Baroness Sherlock
To ask Her Majesty’s Government what action they are taking to reduce levels of youth unemployment following the recent closure of the youth employment contract incentive scheme.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
Tackling youth unemployment remains a priority for this Government, and our successful Youth Contract will continue. The wage incentive will end as planned next March, just three and a half weeks earlier than anticipated. The youth claimant count has fallen by 134,000—the largest annual fall since 1997—taking it to its lowest level since 2008.
Baroness Sherlock (Lab)
My Lords, I have asked repeatedly about the Youth Contract wage incentive scheme in this House, and the Minister has repeatedly assured us that all is well. On 20 March, in relation to youth unemployment, he talked about,
“just about the most comprehensive response that has ever been seen”.—[Official Report, 20/3/14; col. 280.]
On 5 February, of the Youth Contract, he said: “Our approach is working”. On 7 April, he said:
“Our approach continues to work”.—[Official Report, 7/4/14; col. 1129.]
On 17 June, we were back to “the most comprehensive response”, et cetera. Now we learn that the wage incentive scheme is being scrapped. Can the Minister tell the House, first, how many of the target 160,000 wage incentive payments have been made? The last note that I saw had a figure of 10,000. Secondly, when did he realise the scheme was not going to reach its target and why did he not tell the House sooner?
Lord Freud
My Lords, I am keen to reaffirm that the Youth Contract is both comprehensive and working. One element, the wage incentive, has now helped more than 65,000 youngsters into jobs. The other elements of the programme are performing powerfully: 148,000 youngsters have started work experience on the programme, and 46,000 have gone into sector-based work academies.
Lord Roberts of Llandudno (LD)
My Lords, while I congratulate the Government on what has been achieved, the Minister surely understands the great devastation of youth unemployment, not only in the UK but throughout Europe. It is destroying hope and potential. Can we not now initiate a new European-wide project to somehow lower that figure across the board and restore hope to so many young people?
Lord Freud
Youth unemployment is different in its nature from general unemployment in that there is a scarring effect for the young if they do not get into the workforce early. We therefore need to make extra effort to get youngsters into the workforce, which many of our measures are designed to do. There has been a real recasting of support for youngsters, whether through training, education or apprenticeships, and we are providing this support for them through the Work Programme, the jobcentres and work experience. We have myriad programmes, and they are actually having an effect. We are now seeing very steep falls. It is not yet good enough but it is moving aggressively in the right direction.
The Lord Bishop of St Albans
My Lords, a significant part of the problem is that there are some posts suitable for young people, but they are often in parts of the country where accommodation is prohibitively expensive or the cost of commuting simply precludes them from taking those jobs. In the light of that, have Her Majesty’s Government considered embracing the concept of the living wage for all people of working age?
Lord Freud
Obviously we have looked at the living wage. If the figure suggested for the living wage were to be adopted, we would have to consider the impact on unemployment and the particular impact on youngsters, who would be hit worst. The NIESR estimated that adopting the living wage as opposed to the minimum wage would knock 300,000 youngsters out of work.
Lord Davies of Stamford
My Lords, it is obviously very important to do everything that we possibly can to help young people into work for the first time or back into work from unemployment.
Lord Davies of Stamford
The coalition has already had time; I am sorry.
But what the Minister describes as a scarring effect can affect people at any age if they spend too long outside the workforce and cannot get back into a job. I have asked the Minister questions about this before and he has avoided them. Can he now tell us whether the Government keep evidence of age discrimination being practised against jobseekers? Can he also tell us what the Government do if they come across a prima facie case of age discrimination? Have they ever prosecuted or might they prosecute if a clear case arose?
Lord Freud
I have written to the noble Lord on this matter. We have not prosecuted in such a case but if we found something egregious we would consider doing so.
Baroness O’Cathain (Con)
My Lords, does my noble friend agree with me that it is about time those on the opposite side celebrated with us that there has been such an increase in youth employment in the last few months? Secondly, the way in which we are doing it is right. As my noble friend Lord Roberts said, the last thing we want is one EU policy. I want to know from my noble friend the Minister whether we are getting down into the local areas to get the local employment partnerships involved in training and giving apprenticeships to unemployed youths, which is what we need to do.
Lord Freud
My Lords, it is exactly right that we need to get to the real problems of youth unemployment and the structural level of unemployment—youngsters who are workless. That figure grew through the longest boom in our history and only now are we beginning to see it come down. We are going for the youngsters who have not been looked after properly in recent decades. The figure I always cite in this House is the full number of workless—both unemployed and inactive. In 1997 that figure was 17.7%. It remained flat through the boom and at the peak it was 17.4%—not much difference. At the end of the recession it stood at 19.1% and now it is right down below any of those figures at 16.8%. That shows that our policies are beginning to work on the people who are structurally disadvantaged in this country.