‘Ladder of opportunity is wobbling’: Retail bosses urge Starmer to ease cost of youth employment

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”. 

A group of supermarket and high street chiefs are set to call on Sir Keir Starmer to safeguard the position of retail as millions of young people’s gateway into employment.

The British Retail Consortium (BRC), a leading trade body, staged the intervention through a letter to Starmer, which is expected to be backed by several retail heavyweights.

The draft letter, first reported by Sky News’ Mark Kleinman, is likely to gain support from high street giants including Tesco, Sainsbury’s, Morrisons, Asda and Primark.

The trade body is set to tell 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.”

Labour risks ‘discouraging progression’

Nearly three million people are employed across the UK retail sector, according to the BRC.

“As leading employers, we are concerned the ladder of opportunity for young people is wobbling,” the trade body has written.

The BRC has 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.”

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. 

Lord Simon Wolfson, the chairman of retail giant Next, said these policies – as well as plans to crack down on flexible working – have made it “much harder” to hire.

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. 

Government under pressure over minimum wages

Analysis by Linkedin for a UK government team working on AI suggested that entry-level job vacancies had not fallen at a much larger pace than general jobs. 

It showed that there had been a rise in entry-level roles for retail assistants and sales workers. 

Entry-level job availability has fallen for accountants, software engineers and project managers. 

The government has now set up a separate AI economics institute to monitor the impacts of technology on youth employment. 

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 AM that it would be a “mistake” to abolish the group due to concerns over lobbying. 

“What would happen is much more direct lobbying of government ministers on setting minimum wage rates in a way that might not take into account all those economic conditions, including the employment conditions,” McFadden said.

The government has been contacted for comment.