IoD press release  Milburn Review delay should prompt rethink of employment reforms

“The reported delay to the publication of the Milburn Review is disappointing, but understandable. Suggestions that it will recommend an increase in funding for welfare – albeit framed as an investment with a future payoff for young people – would sit uneasily alongside a Budget likely to further increase the tax burden on investors and employers to plug an expected gap in the public finances.

“Action to support pathways for young people into work is critical and has strong support across the employer community. But the policy response must look holistically at both supporting young people into work and ensuring that there are jobs available for them. The first Milburn report noted that young people had become disproportionately more costly to hire in recent years: since 2019-20, the minimum wage rate for young workers has risen between two thirds and three quarters compared with 55% for other workers. Meanwhile the Employment Rights Act continues to add further cost and risk to employment.

“Without sufficiently powerful action to address weak demand for entry level workers, we risk simply shifting young people around the benefits system rather than out of it. If changes to the benefits system warrant further time for consideration, the same should apply to policies affecting employers’ willingness to hire. That means reconsidering the design and implementation of the Employment Rights Act, as well as the intent to equalise the minimum wage for young people with the adult rate.  We therefore continue to call for the implementation timetable for the Employment Rights Act to be slowed, and for a pause and reconsideration of the decision to equalise youth minimum wage rates with adult rates.”