Next CEO warns of youth employment crisis as Milburn report looms
The retail chief executive argues that upcoming changes to zero-hours contracts and tax hikes are exacerbating a shortage of entry-level roles, even as the Treasury defends its wage policies.
Lord Wolfson, chief executive of Next, has issued a stark warning regarding the contraction of entry-level employment in the United Kingdom, describing a "dramatic fall" in opportunities for young workers. The retailer’s boss highlighted that applications for shop positions have doubled to 19 per vacancy, a significant increase from the 10 applications recorded in 2024. Wolfson characterised this surge in applicant volume as indicative of a deepening crisis in youth unemployment, noting that the youngest workers are disproportionately affected when job availability shrinks.
These comments emerge alongside the impending release of a government-commissioned review led by Alan Milburn. The report is expected to conclude that the Labour government has failed to address the soaring number of young people classified as not in education, employment, or training, with nearly one million individuals falling into this category. Milburn has previously criticised ministers for responding to the issue with disjointed jobs programmes rather than implementing a cohesive strategy, suggesting that a "system reset" involving an overhaul of health and disability benefits may be necessary.
Wolfson identified several policy measures as significant obstacles to hiring flexibility, particularly the regulations within the Employment Rights Act that ban zero-hours contracts from next year. He argued that the requirement for guaranteed hours would make it difficult for retailers to manage seasonal fluctuations, such as the disparity between quiet winter months and peak Christmas trading. While acknowledging the need to eliminate exploitative contracts in most sectors, Wolfson contended that the new rules would ultimately harm students seeking extra hours during holidays and reduce service quality for customers.
The Treasury has firmly rejected the call to reverse recent increases in national insurance contributions and the minimum wage. A spokesperson stated that raising the national minimum wage boosts pay for over 200,000 young workers and noted that employer national insurance contributions are already lower when hiring employees under the age of 21. The government maintains that cutting wages for the lowest-paid during a period of global uncertainty is not a viable solution to employment challenges.
In contrast to the concerns raised by Wolfson, the Trades Union Congress argued that the right to a regular-hours contract would be based on a reference period spanning several months. This approach, the union stated, is designed to even out peaks and troughs in demand and would not negatively impact holiday jobs. Meanwhile, Next has reported a full-year profit expectation of £1.2bn, with sales rising 6.2% in the first quarter, as the company continues to integrate automation and self-scanning technology to reduce reliance on traditional retail staff.