Labour's Treasury Committee chair Dame Meg Hillier said the party is now more open to benefit cuts, citing a new government study on the growing "NEET" problem. The report, led by former health secretary Alan Milburn, warns that up to one in six 16‑24‑year‑olds could be out of work, education or training by 2031, prompting a rethink of Labour's welfare stance.

Milburn report flags one‑in‑six NEETs by 2031

The government analysis projects that 16‑24‑year‑olds could reach a 16.7% NEET rate by 2031 if current trends continue. It also estimates the fiscal burden of inaction could top £125 billion a year. As the source reported, these figures have sharpened pressure on policymakers to address youth disengagement.

Dame Meg Hillier signals conditionality for young adults

Hillier emphasized the need for "clear guarantees" for people with lifelong disabilities while acknowledging that conditional welfare could help younger claimants. She noted that Labour’s earlier resistance to cutting disability benefits in 2021 has softened in light of the NEET forecast. According to the report , the party’s internal sentiment has shifted significantly since Sir Keir Starmer shelved those cuts.

Disability benefit claims hit record high, fueling debate

January 2023 data show 3.93 million people in England and Wales receiving Personal Independent Payment, a 6% rise year‑on‑year. The surge in disability claims has been a flashpoint for Labour, affecting poll numbers and internal leadership dynamics, as the source highlighted.

Unanswered: What conditional reforms will Labour propose?

The report does not detail the specific conditionality mechanisms Labour might adopt, nor does it name any pilot programmes.. It also leaves unclear how the party will balance support for disabled claimants with reforms aimed at NEETs.

Fiscal stakes: £125 billion annual cost if NEET trend persists

Analysts warn that without intervention, the NEET surge could cost the Treasury more than £125 billion each year. This looming expense adds urgency to Labour’s reconsideration of benefit structures, especially as the party grapples with other budgetary pressures like military spending and graduate loan interest rates .