Xavier Turner: Labour’s war on graduates

Xavier Turner is Deputy Chair of the Welsh Young Conservatives and a Conservative town councillor in Monmouth.

For graduates across the country, the first rung of the career ladder has disappeared. Kemi Badenoch was right to argue that stamp duty should be abolished, and she is also right to argue that the minimum wage should not be raised above inflation. Labour has priced young workers out of the jobs market.

The data is stark. According to the Institute of Student Employers’ Student Recruitment Survey 2025, graduate vacancies fell by 8 per cent –  the worst year since the pandemic, when recruitment dropped by 12 per cent – with intense competition pushing application success rates to the lowest level ever recorded.

Research by Luminate Prospects reinforces this picture: the most recent cohort with available data (2023 graduates) saw unemployment rise, with only 56.4 per cent in full-time work, of which at least a third are underemployed.

I experienced this first-hand. After graduating in July 2024, I took temporary work in a local factory while applying for graduate roles. During my final year at university, I had applied selectively, constrained by the time-intensive nature of applications but reassured by the volume of opportunities available. By September, that landscape had changed dramatically; there were only a handful of suitable roles, a reduction so severe it was genuinely shocking.

Despite applying widely, spending hours on each application and passing online assessments, I was offered just four interviews. Two were withdrawn because firms said they could no longer afford to run the scheme; one employer stopped responding altogether. The sole interview that went ahead was in the public sector and offered only nine positions for the thousands of applicants.

Eventually, I was fortunate enough to secure a full-time job – still paid at the minimum wage – but only through a referral, extensive unpaid work facilitated by a factory willing to be supportive with a flexible zero-hours contract, and after spending hundreds of hours applying. Conversations with graduates from across disciplines and universities reveal an almost universal experience: few interviews and even fewer job offers.

Global growth has been weak, after a series of once-in-a-generation supply shock, from pandemic disruption to the energy price spike, sapping confidence and slowing hiring. At the same time, rapid advances in artificial intelligence are already automating many of the administrative entry-level tasks that used to provide a first step into work.

Yet rather than easing these pressures, Labour has compounded them. In the 2024 Budget, Rachel Reeves chose to raise taxes on employers- sidestepping their now broken manifesto pledge not to raise taxes on “working people”- by increasing employers’ National Insurance. The result is an estimated £25 billion a year added to payroll costs, directly raising the price of taking on staff.

Perversely, the Budget’s changes to employer National Insurance have hit entry-level roles hardest. By lowering the secondary threshold and raising the contribution rate, the policy increases the cost of hiring low-paid workers by a significantly larger proportion than higher earners, making it disproportionately expensive to hire those who most need opportunities.

This is the same group that, in large part, accounts for the ballooning Universal Credit and PIP bills, which necessitated the tax rise: young people and graduates starting their careers. As if that were not enough, the Chancellor also moved to raise the national minimum wage well above inflation.

In isolation, this is not unreasonable. But in the context of stagnant growth, rising employer taxes and accelerating automation, it has delivered yet another blow to graduate prospects. In 2024-25, a minimum-wage full-time worker earned £25,387 a year, while the average salary –  including London – stood at £39,039. The combined result is wage compression at the bottom of the labour market.

That compression becomes clear when examining real employer costs. A minimum-wage graduate now costs around £29,000 a year, once pension contributions and the increased employer National Insurance are factored in. An experienced worker earning the national average salary costs roughly £45,000, a gap of just over £16,000. In practice, an experienced alternative would likely earn closer to £30–35,000, narrowing the gap further. Once the costs of training, reduced productivity, and risk are factored in, hiring a graduate is often the more expensive option.

The impact is most pronounced in the graduate market, but it’s not confined to those who went to university. It forms part of a wider youth employment crisis. Comparative data from similar-sized economies suggest that it’s being exacerbated by policy choices rather than external forces alone. British youth unemployment is now rising at the fastest pace in the G7, at around 15 per cent, and the UK has fallen to 27th out of 38 OECD nations on the 2025 Youth Employment Index – a trend that is itself part of the steady rise in unemployment across the broader economy since 2024, which reached a four-year high in November 2025.

Labour has abandoned graduates and young people in an attempt to shore up its splintering parliamentary party. This presents the Conservative Party with an opportunity to reconnect with a generation who are feeling increasingly neglected in the public debate. Abolishing stamp duty is a good first step, but to seize this opportunity, it must be followed by a pro-business environment: lower taxes on employment, welfare reform to refocus incentives, and long-term planning and energy reforms to boost growth.

Only by communicating this message relentlessly, through a series of thought-out and innovative policies targeting young people, will it land and then stick. Potential policies such as expanding apprenticeships to realign away from the bloated university sector, targeted tax relief for entry-level roles, and age-adjusted tax-free allowances should all be on the table. Pensioners rightly receive targeted support for their unique challenges –  young people now need the same level of seriousness of purpose.

Kemi Badenoch is therefore right. A Conservative Government should not imitate Labour’s approach of chasing wage headlines while ignoring whether jobs exist at all. Growth is the route to higher wages, job creation and tax revenue, not stealth taxes and endless state intervention.