Youth unemployment crisis is ‘national emergency’ as tax hikes and red tape hit hiring and cost jobs, Labour warned

Labour must make it cheaper and easier for companies to hire new staff to tackle the ‘national emergency’ of youth unemployment, according to a leading recruiter.

With ex-Cabinet minister Alan Milburn due to publish his report into the crisis in the coming days, the boss of recruitment giant Reed.co.uk said the cost of hiring has become ‘one of the biggest barriers to giving youngsters their first job’.

James Reed urged Andy Burnham and John Healey to ease the tax burden on firms and rip up red tape deterring employers from taking on new staff.

The comments came as concerns mount over Britain’s growing army of NEETs – those aged 16 to 24 not in employment, education or training.

The number of NEETs has risen close to one million – sparking warnings of a lost generation that Milburn’s landmark report hopes to address.

And it is feared Labour’s overhaul of workers’ rights will make things worse.

Reed, who is chairman and chief executive of his firm Reed.co.uk, said: ‘We cannot afford to write off a generation of young people before they have even had the chance to start their careers.

‘Yet we have created a vicious circle in which employers want experience, young people cannot get experience without a job, and the cost and risk of taking someone on can put employers off giving them that first opportunity.

‘The NEETs crisis is a national emergency, not just a problem for the young people caught up in it. We need to make it easier for businesses to recruit, train and develop inexperienced workers, rather than making the first rung of the career ladder harder to reach.

‘That means looking seriously at the cost of hiring, expanding apprenticeships and work experience, and giving employers practical support to invest in new talent.’

Research commissioned by the firm found 75 per cent of employers believe it is difficult for youngsters to get started in work.

Asked about the biggest barriers to employing under-25s, they identified the cost of hiring alongside a lack of experience and skills.

And a separate survey of 2,000 UK jobseekers found more than four in five, or 83 per cent, believe it is difficult for youngsters to find work.

Both employers and jobseekers expressed concern about the Government’s response. Some 57 per cent of employers and 60 per cent of jobseekers said ministers were not doing enough to help young people and those out of work into employment.

‘Alan Milburn’s forthcoming recommendations must help turn concern into action,’ said Reed.

‘We need a joined-up approach that gives young people the skills, confidence and support to get into work, while making it worthwhile for employers to give them a chance.

‘In an age of AI, we must back humans and ensure that technology does not become another reason to shut young people out of the workplace.’

Urging ministers to act, Reed added: ‘Recent policy decisions have made companies less keen to recruit. We need to look to start to reverse and ultimately eliminate taxes on more types of jobs.

‘Burdensome new employment regulations also need re-examination. Specifically, it would make sense to exclude temporary and agency work – often a first stepping stone into the workplace for young people.’