‘No such thing as a free lunch,’ says Milburn as he warns it will take a decade for UK benefits bill to come down

Author of major review into youth unemployment rejects ‘crude cuts’ to payments and downplays opposition to his proposals within Labour

Alan Milburn has said “there is no such thing as a free lunch”, in response to critics who believe the government should make tougher cuts to out-of-work benefits for young people.

The former health secretary will publish a major review on Tuesday, urging ministers to implement radical reforms to address the UK’s youth unemployment crisis, which has seen the number of young people not in employment, education or training (Neet) rise to about a million.

He told the BBC’s Sunday With Laura Kuenssberg programme the government would have to be “candid with people”, and that it would take 10 years for the benefits bill to come down and for the country to reach a “reasonable level” of youth unemployment as a result of his recommendations.

He also warned the additional investment in young people would cost billions of pounds over a 10-year period.

Milburn said it was impossible to “wave a magic wand” and fix the crisis sooner. “You can if you just do crude cuts,” he clarified. “But if you do crude cuts in benefits, all that happens is that young people show up somewhere else on the government ledger.”

Asked what he would say to critics such as the opposition leader, Kemi Badenoch, who has repeatedly called for benefits to be slashed over a short period of time, he said: “There’s no such thing as a free lunch. If you are going to will the ends, you’ve got to will the means.

“I don’t think there’s a single person in this country who believes that it’s tolerable to have 1 million young people, aged 16 to 24, who are not in education, employment, or training.”

The Labour government is expecting opposition to Milburn’s recommendations from its own MPs on the left of the party, who rebelled against Keir Starmer’s plans to reform welfare last summer.

Asked about the mood in the parliamentary party, the former cabinet minister said: “When I talk to Labour MPs about this, they know quite well that in their constituencies there are hundreds, sometimes thousands, of young people who are being doomed to a life on benefits.”

Milburn’s long-awaited report on youth unemployment will promise almost half a million job and education opportunities within a decade, but will also advise sweeping changes to the benefits system for under-25s.

It will recommend that some young people with disabilities should lose their ongoing personal independence payment (Pip), and instead be able to apply to local funds for short-term expenses and equipment.

While entitlement for those with the most severe needs will be protected, most under-25s will be no longer eligible for either Pip or the health element of universal credit and will instead get a new youth allowance paid at the standard universal credit rate.

Speaking to Sky News, the work and pensions secretary, Pat McFadden, acknowledged the overhaul would have an “element of compulsion” for Neets, suggesting government intervention to compel young people to work or train would be strengthened.

He told the channel’s Sunday Morning programme that countries that had dealt with youth unemployment successfully, such as the Netherlands, had teams who “literally knock on your door” and offer young people options for training or work.

McFadden also appeared on Sunday With Laura Kuenssberg, where he warned that some people would receive fewer benefits as a result of the proposals.

Asked whether he agreed with some under-25s losing out, he said this was necessary because the number of young people claiming Pip had doubled since the start of the decade, while the number of young people on the health element of universal credit had gone up by 80%.

Asked whether he agreed with Milburn that young people should not be able to claim health-related benefits, McFadden said: “That’s not what he’s saying. He’s saying if you have a long-term disability, that means you can never work. You will actually get more than you will now.

“He’s saying that if you have extra costs, there will be a benefit you can apply to for extra costs. He’s also saying there should be a local fund for short-term needs. And for other people, he’s saying there should be more support to get into work.

“But the status quo is important for this reason … If you’re 20 right now and you sign on to long-term sickness benefits, you’ve got more chance of marking your 30th birthday and still being on them than having a steady job in between.”