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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 Tory peer who has run Next since 2001 and is regarded as possibly the best retailer in the UK, says policies aimed at improving low paid work have made it harder to hire people.

In particular, rises in employer National Insurance contributions and in the minimum wage have hurt the employment market, he says.

Mr Wolfson said that, two years ago, Next 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.

That problem in these entry-level jobs is echoed in the graduate job market, with employers worried about the rise of 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 Mr Wolfson’s argument, saying that increasing the minimum wage increased pay for around 200,000 workers.

The minimum wage went up in April from £8.60 to £10 for 18-20 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 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 £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, Mr 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, the UK economist at RCM, 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.”

Mr Wolfson suggested the government should focus on growing the economy, by relaxing planning laws, energy policy and reforming transport.