UK government divided over minimum wage increase in face of youth jobs crisis

Rising rates of youth unemployment have created a split at the top of government over how fast it should meet its promise to give young people the full minimum wage. Peter Kyle, the business secretary, is understood to believe now is not the time to give 18- to 20-year-olds the full minimum wage, which Labour promised to do in its manifesto. Others believe there is little evidence to show that recent pay rises for low-paid workers have had any effect on unemployment. Torsten Bell, a Treasury minister, told the BBC on Friday morning: “If you look at what the Low Pay Commission said in their annual report, they didn’t find evidence that previous increases in the minimum wage for young people had had an effect on their employment.” The splits have emerged following a landmark government-backed report this week by the former Labour minister Alan Milburn, who found that youth unemployment was costing Britain more than £125bn a year. Milburn’s report revealed the number of young people not working or studying had surpassed a million for the first time in more than a decade, prompting calls to reduce the pace of youth minimum wage increases. Milburn himself told the News Agents podcast this week: “To get the jobs there for them, you’ve got to make sure the employers are willing to take the risk. If you’re in, say, the hospitality sector or the retail sector, margins tend to be very low. …