UK economic system might get £14bn enhance by tackling youth employment Neet disaster
The hospitality sector is calling on a package of tax cuts from the government to help it get more ‘Neets’ into work for the first time, which cost boost the economy by more than £14billion
Hotel receptionist Hannah Carolan, 20, spent two years unemployed(Image: Provided)
Tackling a first jobs crisis could give the economy a more than £14billion boost, it is claimed.
Nearly one million young people aged 16 to 24 are classed as Neets – not in employment, education or training, or about one in eight people in that age group. The figure has fallen from the start of 2026 but has risen over the past year.
The Labour government has vowed to find ways to address the problem on the back of final recommendations from former minister Alan Milburn. However, research suggests getting more of the near one million Neets into work could also help grow the UK economy; one of PM Andy Burnham and Chancellor John Healey’s key priorities.
Analysis by hotel chain Hilton and consultants WPI Economics estimates that each Neet who gets a first job generates around £152,000 in economic value per year through higher output, tax revenues, lower benefits spending and reduced long-term scarring effects. Yet many young people struggle to take their first step into work due to a lack of prior experience, leaving them caught in an “experience trap”.
Recent data from the Office for National Statistics showed 400,000 Neets are actively looking for work, yet separate research suggests one in four cite a lack of experience as their biggest barrier to getting a job. WPI calculated that that this “experience trap” could be costing Britain up to £14.4billion a year in lost economic output.
And on Wednesday, Children’s Commissioner Rachel De Souza warned that tens of thousands of college teens are hidden from official Neets figures as they only attend for less than half the time. Hilton says it is part of an industry that can help tackle the problem given that hospitality remains one of the industries that offers young people without experience the opportunity to enter the workforce.
It, and trade body UKHospitality, are calling for a package of measures from the government specifically targeted at this sector, including reducing employer national insurance contributions, halving hospitality VAT to 10% in line with Europe, and scrapping the proposed holiday tax. Steve Cassidy, senior vice president for Hilton in the UK and Ireland, said: “Hospitality has always been one of the UK’s strongest routes into employment and we see firsthand how taking that first step into work can have a lasting impact on a young person’s confidence, skills and future career prospects.
“This research backs up just how valuable those first-job opportunities continue to be, not only for young people but for the wider economy. Yet too many young people are now caught in an experience trap, unable to get the experience employers are looking for because they cannot access that crucial first opportunity.”
Allen Simpson, chief executive of UKHospitality, said: “The ‘experience trap’ thousands of young people are caught up in is the result of the last two years adding billions of costs onto critical employment sectors like hospitality. Hospitality is the sector of experience and opportunity, regardless of your background, qualifications or circumstances, but the jobs it creates and supports are being taxed out of existence.
“It’s costing the economy and taking away the first step on the career ladder for a whole generation. The benefits of backing hospitality are clear. Billions in economic benefit, opportunities for young people and thousands of people back in work.
“The new Prime Minister should continue to show his support for hospitality, reduce its tax burden and allow the sector to fulfil its potential to drive economic growth and create new jobs in every postcode.”
Hannah Carolan, 20, a receptionist at Hilton London Metropole, got her job after going on the firm’s Springboard programme. She said “After leaving college I applied for dozens of jobs but found it difficult to secure interviews. After spending two years unemployed, my confidence began to suffer and I wondered whether I would be able to find a career that was right for me. Employers wanted experience, but I was unable to get a first job that would give me my first taste of work – it was a catch 22.”
