Youth unemployment has soared to its highest level for nearly 12 years, and the Labour Party has been accused of contributing to this crisis through painful tax hikes, increasing minimum wage rates, and automation in the job market. The Institute of Directors and UK Hospitality have also raised concerns about the impact of Labour's approach to balance the books on high street businesses and the resulting rise in unemployment.
Labour has been accused of 'betraying future generations' by 'killing off jobs' for the young after youth unemployment soared to its highest level for nearly 12 years.
The Office for National Statistics said the jobless rate among 18 to 24-year-olds now stands at 14.7 per cent, a rate not seen since late 2014. For the wider 16 to 24-year-old age group, unemployment has soared to 16.2 per cent, the highest level since early 2015.
The blame was laid firmly at the door of the Government amid warnings Rachel Reeves' painful tax hikes and sharp increases in the minimum wage for younger workers have priced them out of jobs as companies turn to automation and artificial intelligence. The Institute of Directors accused Labour of 'materially damaging the business case for taking on staff' with experts warning of 'a perilous jobs crunch' as 'younger workers continue to bear the brunt'.
ONS statistician Liz McKeown noted that 'lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers' over the past year. These typically take on and employ large numbers of young people – underlining the scale of the crisis facing school leavers and graduates looking for work.
Keir Starmer and Rachel Reeves have overseen a rise in unemployment after hiking taxes Kate Nicholls, chairman of UK Hospitality, said: 'The Government's approach to balance the books on the backs of high street businesses is resulting in rising unemployment and fewer job opportunities, particularly for young people.
' And with another 100,000 jobs being lost in April alone – taking the total to 243,000 since Labour came to power – she warned of 'dark clouds on the horizon' and accused the Chancellor of 'taxing jobs out of the sector'. Tory business spokesman Andrew Griffith accused Labour of 'killing off job opportunities for young people'.
Shadow chancellor Sir Mel Stride added: 'Labour claim they want to help young people, yet Rachel Reeves' very first Budget introduced a £25billion jobs tax that made it more expensive to hire young workers.
'That's the contradiction at the heart of Labour's plan - and an utter betrayal of future generations. You don't get more young people into work by punishing the very businesses that hire them.
' Reform UK's Treasury spokesman Robert Jenrick said: 'These figures are the direct result of Rachel Reeves' job-killing taxes. A whole generation was told that if they worked hard and did the right thing then opportunity would follow. Instead, they've been handed rising unemployment and shrinking prospects. Britain cannot afford more excuses.
' The ONS report showed overall unemployment hit an 11-year high of 5.5 per cent in March and now stands at 1.98million – leaving it on the verge of topping 2million for the first time since 2014. In a worrying sign of dwindling job opportunities, the number of vacancies has fallen to a five-year low of 705,000 as firms dealing with Labour's tax hikes and other costs put hiring on hold.
Analysis of the figures by WPI Strategy shows that since the Chancellor's first Budget in October 2024 - when she announced her £25billion national insurance tax raid alongside hikes to the minimum wage - the number of employees aged 34 and under has fallen by 296,000 while employment among those 35 and over has risen by 18,000.
'Younger workers continue to bear the brunt of a cooling labour market,' said Martin Beck, chief economist at WPI Strategy. The Left-wing Resolution Foundation – often dubbed Labour's favourite think tank – warned households face a fresh slump in living standards as wage growth slows and inflation picks up. The ONS report showed pay was up 3.4 per cent in the first three months of the year.
However, this masked a split, with public sector workers seeing a 4.8 per cent increase while private sector pay was up by just 3 per cent, below March's inflation figure of 3.3 per cent.
'With inflation set to increase over the coming months, the UK is on the cusp of its fourth period of falling real-wage growth in less than two decades,' said Julia Diniz, an economist at the Resolution Foundation. 'This stuttering performance goes a long way in explaining the political and economic discontent that surrounds modern Britain.
' Labour has sought to blame the jobs bloodbath and wider economic malaise on the conflict in the Middle East, which has sent fuel and energy prices soaring. But business leaders turned on the government as employers reel from a string of tax hikes and other costs including sharply higher minimum wage rates. Bosses are also grappling with a slew of costly new rights for workers following reforms spearheaded by Angela Rayner.
Alex Hall-Chen, an employment expert at the Institute of Directors, said: 'This weakening of the jobs market is a direct result of the Government's employment policies.
'By increasing the costs and risks involved with hiring via the Employment Rights Act, consecutive years of above-inflation minimum wage increases, and the employer national insurance increase, the Government has materially damaged the business case for taking on staff. ' 'The only sustainable way to encourage employers to create more jobs is to remove barriers to hiring.
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Labour Party Rachel Reeves Job Creation Young Workers Automation Artificial Intelligence Job Tax Minimum Wage Hikes Taxation Policies Employment Policies Institute Of Directors UK Hospitality Job Creation Inflation Real-Wage Growth Conflict In The Middle East Fuel And Energy Prices Reforms Spearheaded By Angela Rayner
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