On September 29, 2025, Chancellor Rachel Reeves took center stage at Labour’s annual conference in Liverpool, unveiling a sweeping new plan aimed at tackling long-term youth unemployment in Britain. The announcement marks a pivotal moment for the Labour government, which has been under pressure to clarify its vision and bolster the nation’s economic prospects amid sluggish growth and ongoing debates over welfare, migration, and opportunity.
Reeves’ speech, delivered just two months ahead of a budget widely expected to feature tough decisions on tax and spending, set out the government’s intention to guarantee paid work for every young person who has been out of employment or education for 18 months. The policy, known as the “youth guarantee,” is designed to ensure that no young person is left “languishing without prospects,” as Reeves put it in her address, and forms part of Labour’s pledge to abolish long-term youth unemployment altogether.
“I believe in a Britain founded on contribution – where we do our duty for each other, and where hard work is matched by fair reward,” Reeves declared, according to Sky News. “I believe in a Britain based on opportunity – where ordinary kids can flourish, unhindered by their background. And I believe that Britain’s real wealth is found not only in the success of the fortunate few, but in the talents of all our people, in every part of our great country.”
The new guarantee stipulates that every young person who has been on Universal Credit for 18 months without “earning or learning” will be offered a paid work placement. Those who refuse to accept the offer, without a reasonable excuse, could face sanctions, including the loss of their benefits. The policy will be overseen by Work and Pensions Secretary Pat McFadden and, as Reeves emphasized, represents a commitment to “nothing less than the abolition of long-term youth unemployment.”
Reeves’ remarks strike a familiar chord for those who recall Labour’s previous “new deal for young people,” a flagship policy from the party’s last period in power that was credited with helping thousands of young people into work. Drawing on that legacy, Reeves told BBC Radio 5 Live, “There is precedent here, when Labour was last in government we introduced the new deal for young people... it helped thousands of young people.”
Yet, the policy has not been without its critics. Sir Mel Stride, the shadow chancellor, accused Labour of policy contradictions. “Rachel Reeves says she wants to abolish youth unemployment – yet in her very first budget, she introduced a £25bn jobs tax that made it more expensive for businesses to hire, especially young people. That’s the contradiction at the heart of Labour’s plan: they talk about opportunity, but their policies kill jobs. Since Labour came to power, unemployment is up. Business confidence is down. And now Reeves is trying to fix a problem she created – while pointing the finger of blame, as she so often does, at everyone else,” Stride said, as reported by Sky News.
Pressed during a morning round of interviews with BBC Breakfast and BBC Radio 5 Live, Reeves defended her government’s record after 15 months, acknowledging modest economic growth of 0.3% in the last quarter but insisting that it represented “the fastest growth in the G7.” She also cited five interest rate cuts, rising wages, and recent trade deals – including a $150 billion investment from US firms – as evidence of progress. Still, Reeves was candid about the challenges ahead: “I do recognise there is more to do.”
One key question that emerged from the day’s media blitz was whether businesses and industries had already signed up to provide the promised work placements. Reeves admitted that specific details would come later but expressed confidence that the business community would support the initiative. “I’ve got no doubt businesses will get behind this,” she said, according to BBC.
The urgency of the youth guarantee is underscored by the current state of the UK’s young workforce. Reeves cited that one in eight young people are not in education, training, or paid employment, a figure that reached an 11-year high of 987,000 at the end of last year. “We can’t let that stand,” she told the BBC, reiterating the government’s resolve to provide “the dignity, the security and the ladders of opportunity that good work provides.”
The Labour government’s focus on contribution and opportunity comes amid internal party discussions about defining its agenda and values. While Labour leader Keir Starmer has typically avoided political buzzwords, thinktank Labour Together recently argued that the concept of “contribution” should be central to policymaking. Reeves’ speech appears to embrace that recommendation, framing the youth guarantee as a cornerstone of a society built on mutual responsibility and shared prosperity.
Beyond youth employment, Reeves’ conference speech also touched on other major policy areas. She announced plans to fund libraries in all English primary schools and pledged support for British steelmaking and shipbuilding – sectors seen as vital to the country’s industrial future. These commitments, she suggested, are part of a broader push to ensure that Britain’s wealth is “not only in the success of the fortunate few, but in the talents of all our people.”
The day’s political agenda was not limited to employment. Home Secretary Shabana Mahmood unveiled new, stricter conditions for migrants seeking indefinite leave to remain in the UK. Under the new proposals, migrants will need to demonstrate high-level English proficiency, maintain a clean criminal record, and volunteer in their communities. Labour also plans to double the period required to gain indefinite leave to remain from five years to ten, a move that has sparked debate over the future of migration policy.
Meanwhile, the economic backdrop for these announcements remains mixed. Economists at PwC recently upgraded the UK’s economic growth forecast for 2025 to 1.3%, buoyed by stronger-than-expected performance in the first half of the year. Used car trade prices rose by 0.2% in September, with hybrids and affordable electric vehicles leading demand. Yet, the Competition and Markets Authority raised concerns about fuel retailers’ margins, which remain well above historic levels, and research from AI consultancy AINigma warned that artificial intelligence could widen the gender pay gap in some sectors while narrowing it in others.
As the Labour government moves forward with its ambitious youth employment guarantee, the coming months will test whether the promise of opportunity and contribution can be translated into real change for Britain’s young people. For now, Reeves’ bold rhetoric and policy commitments have set the stage for a national conversation about work, welfare, and the future of the UK economy.
The conference’s sense of urgency was palpable, but so too was a cautious optimism that a new deal for young people might just be within reach once again.
