Jessica O'ConnorRising unemployment is hitting young people hardest, according to the latest Office for National Statistics (ONS) labour market figures, prompting calls from the CIPD for stronger government action to support youth employment and skills.
Responding to the data, James Cockett, senior labour market economist at the CIPD, said unemployment had increased again this month, with limited policy measures in the Budget to encourage employers to invest in younger workers.
He warned that planned increases to youth wage rates from April next year could further raise the cost of employing young people.
He said: “Unemployment has risen again this month, and the data shows it’s younger people who are being hardest hit.
“There was little in the Budget to encourage employers to invest in young people. Instead, there was a significant uplift to the youth rates, set to come into effect from April next year, further raising the costs of employing young people.”
Cockett said the government must go further to help young people access training and employment, despite welcoming new funding to support apprenticeship starts for under-25s in smaller businesses.
He added: “It’s clear the Government needs to take stronger action to support young people in securing valuable training and employment opportunities.
“While it was positive to see the government announce funding to support apprenticeship starts for under-25s in smaller businesses in the Budget, it needs to go further. It can do this by introducing an Apprenticeship Guarantee for 16 to 24-year-olds, which is supported by many employers.”
Looking ahead, the CIPD warned that rising redundancies and stagnant real wage growth point to deeper challenges in the labour market.
Cockett said: “Looking ahead to 2026, with redundancies soaring to their highest rate since early 2021 and real wage growth stagnating, it’s clear the Government needs to develop a meaningful plan to boost growth.
“This means working in partnership with employers to boost the investment in skills and technology adoption that’s needed across the economy to improve productivity and living standards.”
He also urged continued dialogue with employers on the Employment Rights Bill to avoid unintended consequences for hiring.
Cockett concluded: “The Government should also continue to commit to an ongoing tripartite process on key measures in the Employment Rights Bill still to be decided in secondary legislation, to ensure they don’t further hold back hiring. Some measures proposed in the bill could act as a weight on employers who have genuine concerns on how these changes will affect their business.
“While there have been some positive developments around unfair dismissal there’s still a need for continued consultation, and compromise, to ensure the bill doesn’t reduce employment opportunities.”
