Unemployment: Young People

Lord Freud Excerpts

Tuesday 28th October 2014 Lords Chamber

[Lord Holmes of Richmond]

To ask Her Majesty’s Government what assessment they have made of the recent figures on youth unemployment.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, youth unemployment has fallen by a record-breaking 253,000 in the last year. This brings total youth unemployment down to 733,000, one-third of whom are full-time students looking for work. Excluding these students, 6.4% of all young people are unemployed —this is a lower figure than that immediately before the recession.

[Lord Holmes of Richmond (Con)]

My Lords, these figures are indeed good news. However, as we all appreciate, any case of youth unemployment is a tragic waste of talent, both for the individual and for society. Will my noble friend consider working with ministerial colleagues to insert a condition into all public procurement requiring bidding businesses to offer high-quality apprenticeships? That is a small step but could be significant.

[Lord Freud]

I accept my noble friend’s point that every case of a youngster being out of work is a tragedy, and that is why we have put so much energy into getting youngsters back into work. We support the appropriate use of apprenticeships in procurement and that can be important for local skills and growth, but we do not support the blanket inclusion of apprenticeships in all contracts. It is up to individual departments. For instance, for longer-term contracts, my department the DWP requires suppliers to take reasonable steps to ensure that 5% of their workforce are on apprenticeships, but there are other contracts where that is not appropriate—for instance, contracts with healthcare professionals.

[Lord McAvoy (Lab)]

My Lords, youth unemployment is still extremely high, as mentioned by the noble Lord who put the Question. Can the Minister say what further things the Government are going to do to reduce youth unemployment? Will the Government, for instance, commit themselves to matching Labour’s commitment to guarantee a paid job for every young person who has been claiming jobseeker’s allowance for a year or more—a job they will have to take?

[Lord Freud]

My Lords, when the noble Lord says that youth unemployment is very high, it may be higher than we would like, but if you look at the record, it is now at very low levels. If you look at the real figures, which I have used in this House for the last four years, for all workless youngsters who are not in full-time education—that captures the unemployed and the inactive—that figure is now at 14.9%, or just over 1 million. That figure has only been lower in one year since records began—in 2001. You can see that all the measures we have been taking to get youngsters into the workforce are really beginning to achieve results.

[The Lord Bishop of St Albans]

My Lords, I congratulate Her Majesty’s Government on these figures, which are very encouraging, not least in London where the number of unemployed young people has declined by 57,000, which is significant. However, the figures also reveal that in the north-east of the country, the figures have declined by only 8,000. There, the levels of unemployment among young people remain stubbornly high. Can the Minister tell us what Her Majesty’s Government are doing to help in these areas, where the problem is much worse?

[Lord Freud]

My Lords, we have a number of programmes aimed at getting youngsters into the workforce all around the country. There is a mixture of the Work Programme, the flexible support scheme, the sector-based work academies and work experience. We are using a whole range of programmes to help youngsters into the workforce. They are working not just in London but right around the country. Clearly, we just have to stay on the issue and make sure that we get everyone in every part of the country into the workforce.

[Lord Roberts of Llandudno (LD)]

My Lords, do these new figures, which have a bit of sunlight about them, depend upon our continued membership of the European Union? Is there not something we could do to encourage young people to cross borders to other countries so that they get work experience in different places and build bridges of understanding for the future?

[Lord Freud]

The fundamental driver of these much sunnier figures is clearly our economy, which is now the fastest growing of the major economies. It is vital that we keep that process going. It is also vital that we have a benefits system that encourages and enables people to go into the workforce rather than being blocked from going into it.

[Lord Kennedy of Southwark (Lab)]

My Lords, any reduction in unemployment is to be welcomed, particularly youth unemployment. Can the noble Lord tell the House how many of those new jobs are part of the 5.2 million people on low pay in this country? Low pay is now a huge problem for us to deal with.

[Lord Freud]

The Governor of the Bank of England has said that the only way that we are going to get growth in real wages is by recovering productivity in the economy. One way is clearly to reduce dependency and to get 1.7 million extra people into work. The second way is to get the skills base up, and there are now some really good signs that we are moving that up by serious percentage points. The third way is progression in work, so that people earn more. That is what universal credit is all about.

[Earl Attlee (Con)]

My Lords, is it not the case that we have never had as many people in work as we have now?

[Lord Freud]

We now have 30.7 million people in work. It is not just about the number; we are now at a 73% rate of employment, which is little short of the all-time high.