The £1.5bn Bribe: Why You Are Paying to Fix Labour’s Youth Jobs Policy Mistake
With 77,000 jobs lost and hiring costs soaring, the government’s £1.5bn scheme is a desperate attempt to buy back what they destroyed.
They break your legs, hand you a crutch, and expect a round of applause.
That is the only way to describe the government’s new “mission” to create 50,000 apprenticeships.
Yesterday, amidst the flashbulbs at the McLaren factory, the Prime Minister and Education Secretary unveiled a massive £1.5 billion investment through the Youth Guarantee and Growth and Skills Levy. They spoke of a “decade of decline” and promised to give young people the “parity of esteem” they deserve.
But if you look at the data, this isn’t a rescue mission. It’s a clean-up operation.
My analysis of the latest payroll data reveals that since Labour took power, the youth labour market has collapsed. Ministers are now spending £1.5 billion of your money to try and bribe businesses to take on young people, without even a guarantee of a permanent job at the end.
📉 The Real Stat: -217,000
Ministers are promising 50,000 new spots specifically for 16-24 year olds. But the data shows that 77,000 young people in this exact age bracket have lost their jobs since this government took office in July 2024.
If we take a deeper dive, the rot goes much further. Since the election, we have also lost another 140,000 jobs among workers aged 25 to 34.
When you combine these figures, the running total for the “Lost Generation” is now 217,000.
Why? The Treasury has launched a two-pronged attack on the cost of hiring them.
📈 Blow 1: The 26% “Youth Inflation”
The first blow is the aggressive hike in the National Minimum Wage.
Of course, we all want young people to earn more money. But historically, youth rates have been set lower for a very specific economic reason: to incentivise employers to take a chance on them.
When you hire a 16 or 18-year-old, you are hiring someone with little to no experience. You are investing time and money in training them. The lower wage reflects that “training period.” Once they have the experience and are doing a great job, any sensible employer pays them more to keep them.
But the government has decided to ignore this reality. I’ve crunched the numbers comparing the rates from April 2024 with the newly announced rates for April 2026.
For 18-20 year olds, the minimum hourly rate is jumping from £8.60 to £10.85—a massive 26% increase in just two years. Compare that to experienced adults (21+), who will see a much smaller 11% rise.
By artificially inflating the price of inexperienced labour, the government has removed the incentive to hire inexperienced labour.
💸 Blow 2: The “Jobs Tax” Double Whammy
The second blow hits the employer’s bottom line directly.
In the Budget last year, the Chancellor hit businesses with a “Jobs Tax” double whammy: she increased the rate of Employer National Insurance to 15% and slashed the threshold at which they start paying it from £9,100 down to £5,000.
This has massively increased the cost of employing people across the board.
For labour-intensive businesses—pubs, cafes, shops—this is a disaster. Suddenly, every employee on the books costs significantly more, squeezing margins to the breaking point. When costs go up, something has to give. And usually, it’s the entry-level jobs that go first.
🏙️ The Result: A Hospitality Crash
We don’t have to guess if this is happening. The data proves it.
Hospitality—the traditional engine of youth employment—has shed 74,000 jobs since the election.
These aren’t just statistics. These are the Saturday jobs, the summer shifts, and the first steps on the career ladder that have been priced out of existence by government policy.
🚫 The Welfare Trap
The real, hard consequence of losing work—especially when it feels like the government is stacking the deck against you—is the anxiety and mental disorders it creates.
As I wrote recently, we are already seeing a terrifying surge in young people struggling to cope. Among the total number of people on working-age disability benefits, 333,000 are young people aged 16–24, up from 200,000 in 2021.
At the very stage of life when they should be building their futures, hundreds of thousands are instead beginning adulthood on the welfare system.
By destroying the entry-level jobs that would normally be their lifeline, the government is effectively trapping them there.
⚖️ The Verdict: A Disconnected Government
You have to question if one part of government is talking to the other.
On one side, you have the Prime Minister launching a “mission” for youth. On the other hand, you have the Treasury imposing tax and wage policies that make that mission impossible.
50,000 new apprenticeships is a nice headline. But until ministers admit why 217,000 young people have lost their footing in the first place, this isn’t a strategy. It’s a partial refund on a policy disaster.
They haven’t just taxed jobs. They have taxed opportunity.
✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions
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Jamie do we actually have growth or is the government just spending more borrowed money ie how much is non government spending ?
It's amazing how Governments suddenly discover apprenticeships as if they just invented them when they've only been going for a couple of hundred years. I did an engineering apprenticeship with Rolls Royce along with many other young people nearly 60 years ago which was excellent. Rolls Royce and many other engineering companies offer apprenticeships. Rolls Royce still do. The Blair government reinvented them except they included 30 day apprenticeships stacking shelves at Tesco which is not my idea of a true apprenticeship.