The chief executive of Next has sounded a dire warning over the disappearance of entry-level jobs in retail and logistics, as the government’s new apprenticeship levy reforms face mounting criticism from employers. Simon Wolfson, who has led the clothing giant for two decades, told a business conference this morning that “the traditional first rung on the career ladder is being kicked away” by a combination of rising costs and regulatory changes.
Wolfson’s remarks came hours after employment minister Alison McGovern blamed the previous Conservative government’s apprenticeship tax for the collapse in young people starting work. But the minister, speaking on BBC Radio 4’s Today programme, faced immediate pushback from employers who say her own party’s plans will make things worse.
The dispute centres on Labour’s proposed overhaul of the apprenticeship levy, which would force large firms to spend 0.5% of their payroll on training, with a new “growth and skills levy” replacing the current system. Critics argue this will raise costs for companies already struggling with rising wages, national insurance contributions and the minimum wage hike.
Next, which employs 30,000 people in the UK, has already cut its graduate intake by 40% this year. Wolfson said “we are seeing a generation locked out of the labour market” as firms shift to hiring experienced staff to avoid training costs. He cited data showing vacancies for entry-level roles in his sector have fallen by a third since 2020.
The prime minister’s official spokesman defended the policy, saying it would “unlock opportunity” for young people. But shadow business secretary Kevin Hollinrake seized on the Next boss’s comments, calling them “a devastating verdict on Labour’s anti-business agenda”.
Union leaders offered a different perspective. Sharon Graham, general secretary of Unite, said “the real crisis is poverty pay, not training taxes. Working people need higher wages, not more apprenticeships stacking shelves.”
Official figures published this week show youth unemployment (16-24 year olds) has risen to 14.3%, its highest level since 2021. The number of young people not in education, employment or training (Neet) now stands at 872,000, up 40,000 on last year.
For many young people, the dream of a stable job with training is slipping away. I spoke to 19-year-old Liam, who left school with three A-levels but has applied for 150 jobs without success. “They all want experience I don’t have. How am I supposed to get it if no one will give me a chance?” he told me, standing outside a Jobcentre in Doncaster.
The apprenticeship tax is just one piece of a larger puzzle. Rising employer national insurance contributions and the national living wage increase to £12.21 an hour from April are also squeezing margins. The British Retail Consortium warns that the combined impact will cost retailers £2.3bn next year, with smaller firms hardest hit.
Yet the government insists these measures are necessary to fund public services and reduce inequality. The chancellor has argued that firms that benefit from a skilled workforce should contribute to its cost. The question is whether this contribution will choke off the very opportunities it aims to create.
As I write, the Next share price is down 1.5% on the day. But the damage to the real economy – the economy of first jobs, pay packets and household budgets – is harder to measure. The sound of that career ladder creaking is loudest for those who can least afford to hear it.
