The BRC has warned that government efforts to get more young people into work risk being undermined by rising employment costs and new regulation, as Alan Milburn’s interim report on youth inactivity laid bare the scale of the UK’s jobs crisis.

The review found that nearly one million 16 to 24-year-olds in the UK are not in education, employment or training, with the number rising and the country at risk of creating a “lost generation”.

Responding to the report, BRC chief executive Helen Dickinson said retail remained one of the most important routes into work for young people, despite a shrinking jobs market.

“The first rung of the career ladder may have thinned, but retail continues to provide opportunities for over three-quarters of a million people under 25,” she said.

“As the largest private-sector employer, the industry has an essential role in providing young people with experience, training, and a career path that sets them on the right track for life.”

However, Dickinson warned that retailers were facing mounting pressure at the very moment ministers were looking to businesses to create more entry-level roles.

She said the industry had lost almost 400,000 jobs over the past decade, while higher employment costs and greater regulation had made it harder for retailers to recruit.

“It has never been more difficult to hire than today,” she said.

The BRC said measures such as the Youth Jobs Grant and Jobs Guarantee were welcome, but warned they were being weakened by the sharp increase in the cost of employment.

Dickinson said that in April 2025, the cost of employing someone in a full-time entry-level role rose by 10 per cent, while the cost of hiring part-time staff climbed by a further 13 per cent.

She also warned that parts of the Employment Rights Act could limit the creation of entry-level roles unless implemented carefully.

“Government must join the dots between tax, red tape, and its efforts to reduce unemployment,” she said.

Milburn’s interim report described youth inactivity as a “generational fault line”, arguing that Britain does not have a coherent system to move young people from education into work.

It found that the first rungs of the career ladder had weakened, with entry-level roles becoming less available and more demanding. It also warned that recruitment had become more remote and automated, leaving young applicants screened by portals, tests and algorithms before they ever speak to a person.

The BRC said retailers had a critical role to play in reversing the trend, but said government policy needed to support, rather than frustrate, employers’ ability to take on young people.

Dickinson added “As the major employer of young people in the UK, retailers have a vital stake in their future.

“We welcome Alan Milburn’s stark and honest diagnosis of the issues and call on Government to work with us to help solve this challenge.

“Joining the dots across different policies and working with the industry will help turn around the fortunes of young people everywhere.”