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Pat McFadden, the UK welfare secretary, has warned young people could have their benefits withdrawn if they do not accept offers of work or training under his plans to reform the benefit system.
McFadden, one of Sir Keir Starmer’s closest lieutenants who was moved to run the Department for Work and Pensions in September, said the government had to curb the rise in young people not in education, employment or training (NEETs), which has jumped since the Covid-19 pandemic.
“Doing nothing should not be an option,” McFadden told Sunday Morning with Trevor Phillips on Sky News. He replied “yeah, they could be” when asked if universal credit would be withdrawn from young people who did not engage with the government’s programme.
“The option that we don’t want people to have is just to sit at home and not engage with us.”
To get NEETs back into work, education or training, the government will offer to subsidise jobs for employers initially to encourage them to take a chance on young people who have been out of work for some time.
Under the so-called jobs guarantee, every 18 to 21-year-old who has been receiving benefits under universal credit for 18 months will be guaranteed six months of paid work, with the government covering the full employment costs for 25 hours a week.
“We see this as both an offer [and] an obligation,” McFadden said on Sunday.
“This should be a Labour cause because it’s an issue not just of unemployment, but of inequality too — these numbers are worse in the poorest parts of the country.”
In the past decade the number of NEETs in the UK has doubled from 4.5 per cent to 9 per cent of the 20 to 24-year-old population.
The push comes as the government considers making further reforms to the welfare system, saying it wants to improve life outcomes for younger people but also to curb spending, which it has struggled to reduce.
Shadow work and pensions secretary Helen Whately criticised the government for introducing policies such as an increase in the minimum wage and employers’ national insurance.
“The problem we have here is a government whose policies are destroying jobs, destroying opportunities for young people, now saying they’re going to spend taxpayers’ money on creating work placements,” Whately told Sky News.
This summer Starmer’s government had to make a humiliating climbdown on welfare reforms after a backbench rebellion that has undermined the leadership’s authority ever since.
At the Budget last month chancellor Rachel Reeves agreed to lift the two-child benefit cap, allowing larger families with more children to receive additional payments. Labour had previously resisted reversing a policy that was broadly popular with voters.
Starmer is widely seen as vulnerable to a leadership challenge, with Labour lagging behind Nigel Farage’s populist Reform UK party in the polls.
McFadden has been tasked with reforming the benefits system, both to improve outcomes and to save money, as the government grapples with tight budgets and an annual debt interest bill in excess of £100bn a year.
Former health secretary Alan Milburn has been asked to carry out a review on inactivity among young people over the next few months to help further shape the government’s response.
