Rachel Reeves and Keir Starmer have been accused of “robbing young people of their future” by making it harder for firms to employ young staff. The “scandal” will only grow worse if the Government presses ahead with a planned Employment Rights Bill, which employers have warned will kill jobs, said Shadow Business Secretary Andrew Griffith.

He said: “Young people are in the line of fire”. Urging Chancellor Rachel Reeves to change course, he said: “Her decisions are making it much less appealing for businesses to take on new staff – especially those seeking their first role.”

The warning comes after 90,000 roles were lost in businesses such as hotels, restaurants and bars, which give many young people their first job. Trade body UKHospitality has warned that increases in National Insurance and the minimum wage are largely to blame.

Accountancy giants such as KPMG, PwC, Deloitte and EY have cut graduate recruitment, hiring a thousand fewer graduates, school leavers and apprentices than in previous years.

And the number of young people aged 16 to 24 not in any form of education, employment or training has risen to 948,000, up by 25,000 over three months, with the increase described as “a societal and economic disaster” by former Labour Education Secretary David Blunkett.

Employers have warned the Government’s new legislation will make their problems worse. It gives workers more rights from the first day they start a new role, potentially protecting more staff from unfair dismissal but also making firms reluctant to take a chance on young workers, according to critics. Changes proposed by the House of Lords are expected to be overturned when the Bill returns to the Commons later this year.

Mr Griffith said: “The government should be clearing a path for young people to enter the job market. Instead, Labour are robbing young people of their future – all while heaping up the national debt, for the same young people to pay for later.”

He added: “When we encourage young people to get good grades, or go to university or training colleges, we tell them it will help them build a good career and open up opportunities for life.

“But tragically many are finding that crucial first job extremely difficult or even impossible to get, despite having all the necessary qualifications – and having built up huge debt to pay for them.

He said the increasing use of AI had affected the job market but this did not explain why firms were reducing recruitment more in the UK than in other countries.

Mr Griffith said: “Young people could be the key to getting our economy moving. But since the election, it’s become much harder to get them into work thanks to Reeves’ tax hikes and Labour’s planned employment reforms.

“Labour’s Jobs Tax and dreaded Unemployment Bill will make each worker £1000 more expensive to employ – money that could otherwise go to giving young people a chance.”

Ms Reeves is to focus on economic growth in her November Budget with a pledge to support the regions of England, and will host a business summit in Birmingham on October 21 involving firms such as Eon, Lloyds and KPMG, HSBC and IBM.

She said: “Under this Government no region will be locked out of investment. Business confidence is at its highest level since 2015, private sector activity expanded at the fastest pace in a year in August, and top CFOs have ranked the UK as the top investment destination in the world.

“Our opponents want to talk down Britain’s economy. But whilst the economy isn’t broken, for many it feels stuck, which is why I’m determined to attract more investment into every region of the UK so we can build an economy that works for, and rewards, working people.”