Youth Unemployment

Sarah Olney Excerpts

Wednesday 28th January 2026 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

Youth unemployment has risen since Labour took power. The rate is now above 15%, which means that more than one in seven 18 to 24-year-olds are not in employment. That is a really troubling statistic, but it has its roots in the Conservatives’ dismal economic record. The economic challenges we face did not develop overnight. The previous Government’s economic chaos and mismanagement damaged jobs and young people’s employment prospects. The Conservative party failed to invest in skills and workforce planning, which is contributing to the shortage of quality entry-level jobs available to people leaving college or university.

[Steff Aquarone (North Norfolk) (LD)]

I have carefully read the Opposition motion on this hugely important issue, and I am rather concerned that transport is not mentioned once. Transport is a massive barrier to employment and training for young people in North Norfolk, but the Conservatives do not seem to realise that it is an issue. Does my hon. Friend agree with me that poor rural public transport is trapping young people in my area in unemployment, and that the Conservatives should apologise to those young people for the state that they have left us in?

[Sarah Olney]

My hon. Friend is right. Young people face so many barriers to accessing both education and employment, and that is very much a legacy of the last Conservative Government and their mismanagement.

Young people are increasingly concerned about the fact that the links between education and employment have become weaker and weaker.

[Amanda Martin (Portsmouth North) (Lab)]

Does the hon. Member agree that, under the Conservatives, career advice in schools was absolutely decimated and hollowed out, pushing young people to the margins? On top of that, does she agree that young people are unable to do the gold-standard apprenticeships that my dad and my brother did, as those apprenticeships were neglected by the Conservatives, in favour of more academic routes?

[Sarah Olney]

The hon. Lady is absolutely right about apprenticeships, and I will say more about them in due course.

In years past, those who went to university and attained a good degree could reasonably expect an entry-level job in the field in which they wanted to work, but now the experience for so many young people is that they enter a job market that is not open to hiring inexperienced people; employers are less willing or able to take a risk on training individuals just out of university. When I spoke to business students from Roehampton University earlier this month, they explained to me their fears that they will be unable to work in the field of their choosing. One student told me that they had even seen an advertisement for a volunteering position that required three years of experience. The job market is so crowded and competitive that the reality for more and more graduates is that they must return to living with their parents after university, with no serious prospect of gaining even an entry-level job.

[Dr Luke Evans]

Does the hon. Member share my concern about the graduate market? We are talking about youth unemployment, but we know from the Office for National Statistics that 257,000 Brits have emigrated, of whom 70% were under the age of 35. We are losing a lot of talent, but that is not being picked up in the figures for youth unemployment, so it is likely that youth unemployment is actually significantly worse, and that is because of the Government’s changes.

--- Later in debate ---

[Sarah Olney]

One of my big concerns is that, for our economy, we are not getting that pipeline of young people into those entry-level jobs. That threatens our future sustainability and growth, as well as imperilling the prospects of those young people who cannot gain a role.

Those students also expressed their concerns about artificial intelligence replacing many professional jobs, making the skills that they are learning surplus to requirements for many employers. As the Government look to promote public sector efficiency through using AI, many young people are worried that that will mean even fewer jobs for them.

[Jim Shannon (Strangford) (DUP)]

I always try to be constructive with my interventions and comments. In Northern Ireland, youth unemployment is at 7.3%, but here it is more than double that at, I think, 15.4%. Does the hon. Lady agree that we should look at success stories in this United Kingdom of Great Britain and Northern Ireland where youth unemployment has reduced by so much? In Northern Ireland, we focused on young Protestant males from 12 to 18 who could not get jobs, and reduced the unemployment rate. If we can do that in Northern Ireland, I am quite sure that we could do the same on the mainland. Does the hon. Lady agree that we should look at that?

[Sarah Olney]

The hon. Gentleman always makes constructive interventions. He is absolutely right that we need to look at what works. We need to focus on this issue not just for the health and benefit of our young people but for the economy as a whole.

Although we should continue to invest in technological breakthroughs, I am concerned that the Government do not have a strategy for our young people who could be pushed out of the job market by automation. I would be grateful if the Minister responded to that.

There is also a lack of alternatives for young people who wish to upskill, as the apprenticeship pathway is so limited. Businesses tell me that the apprenticeship levy does not work, despite the Government’s attempts at reform. The Liberal Democrats have long called for reform to replace it with a wider skills and training levy, which would give businesses real flexibility about how they spend the money to train their staff and, consequently, provide young people with a better avenue to enter the workforce. The decision taken to defund level 7 apprenticeships for over-22s risks limiting those opportunities. In 2024-25, 51% of all apprenticeship starts were for those aged 25 and over. That is a critical skills pipeline in areas that are key to economic growth, and while the economy is changing so rapidly, we need to provide opportunities for older workers to retrain so that they can continue to find meaningful work later in life.

The Liberal Democrats would fix the skills and recruitment crisis by investing in education and training, including the availability of apprenticeships and career advice for young people. The current system needs to be reformed. That would include boosting the take-off of apprenticeships by guaranteeing that they are paid at least the national minimum wage from the first year, creating new lifelong skills grants for adults to spend on education and training throughout their lives, and expanding vocational training. Although the Liberal Democrats welcomed discussions in the Budget regarding a wider youth guarantee and a growth and skills levy package, I have yet to understand the timeline for implementation. With youth unemployment rising, I encourage the Government to take quick and active steps to deliver that package.

[Steve Darling (Torbay) (LD)]

In Torbay, we have an incredible organisation called Sound Communities. Some young people are not in the position to take up an apprenticeship because, having suffered significant trauma in their lives, they need to build up their confidence. Sound Communities helps these youngsters get themselves in the right position to take up their place in this world. Does my hon. Friend agree that what we need is long-term funding to support these youngsters, so that they can have the opportunities and futures that they deserve?

[Sarah Olney]

My hon. Friend is absolutely right. There are groups of young people who are facing specific barriers to entering employment, and we need to do all we can to provide them with sustained support to get into and stay in the workplace.

Much of the UK’s current workforce challenges are due to the mistakes made by the current Government, with perhaps no bigger own goal than the surprise increase in employer national insurance contributions in the Chancellor’s first Budget. Almost every business that I, and I am sure many other Members, speak to tells me that the NICs rise blindsided it and has since seriously damaged its cash flow and ability to hire and retain staff. That policy alone has been so damaging to the business sector and has created an environment in which companies are discouraged from hiring young people.

Recent Government decisions include the devastating business rates hike in the Chancellor’s most recent Budget. This is causing huge damage to hospitality firms, with many now considering whether their business remains viable. Our hospitality businesses, which so frequently provide young people with their first jobs, are now on their knees. They need support from the Government. The Government’s statement yesterday on cutting business rates for pubs was a good first step, but we need wholesale reform of our business rates system. That is one more reason why the business community felt so betrayed by the previous Conservative Government, who promised reform but did nothing to help our struggling businesses.

[Wendy Chamberlain (North East Fife) (LD)]

My hon. Friend is highlighting two important things. The increases in on-costs for businesses mean that they are not taking on young people. More importantly, they are not then able to support the supervisory roles that give those young people the development they need, because they cannot make the differentiation in terms of salary. I am standing here as a Scottish MP. The Scottish Government did not pass on the business rate relief the last time. They have confirmed that they will do so for Barnett consequentials, but does she agree that the Scottish Government are simply not doing enough in this area and that, in fact, we are in a worse position than what is being debated today?

[Sarah Olney]

I am grateful to my hon. Friend for her intervention. She speaks very passionately about businesses in Scotland and the situation they are facing. I am sure she is correct to say that it is even more challenging in Scotland.

I am concerned that the Government’s sole focus on pubs and live music venues ignores the other retail, hospitality and leisure sectors which also need support. I therefore urge the Government to adopt Liberal Democrat proposals to cut the rate of VAT on hospitality, accommodation and attractions to 15% until April 2027, which would give our businesses the boost they so desperately need. Our high streets and town centres are in need of urgent help, and I urge the Government to act with all swiftness.

With the hospitality sector struggling to employ new workers, damage is being done to the prospects of our young people who are struggling with unemployment levels, and that will be detrimental to the broader economy. At the heart of this debate is that regular people are finding it incredibly difficult to find a job to support themselves, their partners, their children and their families, and to pay rent, pay for groceries and pay for essentials. That is what must not get lost in this debate.

While the Government seem to be weighing up their options on the EU re-set, they should be reminded that negotiating a new UK-EU customs union is the single biggest step that the UK could take to boost our economy, our businesses and our young people’s job prospects. The appalling agreement negotiated by the Conservative party has been a complete disaster for our country, particularly for small businesses who are held back by reams of red tape and new barriers to trade. So many young people I talk to are simply frustrated that they are the first generation who have to start their career while reaping the consequences of the Conservatives’ botched deal.

It seems evident from the Liberal Democrat Benches that the Government know that the UK must rectify the dismal trade deal negotiated by the Conservatives, and I am yet to hear a compelling reason from the Government as to why Ministers keep refusing to negotiate a new customs agreement with Europe. The steps the Government are taking to rebuild our relationship with the EU are welcomed by the Liberal Democrats, but I urge the Government to be bolder. This House voted in favour of joining a bespoke UK-EU customs union just last month. I urge the Government to seize that momentum, reach out to our European allies and negotiate a deal that would be mutually beneficial, creating countless new jobs for our young people here in the UK.

The Government cannot ignore the difficulties facing our young people anymore. Our young people need to be provided with a pathway for success and fewer barriers to getting on to the career ladder, but I am afraid the Government are failing to facilitate that. I urge Ministers to listen and adopt a joined-up strategy to tackle youth unemployment, invest in young people’s skills, boost apprenticeships and work-based training, and support businesses to create quality jobs.