Firms to be Paid to Hire Unemployed Young People
Companies are set to receive grants to hire more young people under new government proposals aimed at tackling youth unemployment. Ministers are targeting the creation of 200,000 jobs with a pledge of £1 billion in funding for several key initiatives.
Key Financial Incentives for Employers
Businesses will receive £3,000 for every person aged 18 to 24 they employ who has been searching for a job for six months or more. Additionally, small and medium firms will be paid £2,000 for every new apprentice they take on.
Addressing Youth Unemployment Crisis
Labour has faced criticism over "disappearing" work opportunities. In the final quarter of last year, the number of young people not in education, employment or training (Neets) neared one million.
Work and Pensions Secretary Pat McFadden is set to announce the Youth Jobs Grant on Monday, with approximately 60,000 people expected to benefit from these proposals.
Expansion of Existing Job Guarantee
An existing jobs guarantee—which assures young people a six-month job if they're on Universal Credit and have been looking for work for 18 months—will be expanded from ages 18-21 up to 24-year-olds.
McFadden emphasized that these measures will provide "life-changing opportunities to young people" and "significantly reverse the increase we inherited in those not in education, employment or training."
Political Support and Opposition
Prime Minister Sir Keir Starmer stated that "these reforms underpin our ambition to create an economy that works for everyone, closing the skills gap and supporting more young people into meaningful employment."
Michelin star chef Tom Kerridge endorsed the scheme, saying "these incentives will give our industry a great boost."
The Conservatives have criticized the government's approach, claiming that the Employment Rights Act and increased national insurance contributions have negatively impacted young job seekers. Shadow work and pensions secretary Helen Whately argued that "the best way to tackle youth unemployment is to back businesses to create jobs, not tax them out of existence to fund benefits and subsidies."
Changes to Employment Rights
Under the new act applying to England, Scotland and Wales, workers will have the right to claim unfair dismissal from six months into their employment—a significant reduction from the current two-year qualifying period. Labour had previously pledged to offer this right from the first day of employment as part of their election manifesto.
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