Government mulls U-turn on youth minimum wage pledge

Wednesday 18 February 2026 11:20 am

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The government is considering dropping plans to rip up minimum wage age brackets amid a surge in youth unemployment.

Labour had pledged in its manifesto to ditch “discretionary age bands” and align the minimum wage for 18 to 20-year-olds with those over 21.

But a series of reports this morning suggest ministers are weighing up delaying that rise after fresh job figures this week confirmed young people are the most likely to struggle in the UK jobs market.

Such a move would add to a growing list of U-turns from the Labour government, with the latest seeing the party ditch plans to postpone a series of the upcoming local elections.

Just north of 16 per cent of people aged 16 to 24 are registered as unemployed compared to the national average of just over five per cent. In the final quarter of 2025, joblessness among young people soared to 740,000 hitting an 11-year high.

On Tuesday, the Office for National Statistics (ONS) said the rate of unemployment had risen to 5.2 per cent in the three months to December, marking the highest level since 2021.

Increases to the minimum wage – which will rise 4.1 per cent to £12.71 for those over 21 and 8.5 per cent to £10.85 for 18 to 20-year-olds in April – has been cited as one of the biggest cost pressures for employers alongside Rachel Reeves’ national insurance tax raid.

Ministers have weighed dropping the manifesto pledge to align wages in a bid to tackle rising youth unemployment, the Times reported. The BBC has reported a full reversal on the commitment is unlikely though ministers were interested in delaying the move.

Tories: Labour taxes are kicking up unemployment

When pressed on the plans on Wednesday, Reeves curbed the question but did not deny a delay.

“We already have incentives to hire young people with the apprenticeship rate of the minimum wage, but also for no national insurance contributions for the youngest workers,” the Chancellor said.

“But we do recognise there are challenges and that is why we’re extending the number of further education college places, extending the number of apprenticeship places to help young people get the skills and the experience that they need to move into work.”

The Bank of England’s Catherine Mann has said the rise in youth unemployment reflected “disproportionately big increases in the minimum wage for that age group”.

“I think we have to be very careful in the storyline about youth unemployment being the canary in the coal mine for a deeper deterioration in the labour market,” she told the Telegraph.

Shadow Chancellor Mel Stride has attacked Labour policy for the soaring unemployment: “Higher taxes – including a tax on jobs, soaring business rates, and anti-business red tape that piles on risk is making it harder to employ people”.

“Labour’s front bench has no real-world business experience and it’s showing.”