Work and Pensions Secretary Pat McFadden plans to urge Labour MPs to confront welfare reforms head-on as the government introduces a £1 billion initiative to guide 200,000 young people into employment or apprenticeships.
Addressing Rising Youth Unemployment
New data highlights a troubling surge in young people out of work due to health issues. The number of 16- to 24-year-olds not in education, employment, or training—known as Neets—reached 957,000 in the three months to December, up from 946,000 the previous quarter, according to the Office for National Statistics.
The proportion of Neets reporting work-limiting health conditions has jumped 70% over the past decade, rising from 26% in 2015 to 44% in 2025. Mental health issues and autism account for more than two-thirds of these cases, analysis from the Health Foundation reveals. Young people under 25 on sickness benefits now face lower employment prospects than those over 55 with poor health.
McFadden warns that this trend risks lifelong consequences for affected youth, calling for a major overhaul of a system that too easily directs them toward “unfit for work” status.
Key Measures in the £1bn Scheme
The program targets the youth unemployment spike since Labour took power. Initiatives include:
- A £3,000 youth jobs grant for employers hiring 18- to 24-year-olds.
- £2,000 payments to small and medium-sized firms for each young apprentice.
- Extension of the jobs guarantee—providing work for those unemployed 18 months—to all under-24s.
- Reductions in apprenticeship spots for older workers to prioritize youth.
McFadden describes these steps as offering “life-changing opportunities to young people.”
Political Pushback and Context
McFadden signals the government can no longer sidestep welfare changes after Labour MPs last year blocked £5 billion in proposed cuts deemed too harsh.
Shadow Work and Pensions Secretary Helen Whately attributes the unemployment rise to Labour policies, including a £25 billion National Insurance increase, minimum wage hikes, and new employment rights that deter businesses from hiring young staff. She argues: “The best way to tackle this is to back businesses to create jobs, not tax them out of existence to fund benefits and subsidies.”
