UK Chancellor of the Exchequer Rachel Reeves announced a significant policy commitment to young workers struggling to break into the labor market.
On Monday, Reeves pledged a large investment in the next generation, announcing a “youth guarantee” that promises work, college placement (or a trade apprenticeship) to “every young person.” Reeve’s words come as the UK struggles with high youth unemployment for those ages 16 to 24.
“I commit this Labor government to nothing less than the abolition of long-term youth unemployment,” Reeves said at the Labour Party rally.
As of September, the country’s youth unemployment rate stands at 13.8%—almost three times the overall unemployment rate and more than a 6% increase from a historic low unemployment level of 7.6% for this age group in 2022. Reeves became chancellor in July 2024 after being appointed to the role by Prime Minister Keir Starmer following Labour Party’s landslide general election victory. But, youth unemployment has been on the rise due to a myriad of factors including education disruption from Covid-19, lack of work experience and skills, and cost-of-living pressures.
Reeves said her party is addressing barriers to opportunity through the youth guarantee, which also promises one-on-one support for young job seekers and a paid work placement, education, or training for every young person who’s been out of work for more than 18 months.
“We won’t leave a generation of young people to languish without prospects, denied the dignity, denied the security and the ladders of opportunity that good work provides,” Reeves said.
The guarantee has been built into her spending review she announced in June that set out over 2 trillion pounds for departmental budgets from 2026 to 2029 and capital investment until 2030, she said in Monday’s speech. The spending review is a precursor to the UK’s annual budget.
In June, Reeves announced 1.2 billion pounds-a-year investment by the end of the spending review to “support over a million young people into training and apprenticeships.” Currently, 948,000 16-to 24-year-olds in the country are not in full-time education or employment—583,000 are economically inactive, and 365,000 are unemployed, according to Youth Employment UK.
Reeves told Nick Ferrari on an LBC podcast on Monday that she is working with businesses to identify work placement opportunities, but didn’t disclose if any businesses had committed to the initiative yet. She said the placements could include sectors like construction, retail, and agriculture.
“We’ve already had this being welcomed by business organizations, but we’re only just announcing this today,” Reeves said on the podcast. “We will work now with the businesses to create these opportunities.”
Reeves’ recent policy proposals have drawn concern from economists, and some business leaders are concerned about the country’s economy under Reeves. Simon Wolfson, CEO of Next, an Enderby-based multinational retailer, said Reeve’s policies risk fueling years of “anaemic” growth. Food retailer Aldi UK chief executive Giles Hurley warned the company’s food prices may rise if the UK Budget raises costs.
The UK Budget for 2025 announced by Reeves is scheduled to be presented to Parliament on November 26. Final approval and implementation of key measures are expected before the end of December.
