Ministers are considering ditching Labour’s manifesto pledge to pay young people the same national minimum wage as older workers, amid warnings it is fuelling record youth unemployment.
Official figures released on Tuesday showed youth unemployment rose to 16.1% at the end of last year - the highest level since 2014 - with almost one in six 18 to 24-year-olds now out of work.
Business groups have warned the government is “pricing a generation of young people out of the workplace” through increases to the national living wage, wider employment rights and higher employer national insurance costs.
A government source said the rising youth unemployment figures had “strengthened the case for a rethink”, adding: “There is no point increasing minimum pay for young workers if they haven’t got jobs to go to.”
Kate Nicholls, chair of UKHospitality, said the rising numbers of unemployed young people was “heartbreaking”.
“My industry has always been at the forefront of giving chances to people who are furthest from the labour market,” she told The Times.
“To have those opportunities taken away because the government has taxed them out of existence is ludicrous and heartbreaking.”
Pat McFadden, the work and pensions secretary, said there were 381,000 more people in work since the start of this year, but added there was “more to do to get people into jobs”.
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Companies reporting today
BAE Systems* - Full Year Results
Glencore* - Full Year Results
Pan African Resources - Half Year Results