The co-owner of Gail’s Bakery has warned the mood of UK employers is the “darkest” he has ever seen as surging minimum wages price young people out of the jobs market.

Luke Johnson, a key financial backer of the chain for over a decade, criticised ministers on Wednesday for making it “more expensive and more risky to employ people” after companies were hit with fresh red tape and wage hikes.

“No one in this Cabinet has ever been in a business, none of them have ever created any jobs, and I’m afraid to say there is a bigger disconnect between this Government and the business people I know than any government I’ve ever come across,” he told the BBC.

Mr Johnson added: “I’ve spent 40 years growing businesses and creating jobs, and the mood amongst employers and those who invest in this country is the darkest I’ve ever seen.”

Mr Johnson, a serial entrepreneur who also previously chaired PizzaExpress, also said he did not believe Labour had “ever listened to business”.

The comments come after figures this week revealed that youth unemployment hit an 11-year high, with almost one in six people aged 18 to 24 currently out of work, according to the Office for National Statistics (ONS).

The alarming figures are said to have prompted a rethink by ministers amid fears recent policies are fuelling a worklessness crisis.

On Tuesday, the Times reported that the Government was reviewing a manifesto pledge to increase the minimum wage for young people to bring it in line with older workers by 2029.

Already, minimum pay for those aged 21 to 22 has increased by 33pc over the past two years. In April, young workers will get another 8.5pc minimum wage increase.

Labour was ‘right to be worried’

However, retail and hospitality bosses have warned this is making it less attractive to hire younger, less experienced staff over more experienced older workers.

Allan Simpson, the chief executive of UKHospitality, said the looming minimum wage increase for younger workers will add “another strain at a moment when youth unemployment is already climbing”.

He said: “These lost opportunities for young people are deeply worrying for an industry that has always given people their first chance in the workplace.”

Mr Simpson welcomed a “more measured” approach to equalising youth and adult age rates, saying: “Slowing the process would help protect entry-level roles and keep pathways into work open for young people.”

Helen Dickinson, the chief executive of the retail industry group the British Retail Consortium, also said the Government was “right to be worried about the impact that equalising national minimum wage too quickly would have on employment”.

Story Continues

She said Labour should review the “cumulative impact” of its policies on the jobs market to make sure it is not “making a fragile labour market worse”.

The Government was contacted for comment.

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