A generation of Britons are being cut off from the wider world.
Last month, it was reported that two thirds of Gen Z sometimes stay inside for days on end. We at the Centre for Social Justice have previously found that seven in ten 18- to 24-year-olds feel lonely. Now new ONS data shows us that almost one million under 25s are out of work or training. These figures should send a shiver down the spine.
Serious problems in the labour market feed this crisis. The total number of people on out of work benefits hit a record 6.5 million recently, and this broader problem is most keenly seen among younger people.
Successive governments have failed to curb rising unemployment and economic inactivity – let alone tackle the root causes of why these are getting worse.
But with the number of under-25s in paid work falling sharply, it is time to get a grip. There are 51,000 fewer young people on payrolls since April, when new taxes were levied on employment.
If this continues, there will be a whole generation locked out of opportunity for decades to come. Set adrift by a system that does not care, preventing them from achieving that all-important first step onto the employment ladder.
There are several underlying causes that need addressing if we are to ease these symptoms.
Firstly, it cannot continue to be possible to earn more from benefits than work. Work must always pay. Otherwise people will inevitably start to make the seemingly rational choice to avoid onerous jobs if they can get the same financial reward for doing nothing, despite it being unequivocally better for them over the long term to work.
This problem is not some deceptive calculation adding up every benefit possible. Almost one million claimants are taking home £2,500 more in combined benefits than a full-time worker (after tax) on the national living wage.
Secondly, we are facing skyrocketing mental health claims. To a worryingly large extent, this is being driven by young people. We must support those with serious health problems, but for many, genuinely helping them means getting them into work. It means giving them the satisfaction of completing good work, and the excitement of that first payslip – the golden ticket to adulthood. The out-of-control claimant numbers that we are seeing nowadays are unreasonable and wrong.
Finally, there is greater competition than ever before within the jobs market. The unprecedented influx of migrants in recent years has had a deleterious effect. It has massively increased competition in a saturated market and has depressed wages as a result.
From record numbers of UK firms being fined for hiring illegal workers to the IMF acknowledging earlier this year that migration keeps wages down, the reality is becoming clearer everyday.
We have a toxic combination of blunt and outdated benefits, and a ready stream of low-cost workers, that is deeply damaging our young people – trapping a generation in lonely adolescence as the months and years tick on.
There is no way to address any of these aspects of the problem individually, they are inextricably intertwined. Fortunately, there are some common-sense solutions that we believe the Government could implement.
To start, it must be mandatory for all employers to advertise and attempt to hire UK workers before they consider hiring those in the UK on visas or those attempting to come to the UK from abroad. This was removed by Boris Johnson’s government in 2021. It must be reinstated, putting young Brits first.
Second, the Government should rebalance the welfare system (as Kemi Badenoch promised to do in her speech at Conservative Party Conference today) by withdrawing UC health and Personal Independence Payments from those with milder anxiety, depression or ADHD – equivalent to around 1.1 million people – and resetting remaining awards to £103 per week. This would save £7.4bn by 2029/30, of which at least £1bn should be reinvested in radically expanded NHS Talking Therapies, social prescribing, and employment support.
Third, the Government should introduce a Future Workforce Credit, an effective tax cut for employers hiring NEETs (those not in employment, education or training), funded by removing the UC health element for under-22s. This would get 120,000 young people into jobs while netting £765m in tax and welfare savings. This may appear radical, but the current approach is fundamentally unsustainable. Those with complex health problems are being sidelined by the rising tide of people accessing benefits that they would be ultimately better off not using.
This is a national crisis; having a million jobless young people is a moral and economic disaster. Unless ministers grasp the nettle of welfare reform, Britain risks writing off a generation.
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