\n<\/p>\n
The future of the youth minimum wage will come under review as part of a major inquiry into rising inactivity among Britain\u2019s young people by the former health secretary Alan Milburn.<\/p>\n
The social mobility expert said that unless the government tackled some \u201cuncomfortable truths\u201d about the labour market there was a risk of creating a \u201clost generation\u201d of young people.<\/p>\n
In an interview with the Guardian, he said the rising overall welfare bill was \u201cunsustainable fiscally and economically\u201d but insisted that any reform of the system had to focus on righting social injustices first.<\/p>\n
Milburn\u2019s intervention over the minimum wage echoes recent warnings from economists that the increase in youth rates \u2013 which the government is trying to equalise with the adult rate \u2013 could lead to some being \u201cpriced out\u201d of entry-level jobs.<\/p>\n
But it is likely to be greeted with dismay from some Labour MPs and unions after the party pledged to end \u201cdiscriminatory\u201d lower minimum wage rates for younger workers so that all adults would be entitled to the same legal pay floor.<\/p>\n
In a warning to Labour on Friday, Andrea Egan, the incoming general secretary of Unison, wrote in the Guardian that she would \u201ccall time on our union\u2019s inexcusable habit of propping up politicians who act against our interests, undermine our fundamental values, and make our lives worse\u201d.<\/p>\n
As Keir Starmer struggles against a backdrop of difficult poll ratings, Milburn, a veteran of Tony Blair\u2019s government, suggested this one could still turn around its fortunes if it was able to generate hope for the future. He said transforming young people\u2019s prospects could do that.<\/p>\n
But he said that without substantive action, the UK was at risk of abandoning a whole generation to a life on benefits and could push them away from mainstream parties towards rightwing populism.<\/p>\n
After launching his review of why a quarter of 16- to 24-year-olds are not in education, employment or training earlier this week, Milburn said they faced a \u201cperfect storm\u201d in the youth labour market after the Covid crisis, with systemic failures and policy neglect in education and welfare over decades.<\/p>\n
\u201cYou write off a generation, you write off the country\u2019s future,\u201d he said. \u201cYou\u2019ve got this sort of downward escalator: we\u2019re plunging young people into a lifetime on benefits, rather than creating an upward escalator, with opportunities for people to learn and to earn.\u201d<\/p>\n
The former cabinet minister is not shying away from recommending radical reform of the system in his final report, due in the summer. He said he was prepared to look at pressure on employers and the steep rise in mental health claims.<\/p>\n
Before the budget, Treasury insiders were among those who were concerned about the increase in youth rates of the minimum wage, amid fears they could be priced out of entry-level jobs.<\/p>\n
\u201cWe\u2019ve got to look very carefully at exactly that,\u201d Milburn said. \u201cWe\u2019ve got to make sure that in a fragile youth labour market, and it\u2019s been fragile for very many years, that public policy is providing the right incentives for employers to employ more young people, rather than less.\u201d<\/p>\n
Asked whether he thought businesses had been squeezed too much by the government, which put up national insurance at the last budget, he added: \u201cI hear that being said. I\u2019m going to examine the evidence, and we will reach a conclusion.\u201d<\/p>\n
Milburn also wants to address sensitive issues around the mental health of young people, citing it as a reason for a sharp rise in sickness benefits in recent years.<\/p>\n
\u201cWe\u2019ve got to be careful that just because you\u2019ve got anxiety or depression, that automatically puts you on to the downward escalator into the world of benefits,\u201d he said.<\/p>\n
\u201cWe\u2019re at real risk in the debate that\u2019s taking place sometimes, of a new currency developing which says that work is bad for people\u2019s mental health, whereas the opposite of that is true, which is good work in particular, is extremely good for people\u2019s mental health.<\/p>\n
\u201cWhen I talk about these uncomfortable truths that the review is going to have to confront, you know, this is one of them.\u201d<\/p>\n
The health secretary, Wes Streeting, has ordered a clinical review of the diagnosis of mental health conditions in England, which will inform Milburn\u2019s review.<\/p>\n
However, the Labour veteran said 16- to 24-year-olds were a \u201cgeneration under duress\u201d. They faced a different world from their predecessors, who had a \u201csocial transaction\u201d with the state that no longer existed.<\/p>\n
\u201cIt\u2019s very easy to play the blame game … but we\u2019ve got a job to act as custodians, to make sure that young people have got the right opportunities in front of them,\u201d he added, saying that the government and business needed to step up.<\/p>\n
They had a responsibility, in particular, to prepare younger generations for \u201ctomorrow\u2019s potential tsunami\u201d \u2013 the advance of technology \u2013 which could send further shockwaves through the youth labour market.<\/p>\n
\u201cYou can\u2019t simply say, King Canute-like, we\u2019re going to resist the forward march of technology. That\u2019s not possible. What we have got to do is equip people to be able to adapt, be agile enough, to have enough resilience, to be able to succeed in that labour market,\u201d he said.<\/p>\n
With Labour losing support among younger voters, many of them disillusioned by a political system they feel is entrenching generational inequality, Milburn said young people were deserting the mainstream parties.<\/p>\n
\u201cIf young people start feeling society isn\u2019t interested in me, to this question of how they\u2019re thinking of potentially voting in future, then there\u2019s an obvious quid pro quo,\u201d he said, suggesting that they could turn to Reform UK instead.<\/p>\n
\u201cThat should be something that people would want to avoid, particularly people who are concerned about progressive politics. It\u2019s pretty obvious that that social contract is being broken\u201d.<\/p>\n
Milburn, who is close to Streeting \u2013 regarded as a potential successor to Starmer if he stands down \u2013 urged the government to be more optimistic about what it could deliver. \u201cThe centre-left of politics only wins when it creates a sense of possibility about the future,\u201d he said.<\/p>\n
\u201cSo my very strong advice would be generate hope for the future. This [review] is about saying the future can be better than the present and better than the past. It is about making sure that we\u2019re investing in the future generation. The biggest deficit in the country is the shortage of hope.\u201d<\/p>\n
Pat McFadden, the work and pensions secretary, is planning to propose further welfare reform next year, after the government abandoned a significant part of its bill in June under pressure from Labour MPs.<\/p>\n
Milburn, whose review is reporting to McFadden, said the government had \u201cself-evidently\u201d got its attempts to win MPs round on welfare badly wrong. \u201cFraming welfare reform as a cost-out measure wasn\u2019t a sensible approach to take, and it produced the inevitable result,\u201d he said.<\/p>\n
\u201cIf you want to reduce welfare bills, the only way of doing that is to provide more opportunities for people to learn and to earn first.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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