that the Government should now lift the benefit cap, so that every eligible household and every eligible child receives the full support this Bill sets out to provide?
Pat McFadden
I remind the hon. Lady that the benefit cap does not apply to families who are in work or who have a disabled child. It is in place, and that approach balances support and fairness without undermining incentives to work.
The Bill removes the need for the vile policy known as the rape clause, which is a feature that we inherited from the Conservative regime. Women will no longer have to relive terrible experiences to get support for their child. For the families who will benefit, this measure will help all children, regardless of the circumstances of their birth. My understanding is that it is the current position of the Conservative party to bring back the limit, and therefore to bring back that provision. Perhaps the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), can clarify that when she comes to speak, and perhaps Reform Members can clarify their position when they contribute to the debate.
The policy change made by this Bill is not just about the redistribution of money—it is not just about placing children on the right side of an income line in a spreadsheet. It is about changing the story of children’s lives. That is an investment worth making for the whole country. It is about giving children a genuine shot at life, so that they can do well at school, stay healthy, and contribute to their country and community as an adult. That is harder when children grow up poor, as they are less likely to do well at school, with less than a quarter of children in the lowest-income households getting five good GCSEs.
By the age of 30, those who grew up poor are likely to be earning about 25% less than their peers. They are four times more likely to experience mental health problems, with growing consequences for worklessness and for the benefits bill that we are seeing in today’s system. They are more likely not to be in education, employment or training—those numbers grew rapidly in the final years of the Conservatives’ time in power, and they did nothing about it. That is why we are reforming the system by changing the incentives of universal credit, ending a situation in which the sick have been signed off and written off, and increasing support to get disabled people into work. As Sir Charlie Mayfield estimated in his recent “Keep Britain Working” report,
“Someone leaving the workforce in their 20s can lose out on over £1 million in lifetime earnings—with the state incurring a similar cost”
to support them. These are the kinds of consequences that were not thought through when the Conservatives’ policy was introduced, but it is essential that they are part of our debate about changing it.
Investing in children’s potential today is about changing lives through better educational attainment, improved health and a better chance of a decent job. The most radical thing that a Government can do is enable people to change their own story. Our ambitions should go well beyond providing financially for people; they should be about providing the platform for that change, so there is a direct link between this Bill and the other things we are doing. We are providing more help with childcare for working parents in order to make work pay and to ease the choice between looking after children and taking up a job. That is in their interests and in the national interest—why should we lose the talents of those who have children?
The youth guarantee will help the young unemployed with training, work experience and ultimately a subsidised job, so that they know the pride and purpose that comes with having work. That is in their interests and in the national interest. We have more apprenticeships for young people, stopping the 40% decline in youth apprenticeship starts over the last decade. That is in their interests and in the national interest. Better life chances are part of the battle against the human and social cost of more and more young people being signed off sick and declared unfit for work. All these things will become more urgent as the population ages and we need more young workers to support the country. A better start in life is a bond between the generations. A good childhood is in all our interests and in the national interest.
This debate is part of a wider one in politics. In this debate and in others, we have seen a politics of division in this country that wants to set person against person and group against group, and I believe we are only in the foothills of it. We will see more of this division, both home-grown and imported from overseas, becoming ever harsher as it seeks to use rage to fuel itself and to win support. That is the battle to come, not just on this issue, but much more widely—and I want to make it clear today that we set ourselves against that politics, and make a clear and explicit choice to reject it.
Anger and division are not the fuel upon which this country’s future must be built. They will produce nothing. They will solve nothing. Indeed, they will only perpetuate the chaos in the country that people are so tired of. Instead, we embrace the mantle of hope to offer a chance and not a grievance—a society where we help each other up, rather than try to tear each other down, and where we say to those born into poor circumstances, “We will help you be the best you can be, not through altruism, but because we need you, we believe in you and we want your contribution.” That is in our interests and in the national interest. This is the fight to come between these two kinds of politics; that is what the change in this Bill is all about, and it is why I commend the Bill to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Jobs Guarantee
Pat McFadden Excerpts(1 month, 3 weeks ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
Every young person deserves a fair chance to succeed. When given the right support and opportunities, they will grasp them. But for too long young people have not had access to the opportunities and support they deserve. Nearly a million young people are not in education, employment or training, locking them out of meaningful work, denying employers the workforce of the future and holding back economic growth.
At autumn Budget 2025, we announced an £820 million funding package to overhaul support and give a generation of young people a bright future through the youth guarantee. This investment will break down barriers to opportunity and ensure every young person can access the support they need to earn or learn.
Today I am pleased to announce the launch of the jobs guarantee grant application window for phase one, a central element of the expanded youth guarantee.
The jobs guarantee will provide every eligible 18 to 21-year-old who has been claiming universal credit and looking for work for 18 months a guaranteed, fully subsidised six-month paid job. This will include wraparound employability and in-work support to help participants succeed in their roles. The aim is to support young people in taking that crucial first step into sustained employment. Once fully rolled out, the programme is expected to support around 55,000 young people over the next three years, contributing to the Government long-term ambition to increase employment and reduce long-term youth unemployment.
We know that young people need support quickly and that is why we will begin the delivery of phase one from spring 2026 with over 1,000 job starts across six areas with some of the highest need: Birmingham & Solihull, East Midlands, Greater Manchester, Hertfordshire & Essex, Central & East Scotland, South-west & South-east Wales. This will be followed by a national roll-out of the jobs guarantee across Great Britain, later in 2026.
The application process for this stage of the jobs guarantee grant will be open from today until 28 February. Details can be found here: https://www.gov.uk/government/publications/jobs-guarantee The Department for Work and Pensions will award grants to selected delivery organisations in the six defined geographic areas. Successful applicants will administer the grant on behalf of DWP, bringing their experience of the local labour market to source suitable jobs and match young people to roles. They will also use their expertise to provide ongoing support to young people while they are on the scheme.
I would also like to thank the more than 60 employers who have already committed to providing jobs for participants of the scheme, including E.ON, JD Sports, Tesco and TUI. Once delivery partners are in place, they will work with employers to help secure these employment opportunities, with support from DWP for those large employers with a national footprint.
[HCWS1290]
Women’s State Pension Age Communication: PHSO Report
Pat McFadden Excerpts(1 month, 3 weeks ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
In November, I informed the House that the Government would make a new decision in response to the Parliamentary and Health Service Ombudsman’s report into the way changes to the state pension age were communicated to women born in the 1950s. This followed relevant evidence coming to light as part of legal proceedings challenging the original decision announced by my predecessor in December 2024. We have now concluded the process to make a new decision and are placing copies of the Government’s full response in the Libraries of both Houses.
Before I turn to the substance, I think it is important to be clear what this decision and statement is about, and what it is not about. There are legitimate and sincerely held views about whether it was wise to increase the state pension age, and in particular whether the decision taken in 2011 by the coalition Government to accelerate equalisation and the rise to the age of 66 was the right thing to do. But the issue we are discussing today is not the merits or otherwise of past policy decisions about the state pension age. What the ombudsman investigated was how changes to the state pension age were communicated and whether within a specific and narrow time period there was maladministration and injustice—and if so, whether that warrants compensation.
In March 2024, the ombudsman published its final report. As with so many other issues, the previous Government left the report on their desks, issued no response, took no decision, and left it to this Government to respond. In December 2024, the then Work and Pensions Secretary, my right hon. Friend the Member for Leicester West (Liz Kendall), set out the Government’s response, having considered all the information provided to her.
However, given that relevant research from 2007 about the effectiveness of sending letters subsequently emerged that had not been provided to my right hon. Friend, I wanted to ensure that the right and proper process was followed to take account of this alongside the information previously considered. Of course, I asked the Department not just to consider the 2007 report, but to undertake new searches as part of an extensive review of relevant historical documents to help inform the new decision.
We accept that individual letters about changes to the state pension age could have been sent earlier. For that, I want to repeat the apology that my right hon. Friend the Member for Leicester West gave on behalf of the Government. I am sorry those letters were not sent sooner. We also agree with the ombudsman that women did not suffer any direct financial loss from the delay.
However, the question is about the impact of the delay in sending those letters. The evidence taken as a whole, including that from 2007, suggests that the majority of 1950s-born women would not have read and recalled the contents of an unsolicited pensions letter, even if it had been sent earlier. Furthermore, the evidence also suggests that those less knowledgeable about pensions—the very women who most needed to engage with a letter, and for whom it might have made a difference—were the least likely to read it. An earlier letter would therefore have been unlikely to make a difference to what the majority of women knew about their own state pension age. Indeed, the 2007 report concluded that automatic pension forecast letters had only a negligible impact on pensions knowledge and planning, and the Department stopped sending them.
The evidence shows that the vast majority of 1950s-born women already knew that the state pension age was increasing thanks to a wide-range of public information, including leaflets, education campaigns, information in GP surgeries, and information on TV and radio, in cinemas and online. To specifically compensate only the women who suffered injustice would require a scheme that could reliably verify the individual circumstances of millions of women, including whether someone genuinely did not know that their state pension age was changing and whether they would have read and remembered a letter from many years ago and acted differently. It would not be practical to set up a compensation scheme to assess the answers to those questions conclusively.
A flat-rate scheme would cost up to £10.3 billion and would simply not be right or fair, given that it would also be paid to the vast majority who were aware of the changes. I have heard calls for compensation aimed at lower-income pensioners, and we have focused in the past 12 months on raising pension credit uptake, but in the context of this decision, a scheme focused on any single income group still would not specify who may or may not have suffered injustice. That is why, in taking this new decision, we have come to the same conclusion on compensation as that announced by my right hon. Friend the previous Secretary of State in December 2024.
I know that many people feel that the state pension age should not have gone up in the way that it did; indeed, Labour argued against the 2011 policy decision put in place by the Conservative-Lib Dem coalition that accelerated the increase. However, I repeat what I said at the start of my statement: that is a different issue to the one the ombudsman investigated and that I am responding to today, which relates to the communication of changes in the state pension age and, narrowly, to a delay in sending letters over a relatively short period.
The changes from 2011 underline the importance that decisions on the state pension age carry and the impact they have on people’s lives, and I take seriously the need to weigh carefully any future changes. That is why, together with the ombudsman, the Department has been developing an action plan for the future. Work on that had stopped pending today’s decision, but I can confirm that it will now resume.
It also underlines why we are determined to ensure that all pensioners on lower incomes, the majority of whom are women, have a better life in retirement, just as Labour has done in the past—from the Wilson Government, who first formally linked the uprating of pensions to the higher of earnings or prices, to the previous Labour Government, who lifted 1 million pensioners out of poverty. Labour introduced pension credit, which is vital in topping up the incomes of the poorest pensioners, with women consistently making up the majority of those benefiting since we first introduced it in 2003. This Government are ensuring that more pensioners get that extra income with the biggest ever campaign to increase take-up, which saw tens of thousands more pension credit awards in the year up to November than in the previous year.
In addition, our commitment to the triple lock for this Parliament means that women will see their state pension rise by up to £575 this year, with incomes up to £2,100 a year higher by the end of the Parliament. Indeed, overall spending on the state pension is set to be more than £30 billion higher a year by the end of this Parliament than in 2024-25. We are also putting record investment into the NHS, meaning that thousands more pensioners are getting the operations and treatment that they need, rather than being left in pain on waiting lists. This is the positive difference our Government are making.
I believe it was right to review the evidence and that, having done so, we have made the right decision based on due process and the body of evidence. At the same time, looking to the future, we are taking important steps to support women in retirement and help them to build a better life for themselves and their families. I commend this statement to the House.
Mark Garnier (Wyre Forest) (Con)
I thank the Secretary of State for advance sight of his statement.
As constituency MPs, we will all have met many campaigners from the Women Against State Pension Inequality campaign group—the WASPI women. I am sure that many Members will have received a large amount of correspondence on this matter recently. If they are anything like me—I have had 150 emails recently about it—they will really feel the strength of opinion out there. It is safe to say that both our constituents and us as Members of Parliament have been left wanting by this Government.
In December 2024, the previous Secretary of State, the right hon. Member for Leicester West (Liz Kendall), told this House that the Government would not compensate these women. Let me remind colleagues what her rationale was. She said that
“the Government do not believe that paying a flat rate to all women, at a cost of up to £10.5 billion, would be a fair or proportionate use of taxpayers’ money”—[Official Report, 17 December 2024; Vol. 759, c. 168.]
She also tried to argue that they could not afford it because of holes in the Government finances. However, as my hon. Friend the shadow Secretary of State for Work and Pensions rightly said:
“Government compensation should always be based on what is fair and just.”—[Official Report, 17 December 2024; Vol. 759, c. 170.]
Before getting into government, it seems that Labour MPs did think that an injustice had been done. Let us remind our colleagues of what members of this Government have said in the past. The Prime Minister himself called this situation “a huge injustice”. The Deputy Prime Minister and Justice Secretary slammed the “cliff edge” that he said faced WASPI women. The Foreign Secretary said that she was
“fighting for a fair deal for the WASPI women.”
The Chancellor of the Exchequer claimed to “want justice for WASPI women”. Even the current Secretary of State for Work and Pensions got in on the action, putting out a social media post with the caption:
“MPs campaigning for a better deal for WASPI women.”
It is therefore no wonder that the WASPI women, who were promised so much, are so angry; the people who used to stand beside them have now turned against them.
If the Government really believed that these women had faced a great injustice, they would have found a way to compensate them. They could have avoided a deal with Mauritius that will cost us all £35 billion, but they chose not to. They could have found savings on our country’s benefits bill, but they chose not to. They had 14 years to prepare for government and are messing up by doing nothing.
That brings us to the statement from the Secretary of State today. Is it not convenient that he should choose a sitting day when most MPs are not here? It is almost as if he does not want to hear the criticism from his own Back Benchers. In reality, all that the Secretary of State is doing is announcing that nothing has changed and that the Government will not be compensating WASPI women.
I have a few questions. Given that the Secretary of State previously campaigned for a better deal for WASPI women, does he think that today’s announcement provides that better deal? In his statement, he tried to argue that this issue is somehow the Conservatives’ fault. However, he forgets that the maladministration that the previous Secretary of State apologised for was committed under the last Labour Government, before 2010—the ombudsman’s report made that explicit. Can the Secretary of State hold up his hands and take accountability for those mistakes?
This is a really interesting point. The Secretary of State chose to mention the triple lock in his statement and to say that the state pension will go up by up to £575 this year, with incomes expected to rise by up to £2,100 a year by the end of this Parliament. We all know that there is no cap on the triple lock. [Interruption.] There is no cap on it, but he made the point that that would rise by “up to” £2,100 a year. Is he implying that the triple lock is about to be capped? Will he confirm that he is apparently U-turning on the Government’s policy on the triple lock by imposing a cap?
Is it not just a fact that, frankly, this Government resemble a bunch of joyriders pulling handbrake turns in a Tesco car park, when Labour should be a serious party of government? Their Back Benchers keep being marched up the hill, only to be told to march down again. The Government even take the Whip away from them for having a conscience, only to tell them later that Ministers are proud to support policies for which support was only recently a sackable offence. Does the Secretary of State really think that this constant back and forth is fair on WASPI women? I look forward to his comments.
Pat McFadden
I am grateful for the hon. Gentleman’s questions. He is right that there has been a forceful and energetic campaign, which has resulted in lots of emails and contact with Members across the House, but his Government had this report from the ombudsman. They could have taken a decision before the election, but they chose not to, as with so many other issues. And perhaps the ombudsman had an inkling of how unlikely it would be to get a decision from the previous Government, because the ombudsman made the recommendations on remedy to Parliament rather than to his Government.
The hon. Gentleman refers to Labour, to me and to other MPs on this side of the House, and I remind him that we voted against the acceleration in the rise of the state pension age that was put through by the coalition Government.
On re-examining the decision, I thought it was right to do so, to make absolutely sure that we got this right, considering not just the 2007 report but a whole range of evidence and documents. I have repeated my predecessor’s apology for the maladministration found by the ombudsman. There is no change in our position on the triple lock, and the figures quoted reflect the estimates of the Office for Budget Responsibility throughout the Parliament.
Barry Gardiner (Brent West) (Lab)
I am sure my right hon. Friend appreciates the enormous disappointment on this side of the House. Only two years before the general election, our now Prime Minister spoke in favour of a just settlement for WASPI women. I acknowledge that my right hon. Friend says that this was not in the manifesto on which we all stood, and that we did not make that promise, but he will recognise the real sense that an injustice has been done to these women. Today has not remediated that.
Pat McFadden
I am grateful for my hon. Friend’s question, and I understand what he says, but it is also important to consider exactly what is at issue here. Many people are unhappy with the rise in the state pension age and the decision to equalise it, and this decision does not deal with that. The decision deals with the specific issue of how it was communicated over a specific period of time. It is really important to separate those two things. I believe that, on that ground, we have considered it very carefully—not just once but twice—and given it due and proper process. It is right to apologise for the maladministration, but I believe the decision we have taken on remedy and compensation is the correct one.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Pat McFadden
The hon. Member is certainly right about my allegiance to both Celtic and Bruce Springsteen, but there is no illusion about the position of the Liberal Democrats. He says, with a tinge of regret, that he wishes that they were in government, but they were in government —and that is the point. In 2011, they took the decision to accelerate the equalisation and raising of the state pension age, so they were in a position to take decisions on it.
At the heart of this issue is something different: how the decisions were communicated and whether people could have done something differently. The hon. Gentleman asks about engagement with the ombudsman. I have, of course, looked at the report, and the current ombudsman recently met the permanent secretary. As I said in my statement, we will pick up the work that was paused on the action plan so that in future when we consider the state pension age we fully consider not only the policy but all aspects of communication and the period of warning—things which were distinctly not done when the decision to accelerate the state pension age was taken by the coalition Government.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
The Secretary of State knows just how disappointing many will find this statement, particularly the WASPI women who feel so strongly the injustice that they have suffered. I appreciate that the he has set out the reasons in principle and in practice and explained how the Labour Government will support low-income pensioners, but I want to talk about the personal aspect. I suspect that the Secretary of State, like me and many other Members, started full-time work in his twenties that was not physically arduous. I think of a constituent of mine who started work aged 15—hard, physical work—and found herself required to continue working many years after she expected to have retired and as her health deteriorated. What help and support can the Secretary of State offer her?
Pat McFadden
My hon. Friend is right to say that as the state pension age has gone up, the way people have been affected is influenced by the kind of lives they have led and the toughness of the work that they have done. But that argument is about the raising of the state pension age, and while I appreciate that a lot of the correspondence has been about that, it is a different issue from the one that the ombudsman was looking at. In terms of our policy, the exactly reason why we have pension credit is to help lower-income pensioners; it is why we put it in place in 2003, and it is why we have put extra effort into making sure that the benefit is taken up by those who are entitled to it.
Mark Pritchard (The Wrekin) (Con)
The Secretary of State is a fellow west midlands Member of Parliament, and he will know Shropshire very well. Many WASPI women born in the 1950s from my constituency will be very disappointed by today’s announcement. He talks about miscommunication and maladministration but, of course, says little about compensation, which means that the injustice continues. Could he give a little more detail on how the action plan will assuage some of the anger that will no doubt have come about as a result of this disappointing non-announcement? What real help can be given to WASPI women in different ways, including those who do not qualify for and are not entitled to pension credit?
Pat McFadden
I am grateful to my west midlands colleague for his question. He talks about disappointment. The shadow Minister could have, in the time allocated to him, promised to take a different decision were the Conservatives ever to return to power. They had the chance to take a different decision when they were in power, but they chose to not even respond to the report let alone outline what the decision might be.
On the action plan and specifically what it will cover, two things are at the heart of it: communications and the handling of complaints. If we are to raise the state pension age in the country over time, it is important that we get the communications right. That is what we want to do, and I will work with the ombudsman going forward.
Jon Trickett (Normanton and Hemsworth) (Lab)
There are 300,000 WASPI women in Yorkshire and 6,500 in my constituency. In Yorkshire we believe that politicians should say what they mean and mean what they say. Labour opposed the proposal when it was first introduced. Our leading spokesman continued to say that Labour wanted to and would deliver justice to the WASPI women. This is not justice.
For the many women in my constituency and elsewhere who I have met and discussed this issue with, the idea that there would be an accelerated process of getting to a higher pension age came like a bolt out of the blue. They had no idea that it was coming so quickly. It disrupted families’ plans and the financial structures of their lives. It was a disgrace, and it was introduced by the Conservatives and Liberal Democrats. The Government still have a chance to put this right, and I say this to the Minister: he has not heard the end of this problem or of the voices of the WASPI women.
Pat McFadden
My hon. Friend is right to remind the House that we were opposed to the acceleration. We voted against it and opposed many policies of the coalition Government and the Tory Governments who were in power over the past 14 years. He is also right to say that five years’ notice was not enough; that is why we voted to oppose it, and when it comes to our responsibilities now, it is why we have put such stress on looking after pensions properly and maintaining the value of the basic state pension. I outlined what that would mean for this Parliament in my statement. For poorer pensioners, we are making sure that there is maximum take-up of pension credit so that people can access the benefits to which they are entitled.
John Glen (Salisbury) (Con)
I welcome the Government’s apology for the maladministration and the Minister’s clarity today, but many Salisbury WASPI women will be very disappointed by the decision. Could the Secretary of State say a little more about what options he looked at to compensate the poorest, most vulnerable of the WASPI women? I recognise that the enormous cost would be too much overall, but what options did he pursue? When I was in government, the option to withdraw the winter fuel payment was one that I resisted, because of the impracticalities of doing it fairly. What options were put to him, and could he not have compensated the poorest? I think many would have been sympathetic to that.
Pat McFadden
I have great respect for the right hon. Member. He will have considered some of these issues in government because of his long service as a Treasury Minister. I like the right hon. Gentleman a lot, but I have to say that he could have taken decisions on this when the Conservatives were in power.
On the right hon. Gentleman’s question about the lowest-income pensioners, I repeat what I said in my statement: the problem with any flat-rate scheme is that it will compensate people who knew about the state pension age rise as well as those who did not. The reason we have pension credit is precisely so that pensioners who are living on particularly low incomes have access to another benefit. We introduced pension credit back in 2003, and since we came back into office in 2024 we have put extra effort into making sure that it is taken up. That has resulted in tens of thousands of additional pensioners having access to pension credit.
Liz Twist (Blaydon and Consett) (Lab)
I should declare an interest as a 1950s-born woman. This is a disappointing statement, and I can only associate myself with the remarks made by my hon. Friend the Member for Brent West (Barry Gardiner), which I do not always do. I take the opportunity to thank all the WASPI women who have been campaigning and working so hard on this issue with many of us. How has this decision been communicated to the WASPI group?
Pat McFadden
I agree with my hon. Friend that, as I have said, the WASPI women have run an energetic, sustained campaign that has made a big impact on Members. We can see that from the questions being asked. On the communication, as soon as it became clear that there was relevant evidence that had not been shown to my predecessor, I decided to retake the decision, looking not just at that but at a wider body of evidence. I came to the House in November to inform Members that I would do that. I also told Mr Speaker and the House that when I had gone through the process and reached a conclusion I would come back at the earliest opportunity and announce those conclusions. That is exactly what I am doing today.
Tessa Munt (Wells and Mendip Hills) (LD)
The ombudsman’s ruling in March recommended that some women should get a payout and an apology. Now the WASPI women in my constituency have another apology, but they have not received a penny in compensation for the maladministration found by the ombudsman. Why have the Government chosen to accept one half of the recommendations—I think it is probably the easy half—but not the other? At £1,000 to £2,950 for each woman, it is hardly a high cost for justice in the grand scheme of Government funding considerations.
Pat McFadden
As I say, we accept the finding of maladministration. On the difference earlier communications would have made, particularly to those who knew the least about the increase in their state pension age, all the survey evidence in the round suggests that a majority of women knew the state pension age was increasing. The hon. Lady minimises the up to £10 billion that it would cost for a compensation scheme. I do not want to be excessively partisan today, but it is the easiest thing to come here every day to call for billions for this and billions for that and then oppose all the revenue-raising measures that have to be put through in any Budget. This is not a situation where we should do that and simply add to that pattern. It is a substantial amount of money. If we were to go down that road, we would end up compensating a significant number of women who knew that their state pension age was increasing and to whom no injustice has been done.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
The Secretary of State said that the evidence shows that the vast majority of 1950s-born women already knew that the state pension age was increasing. I, like my hon. Friend the Member for Blaydon and Consett (Liz Twist), am also a 1950s-born woman. Does the Secretary of State honestly think there would have been such a massive campaign over all these years by WASPI women and their supporters if they believed that that was true and that they knew about their pensions? With particular reference to the 1954 women who were treated so unjustly by the coalition Government, surely the Secretary of State believes that they deserve compensation for the terrible shock they received back in 2011.
Pat McFadden
A decision document relating to the evidence that I have considered has been placed in the Library of the House, which sets all that out together with various surveys, all of which are in the public domain and which were considered in the course of my reaching the decision. I think the campaign is understandable because of the steep acceleration that was legislated for by the coalition Government. We opposed that at the time. The lesson for the future is to give good notice and predictability about rises in the state pension age. That is at the heart of the action plan that we are working on with the ombudsman.
Kirsty Blackman (Aberdeen North) (SNP)
The Secretary of State’s colleagues stood with WASPI women holding boards saying, “We support the WASPI women” and “We support compensation for the WASPI women”. He now stands at the Dispatch Box holding his hands up and saying, “I am very sorry that the previous Administration forgot to send out a letter, but we are not going to do anything about it because it would not have made a difference anyway.” Has he listened to the voices of WASPI women who have come to every single one of us and said, “I did not get that letter”? They said, “I did not know that the state pension age was increasing and I found myself”—as the hon. Member for Newcastle upon Tyne Central and West (Dame Chi Onwurah) said—“having to work in a physical job far longer than I ever expected because I was not given notice.” Is that the change that the Labour Government promised when they came in last year?
Pat McFadden
I will defend to the hilt our protection of the state pension, our increase in the state pension of £575 for the new state pension from April and our extra help for poorer pensioners. There was a wide range of communications about this matter. Letters are one, but not the only, part of that. When we take into account the survey evidence as a whole, we find that most people knew that the state pension age was increasing. If the hon. Lady wants to pledge compensation in some way, she is entitled to do that, as I said to the hon. Member for Wells and Mendip Hills (Tessa Munt). We have looked at the evidence in the round. I repeat the apology for the maladministration, but I think we have reached the right decision today.
Patricia Ferguson (Glasgow West) (Lab)
My right hon. Friend is a very serious individual and his statement was very serious. It helpfully enumerated that the majority of pensioners on lower incomes are women and that women make up the majority of those depending on pension credit. The anger that WASPI women feel about the steep increase in age is very understandable. Many of those women paid what my mother used to call “the small stamp”, which makes their situation even more vulnerable. I accept that the Secretary of State’s statement is largely about the ombudsman’s decision. Will he indicate what conversations he has had with the ombudsman, specifically about why he made that recommendation? Will he also tell the Chamber what communication he has had with the WASPI women about his decision?
Pat McFadden
We are often encouraged to make our statements to Parliament first and that is what I have done. When I announced in November that I was retaking the decision, I made that statement to Parliament first and pledged that when I had reached a conclusion I would come back to announce it in Parliament first. That is the right way to communicate this decision.
My hon. Friend talked about women who paid “the small stamp”. That is right, and that is why we have moved away from the old system to a new state pension for the future. For the majority of pensioners on lower incomes, I stress again the importance of pension credit and our efforts to make sure that those pensioners who are entitled to it, the majority of whom are women, take advantage of their entitlement and make the application. That is what it is there for: to help lower-income pensioners.
Rachel Gilmour (Tiverton and Minehead) (LD)
I have thousands of WASPI women in my constituency, which is already very deprived. I cannot express how angry and disappointed they feel today. I am afraid that I will have to use strong language: this is simply gaslighting by this Labour Government. They know full well that it was not about whether the letters were sent earlier; it is about whether they were sent at all. Does the Secretary of State not need to accept that point?
Pat McFadden
It is right to focus on exactly what this is about and what it is not. We opposed the acceleration of the change to the state pension age. The ombudsman looked at the specific issue of when letters were sent over a time period, so I feel that I have been accurate in the statement I have made today. If we go back to the 2011 decision, the lesson for the future is that increases in the state pension age should be announced in good time, so that people have the chance to prepare. That is a policy decision; that is not the specific decision about communication that the ombudsman examined.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
This Government have rightly taken action for Hillsborough victims and sub-postmasters affected by the Post Office scandal, and on the mineworkers’ pension scheme, yet this situation seems to have been put in the “too hard to deal with” box. Why does my right hon. Friend think that these women should accept this outcome, and why is it always women who seem to get the rough end of the deal?
Pat McFadden
I know that the equalisation of the state pension age has produced quite a lot of opposition. The 2011 decision was too quick; that is why we opposed it at the time. On the issue of compensation to which my hon. Friend refers, if we were to compensate everyone in this age group, we would end up compensating a significant number of people who knew that their state pension age was increasing. We do not think that would be the right and fair thing to do, and that is why we have reached the conclusion that I have announced.
Jim Shannon (Strangford) (DUP)
On behalf of the 5,000 WASPI women in my constituency, I must register my deep concerns about the way that people are hiding behind the ombudsman’s report, and saying, “No, we can’t help the WASPI women.” The WASPI women back home speak to me every week about this subject. They ask, “Jim, what’s happening now? Where are we?” Unfortunately, the most vulnerable people, including the elderly and disabled people who have waited all this time, have nothing; I need to put that on the record. Some who are listening to the case that the Secretary of State has made will ask, “What does that actually mean?” The WASPI women need some explanation; is there some way of giving them that?
The last point the Secretary of State made was about the pension uplift, pension credit, and how they can help. Can I suggest one other way that the Government could help those people? It would not be in any way a fallback case, but it would be something. When it comes to self-assessment and letters, WASPI women and those over a certain age find it incredibly hard to go online. There has to be some methodology, so that elderly people can know that every penny they get will not be lost in tax beforehand. There must be a methodology and a system, rather than elderly people having to go online, which they cannot do.
Pat McFadden
I remind the House that by the end of this Parliament, due to our commitment to increase the basic state pension, we will be spending an estimated £30 billion a year more on the state pension. That is testament to our commitment to maintaining the value of the basic state pension and ensuring that people have a good and decent retirement. That is, of course, for the hon. Member’s constituents as much as for any other Members’ constituents.
On the full reasoning behind the decision, there is a full decision document, which I have deposited in the Library of the House today. That is available to the hon. Member. On online and face-to-face services, he is right that it is important that when people access a benefit, they can do so through a range of channels, so that people do not lose out for the reasons that he gave.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
I thank my right hon. Friend for his statement, and the repeated apology on behalf of the Government, but like many Labour Members and other Members across the House, I have long supported WASPI women. I commend the WASPI women in west Lothian and Falkirk for their perseverance over many years. I have spoken to several women who have experienced significant financial hardship and emotional and physical strain, and I share their undoubted disappointment today. Has he considered the impact of the decision on perceptions and, indeed, the efficacy, of the ombudsman, which recommended that compensation be paid?
Pat McFadden
We take the role of the ombudsman very seriously. The report was fully and properly considered, but decisions on a compensation scheme of this scale will always, in the end, be for Ministers and Government to take, and I think that is the right and understandable approach.
Douglas McAllister (West Dunbartonshire) (Lab)
I have no doubt that my 6,000 WASPI women will be very angry about this decision. Will today’s announcement mean that the legal proceedings challenging the Government’s original decision will continue? What plans do we have, if any, to get round the table and try to avoid legal proceedings?
Pat McFadden
The initiation of legal proceedings is not a decision for me, and I cannot predict what will happen in future legal proceedings; that is a matter for others. My responsibility is to set out our decision to Parliament in the proper way, and I believe that in the statement that I gave in November, and in the one that I have given today, I have done that, and have given the House our reasons.
Samantha Niblett (South Derbyshire) (Lab)
In my constituency, I have 5,400 women affected by this decision. Not all of them know about it; my mum sort of shrugged her shoulders and went, “Oh, okay,” but some women do know, and they will be listening today and will be really disappointed. I was proud to put my name to, and campaign for, the brilliant support that the Government offered on the mineworkers’ pension scheme and the British Coal staff superannuation scheme—there were hundreds of beneficiaries in my constituency—but it looks like we are letting down women of a certain age, women who were so frequently on the back foot. The message sounds like, “It’s a little bit too tricky to address.” While I acknowledge that paying £10.3 billion in flat-rate payments might not be the right thing to do, is there not something we can do to acknowledge the campaigning of these women, whom we have supported for many years?
Pat McFadden
I mentioned the difficulties of a flat-rate scheme, but an individual scheme also would face great practical difficulties, which I set out in my statement. We would have to ascertain who did and did not get a letter, who can remember getting a letter, what they would have done differently, and so on. There are great practical difficulties in doing that, and there are difficulties in having a flat-rate scheme.
John McDonnell (Hayes and Harlington) (Lab)
On a point of order, Madam Deputy Speaker. This is an extremely significant matter to announce on a Thursday, when the House is usually light in attendance, with limited notice, and with a very detailed document having been lodged in the House of Commons Library. Through your offices, and through liaison with those on the Treasury Bench, can time be found over the next fortnight for a full and comprehensive debate on this issue? I know that when I get back to my constituency, there will be many very angry people who feel let down, if not betrayed. Members need the opportunity to reflect the concerns of their constituents here.
Oral Answers to Questions
Pat McFadden Excerpts(1 month, 3 weeks ago)
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Jas Athwal (Ilford South) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
Sympathies to you, Mr Speaker, on your recent injury. If you require a WorkWell appointment with a health practitioner, we recently had a national roll-out, and I am sure that we can arrange that for you.
We believe that work is good for people. That is why we are expanding youth hubs to more than 350 areas, ensuring that every 16 to 24-year-old, including those not on benefits, can access the support needed to earn or learn. That is part of our effort to take jobcentre support out of the jobcentres and meet young people where they are. It comes on top of the strengthening of our youth guarantee, backed by £820 million of investment to offer training, work experience and subsidised employment to young people who are out of work.
Paul Davies
I recently met with James Boyle, who runs Longwood FC, a grassroots football club for young people in my constituency. Longwood FC has had a really positive impact on the mental health and physical wellbeing of the young people involved, and is a great example of community-led youth engagement. I commend the Government for their investment in such youth engagement through youth hubs across the country. Can the Minister confirm the timetable for the roll-out of youth hubs in my constituency?
Pat McFadden
I congratulate my hon. Friend’s constituent James Boyle on his work running several teams at Longwood FC. That is a great example, and a number of youth hubs are located in football clubs and other sporting organisations. I understand that Huddersfield youth hub currently serves at least some of my hon. Friend’s constituents, but if he wants to explore further options, I encourage him to contact his local jobcentre so that it can work with local partners to see what is possible.
Patrick Hurley
Will the Minister join me in recognising the work of the Big Onion, which provides skills training, employment support and related services in my Southport constituency? It has supported more than 1,400 young people into careers across the wider borough. Will the Minister also set out what further support the Department can give to community organisations like that, and how its success can be shared across the whole youth hub programme?
Pat McFadden
The Big Onion is one of a number of organisations doing excellent work in trying to help young people into work. It is part of a larger partner group that the local jobcentre works closely with. In fact, one of our youth employability coaches is based with the partner group in the town hall once a week. This is exactly why we are expanding youth hubs across the country, so that we can work with other organisations to take the help where young people need it in the community.
Natasha Irons
The expansion of Department for Work and Pensions youth hubs and the roll-out of Young Futures hubs are a testament to the Government’s commitment to stand alongside young people and support them to succeed. The Centre for Young Lives has called for Government Departments to work jointly to ensure clear alignment across those hubs to prevent duplication and to stop young people falling through the gaps. What steps will the Government take to ensure that Young Futures hubs and DWP services share information effectively, align their programmes and provide seamless pathways to improve outcomes for young people?
Pat McFadden
One of my first visits in this post was to the youth hub at Selhurst Park, which is close to my hon. Friend’s constituency, as part of our partnership with the Premier League. When I was there, I heard the story of one young person, Erin, who had had a successful outcome: she increased her confidence, got a job and wanted to move on to another one. It is important that we put in place handover arrangements, particularly for 16 to 18-year-olds, to ensure a smooth transition from the earlier help they will get in a Young Futures hub to the kind of age group we deal with in youth hubs, which is more focused on employment and careers.
Jas Athwal
Two weeks ago, I had the pleasure of hosting a roundtable with the Jack Petchey Foundation, where young people from London and Essex spoke powerfully about the barriers they face, including feeling that there are fewer opportunities for them. What steps is my right hon. Friend’s Department taking to deliver on the Government’s targets for two thirds of young people to be in university or an apprenticeship, so that young people can gain the skills they need to achieve their goals?
Pat McFadden
One of the early steps we have taken is to change the way that the growth and skills levy—the apprenticeship levy—works, so that more of that money is directed towards young people. That step was necessary because there had been a 40% decline in youth apprenticeship starts over the past 10 years. If we want to focus on young people and on employment for young people, we need to ensure they have a good chance of getting an apprenticeship start.
Sir Ashley Fox (Bridgwater) (Con)
I wish the Secretary of State well with this initiative, but does he share my concern that as his Department seeks to reduce youth unemployment, the Chancellor is doing everything she can to increase it, with her jobs tax increasing unemployment? Of the 170,000 payroll jobs lost since the election, until November 2025, some 45% involved young people. This Government have cost young people 150 jobs per day since they came into office. How does his scheme cope with that?
Pat McFadden
The hon. Member will be aware that 513,000 more people are in work compared with this time last year. He referred to the Chancellor. I am grateful to the Chanceller for the £820 million funding for the youth guarantee, which will bring training help to 300,000 young people and provide subsidised employment for those young people who have been out of work for 18 months. That is important to get young people into the habit of the discipline, pride and purpose that comes with having a job.
Calum Miller (Bicester and Woodstock) (LD)
Bicester is one of the fastest-growing towns in the country, yet it currently has no dedicated youth hub. In the town centre sits the former Courtyard Youth Arts Centre, which remains largely configured for youth work. The courtyard currently serves a purpose as limited office space, but could clearly be repurposed back to its original purpose. Does the Secretary of State agree with me that the funding announced in December for youth hubs should prioritise places such as Bicester, where existing public assets could be better used to deliver youth services at high value for money for the taxpayer?
Pat McFadden
I thank the hon. Member for his question. I am aware of the employment and growth generated by Bicester Village as a major retail and visitor location, and I understand his representations about having a youth hub that may be associated with that. We will look at all representations, because, as I said, we want to get the help to where people are in the local community.
Tim Farron (Westmorland and Lonsdale) (LD)
May I encourage the brilliant team at Kendal jobcentre, who already do a fantastic job reaching out to young people across the Westmorland area, but also congratulate the Secretary of State on what is a very positive initiative? Will he bear in mind, however, that in communities like mine where the distances to travel are enormous, we—and he—should be looking at having youth hubs outside the main towns such Kendal and Penrith, and look at Kirkby Stephen, Appleby, Grange and Windermere, so they are closer to the people who need those services? Will he also pay attention to, and discuss with his Cabinet colleagues, the fact that awful bus services in rural areas like ours mean that young people cannot get to appointments?
Pat McFadden
All the beautiful locations the hon. Member mentioned tempt me to offer a visit. I echo his thanks to the people who work in Kendal jobcentre and the other jobcentres around the country. The issue of transport and distances is an important one, which is why the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Kingston upon Hull North and Cottingham (Dame Diana Johnson), is pioneering the roll-out of mobile jobcentres, located in vans, that can visit a small area, one or two days a week.
Rebecca Smith (South West Devon) (Con)
It strikes me as odd that rather than extolling the virtues of the Government’s flagship youth guarantee, we have had a number of Labour MPs asking about youth hubs. Is that because it is easier to defend the setting up of some youth hubs than feeding back on the roll-out of the youth guarantee? Since the Labour Government came into power, businesses have stopped hiring young people in roles where they could be paying someone more experienced the same amount of money. That has meant that youth employment has gone up since July 2024, with the most recent figures showing a 103,000 increase in unemployed young people.
Does the Secretary of State agree that rather than Back Bench-pleasing schemes tinkering around the edges of the youth unemployment crisis, what we need is a strong economy with confident businesses actively seeking to employ the hundreds of thousands of talented yet unemployed young people across the country?
Pat McFadden
It is very nice to see the Conservative Front Bench here—you can never be sure these days who is going to be turning up on the opposite side, Mr Speaker. I take it from the shadow Minister’s question that she is against youth hubs, but I have to remind her that the initiative began under her Government; we have expanded it. It also seems that she is for a cut in wages, but the Government do not think that is the way to go. I remind her that more people are in work than there were a year ago; the economic inactivity figures are down; real wages are rising; and as for unemployment, it was going up for the past few years, including while the shadow Minister’s party was in power.
Mr Richard Quigley (Isle of Wight West) (Lab)
Daniel Francis (Bexleyheath and Crayford) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
It is important that the welfare state is there to support disabled people. Too often in the past, disabled people have been signed off and written off. The state has paid benefits, but has not done enough to help disabled people into work, so we are now expanding employment support for the long-term sick and disabled through, among other things, the Connect to Work programme, which will deliver £1 billion for this purpose in supported employment over the next three years. We are also supporting the “Keep Britain Working” report by Sir Charlie Mayfield, which is aimed at keeping people in work through co-operation with employers.
Daniel Francis
Too many young people with education, health and care plans are being kept on them until they are 25 years old due to the complexities involved in offering them the specialist support required to place them into apprenticeships or work placements. Will the Secretary of State therefore provide an update on the work being undertaken across Government Departments to support these young people into career paths so that they can commence their working lives?
Pat McFadden
I pay tribute to my hon. Friend for raising this issue. Ever since he came into this House, including in his maiden speech, he has made a powerful case on behalf of carers and children with disabilities. He makes the critical point that we should not give up on anyone. He is right that not all the conditions that are identified will be permanent and not all conditions should be seen as barriers to work, and that we should do everything we can to help disabled people into work.
Harriet Cross (Gordon and Buchan) (Con)
Obviously, the ability to use public transport is vital to allow disabled people or others who are less mobile to access work. Inverurie station in my constituency has just been removed from the Access for All programme, which provides mobility aids in stations—in this case, a lift will now not be installed. I completely appreciate that Access for All is not a responsibility of DWP, but access and allowing disabled people to get to work is. What conversations has the DWP had with the Department for Transport regarding the removal of Access for All funding, and does the Department share my concern that disabled people and those who are less mobile in my constituency will now have less ability to get to work on public transport?
Pat McFadden
The hon. Lady is absolutely right that mobility and public transport are essential in helping people to get to work. On the specifics of her question, the best thing that I can do is to get the Department for Transport to write to her with a proper response.
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
Businesses are a really important partner in supporting workers’ health. This is not an issue just for government. I have seen excellent examples of employers doing this, including when I visited British Airways at Heathrow in November to mark the launch of the final report of the “Keep Britain Working” review. Sir Charlie Mayfield, who wrote that report, made a number of recommendations, including the launch of a vanguard scheme, in which over 100 employers are now taking part. They are playing a leading role in developing best practice when it comes to workplace health and keeping people in work for longer, even if their health declines over time.
Nick Smith
I am delighted that we have a trailblazer pilot in my constituency. In The Times at the weekend, Alan Milburn emphasised the importance of boosting young people’s life chances. Will the Secretary of State outline how data from the pilot will strengthen delivery to keep people healthy at work?
Pat McFadden
I opened the Neath opportunity hub in south Wales in October, and I announced further funding of £10 million for the trailblazer covering that area. Alan Milburn is doing important work in reporting on the whole issue of young people in activity and work. The thing that unites these efforts is the belief that work is good for you, and that we do not want to see young people graduating from education into a life on benefits. That work brings together current activity and the future changes that we will need to make.
Jim Shannon (Strangford) (DUP)
The Secretary of State for Work and Pensions (Pat McFadden)
Last week I met Sir Charlie Mayfield, author of the “Keep Britain Working” report, to discuss progress. He reported that more than 100 employers are now onboard to act as vanguards, including British Airways, Sainsbury’s, Holland and Barrett, and a number of smaller employers. The aim is to develop a healthy life cycle of work throughout people’s careers. We are also setting up the health information and data unit that Sir Charlie recommended in his report.
Debbie Abrahams
As my right hon. Friend knows, Sir Charlie made a number of recommendations, including providing evidence of returns on investments that would incentivise more businesses to take part in preventive measures to ensure that their workers remain healthy and in work. Given the excellent network of academic centres across the UK, how will the proposed workplace health intelligence unit harness their expertise, and ensure that we are reducing health inequalities that also dampen productivity and economic growth?
Pat McFadden
My hon. Friend raises a number of issues. As I said, we are setting up the unit that Sir Charlie recommended, and I very much hope that it will work with academic expertise across the country. Her initial point about this being a win-win for employers is important, because if an employer lets someone go, they lose that experience and have to go through the effort of hiring somebody new and training them up. It is a worthwhile experience to try to help someone stay in work if they have a decline in their health over a period of time. That is good for the employee, and for the employer.
Antonia Bance (Tipton and Wednesbury) (Lab)
Baggy Shanker (Derby South) (Lab/Co-op)
The Secretary of State for Work and Pensions (Pat McFadden)
Since the new year we have had the first expressions of interest from firms that want to participate in the youth guarantee scheme. We have announced our intention to change benefit entitlement for people in mental health hospitals who have been convicted of serious violent crimes. We have announced reforms to the disability confident scheme to encourage more employers to make their workplaces suitable for disabled employees, and we have introduced a Bill to lift the two-child limit, which will have its Second Reading in the House next week.
Baggy Shanker
Whether it is at Kia, Alstom or others, apprentices in Derby are thriving at our large manufacturing companies, but we also want our small and medium-sized businesses to take on more apprentices. Will the Government set out what is being done to help smaller businesses to take on more apprentices?
Pat McFadden
I congratulate my hon. Friend and everyone involved in Team Derby on their excellent training and employment record. Around 40% of all apprenticeship starts are in small and medium-sized employers and they will benefit from the £725 million in funding that we announced at the Budget, which includes fully funding SME apprenticeships for eligible people aged under 25. As he will be aware, employers are not required to pay anything towards employee national insurance for those apprenticeships.
Helen Whately (Faversham and Mid Kent) (Con)
Under this Labour Government the number of people on benefits is soaring, with nearly a million young people not in education, employment or training, and over 700,000 university graduates are now out of work and on benefits. Many young people are putting in hundreds of job applications and getting hundreds of rejections. This Government are killing their jobs and their dreams by taxing job-creating businesses into oblivion. What does the Secretary of State have to say to those young people?
Pat McFadden
What I have to say to those young people is that the rise in graduate inactivity happened under the last Government. Economic inactivity is down by 450,000 since the last election. There is a critical problem—the hon. Lady is right—in NEET numbers, which have been rising for four years. The difference is that we are doing something about that through the youth guarantee, which has £820 million behind it, and by changing her record on apprenticeships, which saw a 40% fall in youth apprenticeship starts over 10 years.
Helen Whately
Young people hearing that answer will not be reassured, but that is no surprise—what else can the Secretary of State say? The Prime Minister is too busy blocking rivals for his job, while a generation of young people pay the price for his weakness, and so are taxpayers, who are footing a ballooning benefits bill. Now is not the time for another review, scheme or slogan; what young people want is the chance to get a decent job and to get on in life. Surely he agrees that it is time to scrap the job-killing red tape in the Employment Rights Bill and cut taxes for businesses, so that they can give young people the chance to get off welfare and into work.
Pat McFadden
People want to stand for my party, but people want to leave the hon. Lady’s, and they are doing that day by day. We want to give hope to young people. That is why we have put the youth guarantee in place and we are changing the apprenticeship system: she could have done those two things while she was in office, while the NEET numbers were rising year on year, but she utterly failed to do so.
Josh Newbury (Cannock Chase) (Lab)
Martin Rhodes (Glasgow North) (Lab)
Pat McFadden
The youth guarantee scheme will be delivered across Great Britain. That includes the jobs guarantee scheme, which I mentioned earlier. From the spring, we will provide more than 1,000 fully subsidised jobs in six areas across the UK, including central and east Scotland, ahead of the national roll-out, which will come later this year.
Ian Roome (North Devon) (LD)
Jack Abbott (Ipswich) (Lab/Co-op)
Pat McFadden
Let me congratulate my hon. Friend on the fantastic work that he has done in campaigning for the investments in and around his constituency. Major infrastructure investments such as Sizewell should be an opportunity for local employment and training and for increasing the skills of local people, and we want our youth guarantee and the changes we are making in the apprenticeship system to support those aims.
Greg Smith (Mid Buckinghamshire) (Con)
Pat McFadden
I have had a number of discussions, including with victims’ families. It is important to stress that if someone is sentenced to a psychiatric hospital, their care and maintenance is paid for by the state in any case. We therefore propose a change to the previous system that will stop the build-up of—in some cases—large sums of money in continued benefit payments.
Mike Martin (Tunbridge Wells) (LD)
My constituent Andrew co-founded Adzuna, a job search website built on artificial intelligence. Its research shows that existing AI tools could improve the DWP’s service and create 250,000 more jobs per year. However, it is reported that the new rebuild of the service is not going to include those AI tools. Can the Secretary of State give the House reassurance that we are going to incorporate those new tools into the rebuild of the service so that we get that employment boost?
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
The UK shared prosperity fund currently supports about 20% of Renfrewshire council’s employability budget. Given that that funding is due to come to an end, can my right hon. Friend outline what steps he will take to support employability services in Renfrewshire going forward?
Pat McFadden
My hon. Friend will have heard me refer to the youth guarantee being a GB-wide scheme, so it will help people in Scotland. She will agree with me when I point out that the Scottish Government have had the most generous financial settlement since devolution was introduced, and I would hope that some of that would go towards the kind of priority that she outlines.
Dr Ellie Chowns (North Herefordshire) (Green)
My constituent has been trying for more than five months to get a response from the DWP about his UC claim. Having now taken up the case, I too am experiencing unacceptable delays—it is now 15 weeks and counting, when the supposed turnaround is 15 days. Can the Minister please say what action he is taking to ensure that the DWP responds to constituents and to MPs within reasonable timescales?
Neil Duncan-Jordan (Poole) (Lab)
The Joseph Rowntree Foundation and the Trussell Trust are campaigning for an essentials guarantee that would ensure that benefits cover the necessities for living. Does the Minister agree that the welfare state should be a universal safety net, not a trapdoor?
Pat McFadden
I very much agree that the welfare state should be there to help people to change their circumstances, not just to keep them in their circumstances. I am pleased to report that we have now put in place the crisis and resilience fund, which will help people in the most desperate circumstances, and we have guaranteed its funding for the next three years.
Lisa Smart (Hazel Grove) (LD)
My constituent Harry has a learning disability, and he is so brilliant that he has not one but two jobs. His mum, Helen, is his appointee, and she is not allowed to access his Access to Work paperwork online. This means she has to print out 24 bits of paper, get it manually signed and pay to post it. That is crackers in 2026. Will the Minister undertake to look at Harry’s case and ensure that appointees, such as Helen, do not find it too hard to access Access to Work, so that we can keep brilliant people like Harry in work?
Mr Richard Quigley (Isle of Wight West) (Lab)
I wish you a speedy recovery, Mr Speaker—as I understand it, the other fellow came off much worse.
On the Isle of Wight, our NHS trust takes students who would otherwise have ended up NEET—not in education, employment or training—and puts them through a pre-apprenticeship scheme that gives them not only the skills but, more importantly, the confidence needed to start an apprenticeship and then go into work. I encourage the Secretary of State to visit the Isle of Wight to see the great work that the trust does. Will he encourage other employers to do the same thing?
Pat McFadden
I will certainly visit the Isle of Wight if I can—diary permitting. The issue he raises about confidence is crucial. When I speak to our work coaches, time and again they say that building the confidence of young people to get out there, to apply for things and to go into new and unfamiliar circumstances is a critical part of their work.
Max Wilkinson (Cheltenham) (LD)
My constituent Sam has been failed by the Child Maintenance Service. Her ex-partner hid a load of his income. She knows that because the CMS sent her the evidence but then denied it. Any reference to onward referrals is denied, and she is stuck in the bureaucracy. This is an unacceptable situation. She says that by the time the back payment comes through for her children, she will be passing it straight through to her grandchildren. It is a total disgrace. Women should not be treated like this; they should not be subjected to this kind of failing bureaucracy. Will Ministers look into the matter and into Sam’s case?
WorkWell Expansion
Pat McFadden Excerpts(2 months ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
Today, together with my right hon. Friend the Secretary of State for Health and Social Care, we are announcing England-wide expansion of the WorkWell service from autumn 2026 backed by up to £259 million of investment over three years. We have seen great success with the 15 current WorkWell pilots, which provide integrated employment and health support for local working-age people, helping them to get into and on in work. It is a voluntary service which saw over 25,000 disabled people and people with health conditions receive support to stay in and re-enter the workplace, within the first 14 months of launch.
Key to helping local working age people get the support they need to stay in work or return quickly following a period of absence is ensuring local services are joined up to provide an integrated, holistic approach to health and work support. WorkWell is innovative because although funded by central Government it is designed and delivered by our local health systems, who work in partnership with local government, jobcentres, and community and voluntary groups. This allows us to intervene early at the point an individual feels their health condition or disability will have an impact on the work they do or make it more difficult for them to return to work quickly.
Good quality work is a key determinant of health, and that is why keeping people in work is a core priority for the Government. We know that 2.8 million working-age people are now economically inactive due to health conditions, with 800,000 more people out of work due to health problems now than in 2019. There are more people currently in work with work-limiting health conditions or disabilities than ever before, with almost one in four of the working-age population classed as disabled. The £259 million expansion of WorkWell that we are announcing today forms a key part of our wider Pathways to Work offer for working-age disabled people and those with health conditions.
Helping people along their unique pathway to work is what we mean when we say we want an opportunity welfare state. This is why I am pleased to share that, alongside our existing pilot sites, WorkWell will be available to support our working-age population across all of England from autumn 2026.
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Universal Credit Entitlement: Offenders Detained in Hospital
Pat McFadden Excerpts(2 months ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
Our welfare system, through benefits like universal credit, provides a crucial safety net to millions of people across this country but it cannot be right that individuals who have been convicted of serious crimes continue to receive substantial support from this system while their living costs are being met in hospital.
It is important that the people of Great Britain see fairness in their welfare system and that it has their confidence. I have therefore made the decision that I intend to bring forward proposals that would remove benefit entitlement for offenders who are detained in hospital following conviction for serious violent offences. I will begin a programme of engagement this month, that will seek the views of experts and stakeholders including clinicians, victims’ groups and the mental health sector on the best way to do this. The Department for Work and Pensions will also work closely with the devolved Governments to ensure there is a consistent approach.
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