I believe that the exponential increase in welfare dependency is largely down to two factors. First a failure on the part of government since the Covid pandemic to properly administer and police the benefits system. Second, a growing acceptance that one can get by without working, and diminution of any sense of obligation to work.
There is however, a growing third element, particularly with respect to young people actively seeking work, but who have had the rug pulled from under them by the collapsing number of job vacancies. -these now stand at their lowest in twelve years (excluding the pandemic). In a large part this reduction is a consequence of a policy choice by Government: the jobs tax (increased Employer National Insurance Contributions) imposed by Rachel Reeves’s budget in 2024 is estimated to have cost 300,000 Jobs. Which, in turn, has led to an increase of 174,000 more young people unemployed since this government came to power. It has become riskier and too expensive for businesses to hire young people.
Accordingly, the remedy must be to make it easier and less expensive for businesses to employ them.
In the Autumn Statement in 2013 the coalition government scrapped Employer National Insurance for under-21s. We now need to go further, the Opposition has proposed that Employer National Insurance for workers aged 21 to 24 be halved. This cut will cost £2.3 billion in revenue lost to the Treasury, but it will permanently reduce the cost of hiring young people, and it will provide a powerful incentive for employers to take them on. It will make it £1,500 cheaper for employers to hire 21–24-year-olds full time on the minimum wage. I certainly hope that the Chancellor will accept this proposal.
This is part of a broader effort to address the ‘growing youth jobs emergency’ where just shy of a million young people are now not in education, training or employment. We have to prevent young people coming out of education and drifting straight onto welfare. We need to cut red tape to save the Saturday Job; To create 100,000 new apprenticeships; And cut high street business rates to support businesses that give young people their first step on the jobs ladder.
As for the growing number of young people out of work claiming benefit for ‘anxiety’ and mental health issues, work would be the best remedy: It would do wonders for their self-esteem. We should require voluntary work from them as a condition of receiving benefits. Alter all, there is plenty of litter to be picked up.