Britain cannot afford a lost generation: Retailers sound alarm as youth joblessness tops
Retailers have warned that tax, wages and changes to workers’ rights are hurting hiring as the number of young people not earning or learning tops 1m for the first time in over a decade.
Helen Dickinson, the chief executive of the British Retail Consortium (BRC), has warned that ‘Britain cannot afford to lose a generation of young talent and ambition’ but the High Street is under pressure to axe roles.
Maintaining roles in the sector, including part time and seasonal shop roles that have traditionally been the first foot in the door of the working world for teenagers and young adults, is becoming ‘increasingly difficult’.
Her remarks came the same day Alan Milburn said that the number of young people classified as not in education, employment or training (NEET) was ‘probably the most significant challenge facing our country’.
Around 1.01m 16 to 24-year-olds in the UK fell into this category between January and March this year, according to the Office for National Statistics.
This represents 13.5 per cent of the age group – an increase from the 12.5 per cent recorded over the same period last year.
Helen Dickinson writes that taxes and red tape are making it ‘increasingly difficult’ for retailers to hire young people
Writing for This is Money, Dickinson said that retail has ‘has long been the first step on the ladder for millions of people entering the world of work,’ giving people confidence and responsibility for the first time.
She said Milburn, who published a shocking report into youth joblessness on Thursday, ‘was right to warn that without urgent action on youth unemployment, Britain risks a ‘lost generation.’
Members of the BRC, which include major retailers including Marks & Spencer, Primark, Tesco and B&Q, ‘recognise only too well’ Milburn’s point that ‘the first rung of the career ladder is disappearing for too many young people,’ she said.
And she echoed his view that it was not ‘lack of ambition among young people, but a lack of available opportunities’ that is holding them back from jobs.
But she said retailers are being stifled by high taxes and red tape, making it ‘increasingly difficult’ for them to offer such all too important first jobs.
She said retail has lost almost 400,000 jobs over the past decade all while ‘rising costs continue to place pressure on hiring and investment decisions.’
Rises in employer National Insurance contributions and the National Living Wage have represented around £6.5 billion in extra costs for the sector, she said, while geopolitical challenges such as the war in the Middle East also weigh on supply chain costs.
Dickinson said her members are also concerned about the implementation of the Employment Rights Act, ‘particularly if it adds further cost and complexity to hiring at a time when employer confidence is already under pressure.’
Bosses including Next’s Lord Simon Wolfson have raised concerns about the new rights potentially making it more complicated for retailers to hire seasonal or part-time staff – for example if a student wants to work four hours during term time and then take on more hours in the holidays.
The Government says it intends to crack down on exploitative working arrangements, including zero hours contracts.
Dickinson added: ‘Retailers share government’s ambition to reduce youth unemployment and expand opportunity, and there is now a real opportunity for government and business to work more closely together to deliver it.’
She said this should include ‘simplifying what can currently feel like a fragmented system of youth employment support, creating clearer and more effective routes into work.’
And she advocated for ‘building stronger partnerships’ between employers, job centres and local initiatives.
She said: ‘Retailers are ready to play their part. Britain cannot afford to lose a generation of young talent and ambition, and retail stands ready to work with government to help more young people get the opportunities, skills and confidence they need to build successful working lives.’
Britain cannot afford a lost generation – and retail stands ready to help
By Helen Dickinson, CEO of the British Retail Consortium
Retail has long been the first step on the ladder for millions of people entering the world of work.
For generations of young people, a job in a shop or warehouse has meant far more than a first payslip – it’s where they first found their confidence and were given responsibility.
That is why Alan Milburn was right to warn that without urgent action on youth unemployment, Britain risks a ‘lost generation.’
Latest ONS figures show over a million young people are not in education, employment or training, while Milburn’s report warns that figure could rise by a quarter within five years if nothing changes.
His central argument – that the first rung of the career ladder is disappearing for too many young people – is one retailers recognise only too well.
This matters not just for the economy, but for the kind of country we want to be. Too many young people are finding themselves locked out of work before their careers have even begun.
Milburn’s report is clear, it is not a lack of ambition among young people, but a lack of available opportunities. 84 per cent of young people not in education, employment or training (NEET) say they want a job or training. The challenge is connecting them with opportunity.
Retail can and should play a major role in that solution.
As the UK’s largest private-sector employer and a vital part of the everyday economy, retail provides opportunities for more than three-quarters of a million under-25s. Nearly three million people work in the industry across the UK, while one in five people say their first job was in retail.
For many young people, retail offers an accessible route into employment and the chance to build skills that last a lifetime. It remains one of the UK’s largest providers of flexible and part-time work, with around 55 per cent of retail roles part-time.
But maintaining those entry-level opportunities is becoming increasingly difficult. Retail has lost almost 400,000 jobs over the past decade, while rising costs continue to place pressure on hiring and investment decisions.
Over the last two years alone, increases in employer National Insurance contributions and the National Living Wage have added around £6.5 billion in costs to the retail industry, at a time when many businesses are already operating in a challenging environment.
There are also concerns around how the Employment Rights Act is implemented, particularly if it adds further cost and complexity to hiring at a time when employer confidence is already under pressure.
That makes it even more important that government and business work together to protect and expand pathways into work for young people.
Retailers share government’s ambition to reduce youth unemployment and expand opportunity, and there is now a real opportunity for government and business to work more closely together to deliver it.
That should include simplifying what can currently feel like a fragmented system of youth employment support, creating clearer and more effective routes into work, and building stronger partnerships between employers, Jobcentre Plus, the Youth Guarantee, skills programmes and local initiatives.
There is also an opportunity for government and retail to work more closely together on practical delivery – sharing what drives successful outcomes, expanding partnerships that help more young people into work, and ensuring the wider employment environment continues to support businesses to invest in entry-level opportunities.
Retailers are ready to play their part. Britain cannot afford to lose a generation of young talent and ambition, and retail stands ready to work with government to help more young people get the opportunities, skills and confidence they need to build successful working lives.
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