Milburn report warns minimum wage hikes hinder youth hiring

Alan Milburn, chair of the government-commissioned review into young people not in employment, education or training (Neets), has warned that recent increases to the minimum wage and the Workers’ Rights Bill are impeding employers’ ability to hire young people. In a diagnostic report released today, Milburn stated that Britain risks a 25 per cent rise in the number of Neets, reaching 1.25 million by the early 2030s, unless urgent government action is taken to address the issue.

The 200-page report, described by insiders as exceptionally thorough and hard-hitting, aligns with critiques previously made by former Prime Minister Tony Blair regarding the current administration’s approach to entry-level job creation. Milburn confirmed that employers in low-margin sectors, particularly retail and hospitality, have raised concerns that these policy changes have created a difficult environment for hiring young workers.

Speaking on morning news programmes, Milburn acknowledged that while no employer wishes to pay poverty wages, the cumulative effect of recent legislative changes has impacted business operations. He indicated that if the government’s priority is to create jobs for young people, it must ensure the right conditions are in place for employers to operate effectively, suggesting a need to reconsider the impact of the minimum wage rise and employer national insurance contributions.

The release of Milburn’s diagnostic findings coincided with the publication of new figures by the Office for National Statistics (ONS) on Neets and personal wellbeing. The review’s chair noted that every employer he has spoken to has echoed these concerns, reinforcing the view that the changes implemented in recent years have had a tangible impact on hiring practices across the economy.

A second report containing specific policy recommendations is scheduled for publication in the autumn. The political landscape surrounding the issue remains active, with former health secretary Wes Streeting publishing a rebuttal to Blair’s recent essay in the Guardian, and Greater Manchester Mayor Andy Burnham expected to deliver a considered response to Blair’s critique. Prime Minister Keir Starmer is also scheduled to meet apprentices in London and address broadcasters this afternoon.