Youth Unemployment

Adrian Bailey Excerpts

Wednesday 9th November 2011 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

We are having a debate about the economic situation and its impacts on young people. My constituency has felt the chill winds disproportionately, as has the constituency of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). My local authority, Sandwell, has the third highest rate of youth unemployment in the country. We also endured high youth unemployment under the previous Conservative Government. The Labour Government made substantial inroads, but the problem is now back with a vengeance.

On the general economic situation, some of the Government’s measures are aggravating the problems, which are a by-product of our poor economic performance. The higher education proposals, for instance, will disincentivise young people from low-income, low-aspiration backgrounds from entering higher education, and there is a great danger that young people from areas such as mine will look to take an alternative route, such as vocational training and apprenticeships. That is not in itself bad, and it may well be of great benefit to the economy, but the cohort of young people who previously would have gone into apprenticeships and training will find that they have nowhere to go. That is already being reflected in the increase in the number of NEETs in the country as a whole, and certainly in my area.

The Government trumpet the progress made on apprenticeships, and I welcome apprenticeships, as they are potentially of enormous benefit. However, the fact remains that the greatest increase in apprenticeships, as of this moment, is in the post-24 age group, and there is a suspicion that this is just a rebadging of the old Train to Gain scheme. In addition, the headline figures do not take into account the number of short apprenticeships—these are not the two or three-year courses that we commonly think of as apprenticeships which will enable people to go into work. My Committee will be undertaking an inquiry into this in the new year, and I hope to be able to drill down to find out exactly what the situation is.

[Mr Hayes]

I am sorry to have to intervene, because I know that time is short. Let me assure the hon. Gentleman that I take his work seriously in that regard and that we, like him, are determined to see apprenticeships of the right quality and to see bureaucracy cut so that more firms can be involved. He is right to say that apprenticeships matter, but the brand matters too and we are as committed to quality as he is.

[Mr Bailey]

I welcome the words of the Minister, whose commitment to this cause I would not doubt for a moment. I am sure that we will have an extremely enlightening inquiry in the new year.

I shall highlight two measures that would cost the Government very little but would help. First, they should continue the funding for the graduate internship scheme—these are funded internships for graduates in small businesses. This has proved to be of enormous benefit to small businesses and to the graduates, and the total cost to the Government would be about £8 million. Given that this is a win-win situation—it helps the small businesses and graduates, and the cost would be lower than that of keeping them unemployed—I would have thought it was an obvious thing to continue. Also it sends messages to young people thinking of going to university that there is career progression after graduation. In the context of the highest level of graduate unemployment since 1992, that is a very important thing for the Government to do.

Secondly, small businesses are crying out for a financial incentive to encourage them to employ young people. The Government have introduced national insurance breaks. The existing scheme has not been very successful, and there is £850 million allocated for it. It should be broadened to existing businesses or, as the CBI says, a possible cash payment should be established for companies that take on young people and give them meaningful employment. These are not the words of tax-and-spend merchants; they are coming from the Federation of Small Businesses and the CBI—the authentic voice of the business community. If the Government do that, without great cost, it could make an impact on youth unemployment.