Labour statesman Alan Milburn will publish a report next month tackling Britain's youth unemployment crisis as one million young adults remain out of work. The upcoming study focuses on 16 to 24-year-olds who are Not in Education, Employment or Training, commonly classified as Neets, addressing what has become one of the most critical economic challenges facing the UK.
Consigning one million young people to an economic wilderness at the start of their working lives threatens national prosperity and stifles growth across every postcode. Columnist Ruth Sunderland warns that failing to integrate young people into the labor force represents a great betrayal of the younger generation.
According to the Institute of Economic Affairs, an independent think tank based in London, the likelihood of a young person becoming Neet is deeply tied to regional and economic inequality. In North East England, the Neet rate has reached 20 per cent, which is more than twice the proportion recorded in the South West.
The regional divide is highlighted by job availability, with six Neets competing for every starter job vacancy in the North East, compared to a national average of three applicants per entry-level vacancy. In industrial towns such as Middlesbrough, where the local economy was devastated by the collapse of the steel and chemical industries, around 20 per cent of children are now growing up in workless households.
A range of complex social factors contribute to the crisis, including drug use, dysfunctional family environments, and generational unemployment where no family member has worked for decades. Sunderland argues that unlike Greater Manchester Mayor Andy Burnham, it is pointless to continue railing against Thatcherite economic policies enacted in the 1980s.
Youth Unemployment and Economic Factors
Sunderland also cautions against drawing a simplistic straight line between Neet levels and recent tragic events on Teesside. While the vast majority of young people without employment are law-abiding citizens doing their best to secure work, a lack of hope and opportunity creates fertile ground for gangs, drugs, and violent crime.
The recent rise in Neet numbers has occurred mainly among young men, whose jobless figures increased by 25,000 over the past year. Experts warn this trend risks creating a large cohort of men excluded from traditional milestones of young manhood, including purchasing a home, fatherhood, and providing for a family, while stressing that stigmatising youngsters for being Neet is unhelpful and unjust.
Difficulty in securing a first job is no longer limited to disadvantaged communities and is now severely affecting young people from middle-class backgrounds. Openings for university graduates have fallen off a cliff, with figures from job site Adzuna showing that a paltry 8,383 graduate roles were advertised in July, down from more than 55,000 entry-level graduate positions offered in the summer of 2017.
The Government's primary anti-Neet initiative, the Jobs Guarantee scheme, is unlikely to produce meaningful results. Sunderland calls for a frank public discussion on the link between Neet status and mental health problems, starting from the premise that engaging in purposeful work is positive for psychological well-being.
Ultimately, attempts to resolve the youth jobless crisis will fail unless the Government acknowledges that its own policies have squelched employment opportunities. By significantly increasing the financial costs and administrative risks associated with hiring young people, recent legislation has discouraged businesses from taking on junior staff.
Artificial Intelligence Boom and Credit Risks
In the global technology sector, a surge in shares of US chipmaker Nvidia following market-surprising financial results led investors to believe that worries over an artificial intelligence bust could be set aside. However, Sunderland warns that while an AI market collapse may not be immediate, it is only a matter of time before a correction occurs.
A major source of concern is the practice of circular financing, a complex and opaque arrangement where a tech company bankrolls its own customer base. Under this model, a supplier lends money, guarantees corporate loans, or takes equity stakes in client businesses so that those clients have the funds required to purchase its products.
Nvidia has arranged deals with six prominent Wall Street financial institutions, including Goldman Sachs, BlackRock, KKR, and Apollo, which have pledged to lend more than $500 billion to help customers buy chips and construct data centres. Crucially, Nvidia is backstopping a chunk of any financial losses, a structure uneasily reminiscent of the off-balance-sheet debt mechanisms that triggered the 2008 Great Financial Crisis.
US investor Michael Burry, who famously foresaw the 2008 mortgage collapse, has warned that a similar financial disaster is currently brewing in the AI industry. Furthermore, the Bank for International Settlements, an international organisation of central banks based in Basel, Switzerland, warned that an AI market bust could prove as disruptive to global credit as the 2008 subprime crisis.
Cryptocurrency Gains and Revenue Collection
Separately, newly released figures from HM Revenue and Customs reveal that 240 cryptocurrency investors in the United Kingdom each generated gains of £1 million during the 2024/25 tax year. In addition, approximately 17,600 taxpayers achieved an average gain of £78,000 from trading bitcoin and rival digital currencies.
While congratulating investors who profited from digital assets, Sunderland expressed pleasant surprise that these citizens formally declared their crypto gains to the tax authority. However, financial observers question how many other individuals made profits on digital currencies without declaring them to the taxman.
