Retail bosses urge Starmer to tackle youth unemployment crisis

More than 80 retail bosses have called on the Prime Minister to set out urgent measures to tackle youth unemployment, warning that the “ladder of opportunity for young people is wobbling”. 

The chiefs of leading retailers including Tesco, Sainsbury’s and John Lewis have called on Sir Keir Starmer to safeguard the position of retail as millions of young people’s gateway into employment.

The letter, coordinated by trade body the British Retail Consortium (BRC), has been signed by more than 80 retail chiefs and was sent to the Prime Minister on Wednesday morning.

The call to action has also been backed by the bosses of Amazon UK, Asda, Boots, Currys, Greggs, Morrisons and Primark.

Industry bosses told the Prime Minister: “Retail has always been where any young person can start with few qualifications, limited experience and build a lasting career either in the industry or outside with the skills they obtain.

“This matters to us, particularly as many of us started on the shop floor, and it is central to our purpose and to how our businesses grow and compete.”

Nearly three million people are employed across the UK retail sector but more than 400,000 industry jobs have been lost in the last decade, according to the BRC.

“As leading employers, we are concerned the ladder of opportunity for young people is wobbling. It’s more expensive than ever to bring in young talent, and new Employment Rights Act changes are making managing our workforce more complicated when we need it to be simpler,” the letter states.

The BRC warned Starmer against discouraging “entry-level recruitment and progression,” and instead urged the government to roll out more support for employment and career progression.

The letter continues: “It’s more expensive than ever to bring in young talent, and new Employment Rights Act changes are making managing our workforce more complicated when we need it to be simpler.

“This is putting pressure on employers’ ability to drive social mobility.”

Helen Dickinson, the BRC’s chief executive, said: “The message from retail is clear: if government is serious about tackling youth unemployment, it cannot keep making it more expensive to create jobs.

“Retailers stand ready to work in partnership with government through a joint retail-government taskforce to strengthen routes into employment, remove barriers to hiring and help more young people take that crucial first step into the world of work.”

Rob Swain, UK general manager at fast-food giant KFC, told City PM that retail and hospitality is “where young people build confidence, develop lifelong skills and discover their potential”.

“We are keen to work with the government and the BRC to bring more young people into our restaurants to open up their opportunity to thrive,” he added.

In recent weeks, retailers have ramped up pressure on Labour to undo its hike to national insurance contributions and ditch its plans to scrap aged-based wage brackets. 

The letter comes just a fortnight after former health secretary Alan Milburn published a report on young people not in education, employment and training. In it, he warned that there could be 1.25m young people aged between 16 and 24 out of work and employment by the end of the decade. 

Milburn will only set out policy recommendations at the end of this year, though he suggested that the welfare budget distorted work incentives and appeared to criticise employers for rolling out video interviews and using AI in recruitment. 

The youth unemployment rate has reached an 11-year high while job vacancies across the labour market have dropped to a five-year low. 

Retailers’ criticism of minimum wage hikes has also prompted a debate over the Low Pay Commission, an independent body consisting of employers and union representatives that make recommendations for pay increases for low-income workers. 

While former prime minister Rishi Sunak said he would now abolish the body and let ministers take control over pay, welfare secretary Pat McFadden told City PM that it would be a “mistake” to abolish the group due to concerns over lobbying. 

A government spokesperson said Labour is committed to addressing the challenges set out in the Milburn report.

They said: “We are already working in partnership with businesses to tackle youth unemployment and create 50,000 more opportunities for young people as part of our £2.5bn youth employment support package.

“From this month, we’re rolling out £3,000 payments, covering wages for six months for those out of work long-term, and cutting hiring costs for under‑21s and apprentices.”