There is a crisis in youth unemployment and the government should reverse increases in minimum pay to get more people into work, the boss of Next has warned.
Simon Wolfson, the Conservative peer who has run Next since 2001, said that policies aimed at improving low-paid work have made it harder to hire people.
In particular, rises in employer national insurance contributions and the minimum wage have hurt the employment market, he said.
Lord Wolfson said that two years ago, Next, which is regarded as a successful retailer in the UK, would receive around 10 applications for every job in its stores – now it gets 19.
“That doubling of applicants for shop jobs is indicative of just how big the crisis is in youth unemployment at the moment,” he told the BBC.
The problem in entry-level jobs such as these is echoed in the graduate job market, with employers worried about the increasing use of artificial intelligence (AI). In April, the Institute for Employment Studies said positions for graduates were down 33 per cent in 2025.
It said: “Almost one million young people (957,000) are not in education, employment or training – a rise of 259,000 between 2021-2024 alone. What emerges is a troubling picture of declining opportunities, structural shifts, and a generation at risk.”
Lord Wolfson added: “Youth unemployment is really a symptom of wider problems with employment in the economy, and of course, if you’ve got fewer jobs, the people who suffer most are the people with the least experience – and that is the youngest.”
The Treasury was dismissive of Lord Wolfson’s argument, saying that raising the minimum wage had increased pay for around 200,000 workers.
The minimum wage went up in April from £8.60 to £10 for 18- to 20-year-olds, and from £11.44 to £12.21 for those over 21.
Also in April, national insurance contributions rose from 13.8 per cent to 15 per cent. Employers claim that this will cost them an extra £28bn a year.
A Treasury spokesperson said: “Cutting wages for the lowest-paid during a time of global uncertainty is not the answer.”
They added that a £2.5bn youth employment support package would “deliver a million opportunities across the country”.
Chancellor Rachel Reeves also said last week: “The idea that the response to a conflict in the Middle East is reducing the wages of the lowest-paid, those who are on the national living wage and the national minimum wage, that is no response to a crisis like this, because it is people on lower incomes who struggle most when the cost of fuel, when the cost of energy and the cost of food goes up.”
Meanwhile, Lord Wolfson also criticised plans to outlaw zero-hours contracts.
“You can’t afford to … have the same number of people in your shop in February as you have in and around Christmas,” the Conservative peer said. “That’s going to be bad news for our colleagues who want extra hours – particularly students, who in holiday time need extra hours – and of course, bad news for customers, because service won’t be as good.”
Thomas Pugh, chief UK economist at RSM, said: “It’s difficult to see how the labour market doesn’t deteriorate from here, given new employment rights coming in and the cost shock from the Iran war.”
Lord Wolfson suggested that the government should focus on growing the economy by relaxing planning laws and energy policy, and by reforming the transport network.