For years, Britain’s welfare debate has revolved around one question: how can we prevent the spiralling numbers of people moving onto benefits, particularly among the young. It isn’t just an issue of the impact on the lives of the millions not working but the disastrous fiscal consequences. Today, a new review overseen by former health minister Alan Milburn dramatically highlights exactly how bad the position is for Neets – those not in work, employment, education or training. It also poses the critical question of what happens when an entire generation risks becoming permanently detached from work altogether?
Milburn’s review is a sobering read. It describes a Britain facing a ‘generational fault line’, with growing numbers of young people increasingly trapped outside the workforce before they have even begun adult life. More than half of economically inactive young people have never had a job at all. Twenty years ago, that figure was closer to four in ten. Worryingly, Britain’s record is significantly worse than other comparable western countries like Ireland and the Netherlands.
Milburn is right not to understate the issue. His review lays bare the scale of Britain’s welfare and inactivity crisis in stark terms. Economic inactivity has surged since the pandemic, millions more people are now claiming incapacity or disability-related benefits.
Some of the findings are particularly striking. Almost one million young people are now classed as not in education, employment or training. Around 15 per cent of are graduates unable to find work, while almost a third achieved five ‘good’ GCSEs. School absence and exclusion are emerging as major drivers of later worklessness, while the collapse of entry-level jobs and the decline of the ‘Saturday job’ have left many younger people trapped in a vicious cycle where employers demand experience but opportunities to gain it have steadily disappeared.
Milburn is also right to argue that this is not primarily a failure of aspiration among young people themselves. Research for the review found that 84 per cent of economically inactive young people actually want work or training. As Keir Starmer acknowledged in response to the report, ‘the problem is not a lack of aspiration, it’s a lack of opportunity and support.’
The report is particularly important because it finally confronts the uncomfortable relationship between Britain’s welfare system and rising inactivity. Milburn warns that the current system is ‘exacerbating inactivity’ and creating perverse incentives that trap people outside the workforce rather than helping them back into it. Backed by the extraordinary fact that, for every £1 spent helping young people into employment, £25 is now spent supporting them on benefits.
Milburn deserves credit for dragging these issues back into the centre of political debate. But here is the kicker: most of this analysis is not new or unknown. There have been countless reports by think tanks and politicians identifying the problem. What is missing is what to do practically to tackle the problem, not just for Neets but more widely. More importantly, where is there any political will to take the tough actions that will be needed? After all, it is only a year since the government attempted to make some relatively minor changes to welfare, only to be forced into a humiliating U-turn by its own backbenchers. This is as much about timing as political will. The second part of Milburn’s review, which will focus on solutions, will not be published till the autumn at the earliest – along with Stephen Timms review looking at disability benefits.
No doubt some of what these reviews will propose may not require legislation or parliamentary votes. But the prospect of Labour backbenchers backing more radical ideas that need their support seems vanishingly small. Worse still, any legislation would have to be in the next King’s Speech – does anyone imagine that a Labour government is likely to be pushing changes to welfare in 2028 in the run up to the likely date of the next general election.
Surely too, waiting years more to introduce changes to what is an ever worsening position – set to increase to as many as 1,270,000 young people classed as Neets by 2031 if no changes are implemented – is the ultimate dereliction of duty.
Pressure to act on welfare was exacerbated by this week’s intervention from Milburn’s former boss, Tony Blair. In a striking warning to his own party, Blair argued that Britain now needs ‘a plan for fundamental reform, over time, of welfare’, warning that by the end of the decade the country could be spending more on incapacity and disability benefits than on defence.
‘No serious country can do that,’ he wrote. Quite.
Blair also directly confronted what many ministers still appear reluctant to say publicly: that parts of the current system actively discourage work. ‘Mental-health spending has exploded over the past five or six years,’ he noted, adding bluntly that ‘the system at points incentivises people not to work.’
There is growing awareness among politicians and the wider public that welfare reform is overdue with a recent YouGov survey finding that welfare and welfare reform was the fifth most important issue for voters ahead of the recent local elections. But more words, however expertly crafted, and more ideas, however imaginative, require political will and leadership.
In truth, Milburn’s review is the right idea but delivered at the wrong time. The political window for meaningful reform is already closing. Unless ministers move rapidly, this Parliament risks ending with broad agreement that the welfare system is broken – and no political time left to fix it.
Comments