Young People in Scotland: Employment Opportunities

My Lords, the Government have published a comprehensive assessment of the Employment Rights Act in consultation with experts. The assessment shows that the Act could benefit 18 million workers across the UK and could increase employment. Our analysis further shows that young workers stand to be amongst the biggest beneficiaries of these reforms. Scotland is also expected to benefit more significantly, with around 55% of workers projected to gain from the Act.

I begin by warmly welcoming the Minister to his first Question at the Dispatch Box. In the latest labour market trends published by the Scottish Government, the unemployment rate of those aged 16 and over in Scotland was estimated at 5.1%, up 1.4% over the year, and above the UK rate of 4.9%. We know that the Employment Rights Act will take effect over the coming months. The views of these Benches on the deficiencies in that legislation are well-known. What contingency measures are Ministers putting in place, should the Employment Rights Act lead to even higher levels of unemployment among young people in Scotland?

I thank the noble Lord for the question. He and I debated these issues in a very different Parliament not so long ago, and I am sure that neither of us imagined we would be debating in this Chamber today. As he knows, a lot of these responsibilities are devolved, so we have to make an assessment of the impact of the Employment Rights Act; but let us not forget that the Scottish Government are responsible for schools, high schools, colleges, universities, apprenticeships, the apprenticeship levy rates and so much more. Therefore, although we are confident that the Employment Rights Act will not have a detrimental impact on young workers, we need fundamental reform in Scotland in those other areas.

My Lords, does the Minister acknowledge that numerous tax and regulation actions are undertaken by both the UK Government and the Scottish Government that have an impact on job prospects for young people in Scotland, yet both Governments operate separate, unconnected programmes in Scotland to address youth unemployment? Would it be better if the two Governments worked together to find ways of jointly attacking the problem of youth unemployment, and, given that the Minister has experience of both this House and the Scottish Parliament, is he not the right Minister to lead that initiative?

I thank the noble Lord for that question. He can pay me all the compliments he likes—I will happily take them. Of course, on principle we should work together whenever it is in the national interest, and there will be different responsibilities of the Government here at Westminster and the Government in Scotland. For example, we have responsibility for the Employment Rights Act and the campaign to make work pay, along with increasing the national minimum wage for young people. We have the jobs guarantee scheme, and we have committed an additional £2.5 billion over the next three years to the youth guarantee scheme, as well as reforming the growth and skills levy. Of course, responsibility for how that levy is spent in Scotland is for the Scottish Government. Therefore, I accept the principle of the argument the noble Lord is making, and we stand ready to work with the Government in Scotland to deliver for Scotland’s amazing young people.

My Lords, the unemployment figures for young people in Scotland make pretty grim reading—the NEET figures are going up. In the West Highlands and Islands of Scotland, there are great employment opportunities, whether it is renewable energy, fishing, tourism or dry dock facilities. However, there is very little infrastructure, there are very few houses, and there seems to be an ignorance of the problems facing the area. Can my noble friend mobilise his department and other Whitehall departments and work, as the noble Lord, Lord Bruce, has said, with the Scottish Government to make sure that those sins of omission are corrected?

I thank my noble friend for that question and agree with her wholeheartedly. I repeat what I said to the noble Lord: we stand ready to work with the Scottish Government on these issues. I will give the example of an area that is of course of real importance to my noble friend: the Western Isles. There we have a particular challenge, with a ferry service that is not competent, meaning that there is loss of trade almost every week. Services are being taken away—for example, around our skills system—and resources are being taken away from the university based there and in the highlands. In addition, too many young people are being forced to leave the Western Isles because they cannot get adequate housing to bring up their young families. This shows that we need a joined-up approach, and the Government stand ready to do that. However, I again urge the Scottish Government to take much more action on all these issues, rather than undertaking stunts in other parts of the country such as the one they engaged in today.

My Lords, I welcome the Minister to his place. To some extent he has touched on this in his previous answer, but does he agree that the Scottish First Minister would be better placed dealing with practical priorities such as co-operating with the UK Government on issues such as youth unemployment, rather than engaging in performative pantomime politics such as meeting the leaders of Plaid Cymru and Sinn Féin today?

I emphasise again that of course, I and the First Minister of Scotland have a different view on the constitution of the UK and the constitution in Scotland. However, to be honest, the most meaningful thing the First Minister of Scotland, and indeed the First Minister of Wales and the First and Deputy First Ministers of Northern Ireland, can do is deliver for their populations. When in Scotland we have rising youth unemployment, ever-longer NHS waiting lists and too many children leaving school without the opportunities they deserve, those are the issues the Scottish Government should be grappling with every day, rather than gathering in Cardiff to sign a piece of paper and perform a stunt, acting against the interests of the good people of Scotland.

My Lords, I, too, welcome the noble Lord to his ministerial position; I think this House is greatly enhanced by people who served in the Scottish Parliament, personally, and I wish him luck in his role. The area where I live, the Scottish Borders, has the lowest average working wage, and we also have too high levels of outward migration of those in the workforce, including young people. Working across the border, businesses have to navigate both devolved and reserved legislation, and when Governments are not working together in an area such as the Scottish Borders, that exacerbates the problem rather than resolves it. What initiatives can the Minister take with his colleagues here to ensure that in the Border area, cross-border work is enhanced rather than diminished?

I thank the noble Lord for his question. The Borderlands Inclusive Growth Deal is a good example of local authorities, the Scottish Government and the UK Government working together to drive investment into the Borderlands area—exports out and investments in—to create more opportunities. Let me emphasise again: in far too many parts of Scotland, young people are forced to leave because there is no access to local skills, well-paid local jobs or local housing. Many of those young people leave and never go back, and that is unfair for far too many parts of our country.

My Lords, the Interministerial Group for Business and Industry last met on 3 February by videophone. The communique lays out the four items that were discussed, which did not include this very important area. Will the Minister, whom I welcome to his position, tell us when the interministerial group will meet again and whether he will undertake to make sure that this issue is on the list of items to be discussed when it does?

I thank the noble Earl for his question. We were due to meet last week, but, sadly, Ministers in the devolved Administrations had to rearrange. I look forward to meeting very soon, and I will ensure that youth unemployment is high up the agenda.

My Lords, does my noble friend agree that, as ACAS research has shown, commercial and competitive success in delivering job opportunities is much more likely to be achieved in workplaces where people feel valued and respected and their voice can be heard—key objectives being delivered by the Employment Relations Act, in Scotland as in England and Wales?

I wholeheartedly agree with my noble friend. Let me again demonstrate how important these reforms are. In April 2026, the Government strengthened statutory sick pay, introduced day-one rights to paternity leave and unpaid parental leave, and launched the Fair Work Agency. Further measures will be delivered in phases through 2026 and 2027, giving businesses and workers time to prepare. Let me emphasise a point I have not had a chance to make so far. The significant rise in the national minimum wage for young people is good, I believe, for employers and workplaces and for employees. I think it is perfectly fair that if a person is doing the same work, they should rightly expect to have the same pay.

I welcome the Minister to his place. I know him well and I have done business with him in the past, and he is very welcome in this House. Does he agree that increasing taxes is a drag not only on job creation but also on growth?

Let me first emphasise that that was political business in the past, in case I get in trouble with the relevant authorities about my entry in the register of interests. Of course, you have to look at all these areas with the right balance to make sure we have the right fiscal arrangements in place, the right levels of pay and the right conditions. We also have to make sure that there is a more joined-up approach. To give an example, it is right that we increase the pay for young people—most disproportionately, young people working, for example, in the hospitality and retail sector; but if we are honest, nor is there a balanced or level playing field in our business rate system for the retail and hospitality sector.