Youth Employment

Brooks Newmark Excerpts

Tuesday 15th July 2014 Westminster Hall

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is indeed a pleasure to serve under your chairmanship this morning, Mr Crausby.

I congratulate the hon. Member for Norwich North (Chloe Smith) on securing this important debate on youth employment, but it would be remiss of me if I did not commence my speech by highlighting the unemployment figure for young people in this country. Starting their adult life unemployed is not what we want for our young people, but more than 800,000 young people across the UK aged between 16 and 24 were unemployed in the first quarter of this year. That is a worrying statistic, not only because it reads badly, but because it is worrying for the young people themselves and their parents. For the first time in generations, parents from all types of background fear that their children will do worse than them.

We know what we need to do. If we truly want to get our young people into work, we need a highly skilled work force that will enable us to compete with the emerging nations of China and India, as well as advanced industrial nations such as the United States and Germany. What we need is a long-term plan for jobs. We also need to focus on the skills agenda and do more to help the 50% of young people who do not go to university. I never went to university. It could be said I was lucky, going straight into the world of employment on leaving school, but when I left school, finding work was not about luck; there was a plan in place for jobs. In my area of the country, when the school gates opened on the last day of the summer term, other gates in the various sectors involved with the shipyard industries also opened and a transfer took place. Skills were gained and young people had a choice about what they wanted to be in their future career. That that does not happen today.

We know that in the past in my area of the country, we tended to put all our eggs in the one basket—heavy industries. We did the same in the 1980s, replicating the process with the electronics industries. We filled the gap created by the decline of the heavy industries with these “sunrise” industries. Throughout the history of both the heavy industries and the electronics industry, we innovated, pushed the design boundaries and found new markets. With ships, we redesigned them and took them to a new level, replacing many items on the ships with new, cutting-edge design. We did the same in the electronics industry. Without the work done in my area of the country, people would not have the phone in their pocket—if we had not pushed processors and improved them, including pioneering the use of surface-mounted multi-layer technology—but somehow that innovative desire to create new markets and so create new employment evaded us in the following years.

I will focus on Scotland for a moment, because we outperform the UK on youth employment and youth activity rates. Scotland has a higher youth employment rate and a lower youth inactivity rate than the UK as a whole, but we are never complacent. This process is about focusing on what matters, which is employment for our young people.

The best possible start to someone’s adult life is employment, whether that comes after leaving school at 16 or after leaving university. The hopes and aspirations of our young lie in finding work.

[Mr Brooks Newmark (Braintree) (Con)]

Will the hon. Gentleman at least recognise that youth unemployment in his constituency has come down by 37.8% since the last election?

[Mr McKenzie]

Indeed, and I thank the hon. Gentleman for highlighting that fall. I will tell him exactly how we achieved it. Inverclyde outperforms most areas in Scotland because we punch above our weight. We have done that by pulling together resources from many organisations and put in place an Inverclyde Alliance focused on what matters—employment—with a youth employment action plan at the heart of its work. We are pleased to point to the fact that 94% of our school leavers reach a positive destination, so only a single-figure percentage do not reach one. With additional services, the programme provides an end-to-end employability service that is not just about placing a young person with an employer and hoping for the best; it is about continuous engagement with the employer and the young person. What does the young person need to enhance their skills? What do they need to keep them in employment, or to help them to look for other employment at the end of their term of placement? We ask the business, “Where are you going with your business? Where will you take it to in the next year or so? Can this young person come with you, if they have the required skills, and what skills do you identify that the young person needs to retain the position within your company?”

Of course, in Inverclyde we have continued with the future jobs fund. Obviously, the British Government felt that they did not want to retain the fund across the country, but it works and it has been working for us. In addition, we have made a successful bid to the Scottish Government for additional European funding, allowing 170 additional wage incentive packages that have enabled local companies to recruit even more young people. A total of 52 employers have been engaged, creating a total of 58 posts for our young people during the last year.

This year in Inverclyde, my Labour council allocated substantial additional funding for employability measures for young people. That has resulted in an additional 50 placements with employers across Inverclyde, because Labour in Inverclyde has been focused on what matters—employment, not separation. Our young people believe in having more choices and more chances. I hope you will forgive me, Mr Crausby, for briefly saying that that is why I believe they will vote in September to stay with the UK.

I will also touch on an entrepreneurial programme that we have put in place. The Recruit programme is based upon “The Apprentice”, with young people looking to be hired rather than fired. Many tasks are set up and the young people step up to the mark, proving to many employers that they have the entrepreneurial spark and can be innovative in what they have been tasked to do. However, as I said before, we are never complacent and there are still 72,000 unemployed young people in Scotland, which is unacceptable. We need to get on and reduce that figure.

We desperately need to get our young people into training and apprenticeships. Young people need every chance to improve their skills if they are to get good jobs. Speaking as a former apprentice, I know the value of apprenticeship training. My apprenticeship took four years, but I suspect the period required to learn skills can be reduced in the modern era. However, it should not be reduced to the period or level of work experience, which some people would like to see apprenticeships reduced to. In Inverclyde, we now have around 600 modern apprenticeships, which can offer so much, and there is no reason why apprenticeships should not be expanded to cover a wide variety of jobs and professions. Employment is an essential part of life and without it, especially for our young people, the future will be bleak, because our young people must be our future. We need to plan for jobs and industry, looking to the future business markets and, yes, manufacturing can again prosper across this country. As I said in my maiden speech, everyone has the right to work.

[Mr Brooks Newmark (Braintree) (Con)]

I, too, congratulate my hon. Friend the Member for Norwich North (Chloe Smith) on securing this important debate. I am delighted to follow the hon. Member for Inverclyde (Mr McKenzie). He is right: it is unacceptable that any young person is unemployed. It is the duty of any and every Government to ensure that they do everything possible to get young people back into work. As a father of five children between the ages of 16 and 25, I am well aware, like all parents, of the importance of ensuring that every young person in our society has an opportunity to get a foothold on the employment ladder, so that they can make a contribution to our society. Almost every young person I meet wants a job; they want to work and they do indeed want to make a contribution, and this Government are doing everything possible to help our young people back into work.

I recently ran a successful jobs fair in Braintree, and I thank all the businesses that have been doing what they can to cut youth unemployment and take on a young person from our community. Youth unemployment in Braintree fell from 6.3% in May 2010 to 3.8% in May 2014. That trend has been repeated throughout the country, with youth unemployment falling in almost every constituency, so the Government have done much to combat this problem.

After the last election, the previous Government having left some 1 million young people unemployed, I helped to co-found the Million Jobs campaign. Last year, we drafted a manifesto to tackle the problem of youth unemployment, which set out five steps the Government could take to reduce youth unemployment. They included abolishing national insurance payments by employers of young people; educating school pupils about the apprenticeship opportunities available to them; encouraging firms to invest in young people through employment; removing of barriers preventing employers giving honest constructive feedback to applicants; and, finally, giving every unemployed young person a mentor. In the 2013 autumn statement, the Chancellor adopted the first of our manifesto recommendations by abolishing the jobs tax for any person under the age of 21. At this point, I pay tribute to and thank Lottie Dexter, the director of the Million Jobs campaign, for her tireless effort and leadership.

The Government have introduced a number of other policies over the past four years to tackle youth unemployment. Recently, they implemented the £1 billion Youth Contract, which will create 500,000 new job opportunities for young people by supporting employers and work experience placements financially. Indeed, many of the young people we represent in this House already benefit hugely from the Youth Contract and will continue to in future. Furthermore, the Deputy Prime Minister announced in July 2013 that eight core English cities outside London would be able to bid for a share of £50 million to help young people into work through the Youth Contract.

Apprenticeship schemes have been hugely beneficial in decreasing unemployment of young people, while providing a welcome boost to the national economy. I pay tribute to my Essex colleague, my hon. Friend the Member for Harlow (Robert Halfon), for his sterling efforts promoting the scheme. The Government have taken steps to create a greater number of apprenticeships that are applicable to the current workplace. For example, a £25 million higher apprenticeship fund has been introduced to support up to 10,000 degree-level apprenticeships in sectors such aerospace and renewable energy technologies. Today, there are more than twice the number of apprenticeship schemes available to young people as there were in 2010, enabling more than 1.8 million young people to enter the workplace. In Braintree, I have witnessed this at first hand: the number of my constituents entering an apprenticeship has increased by almost 140% since 2010.

[Richard Graham (Gloucester) (Con)]

I congratulate my hon. Friend on launching the Million Jobs campaign. We have heard great things this morning about apprenticeships—I have an apprentice—jobs fairs and the formal commitment of our hon. Friend the Member for Norwich North, and so on. Does he agree that two ongoing measures will make a difference: the introduction of direct payments to employers, rather than through training colleges, for apprenticeships; and the removal of the loan system for funding apprentices over 24, which will help reduce total unemployment?

[Mr Newmark]

Yes, my hon. Friend makes an important point. The Government are reducing the barriers in order to help young people into work. That is the thrust of the two points he made.

It is important that we continue to promote these new opportunities in schools across the country in order to move towards a more vocational education system. In 2010, a study by the economist Alison Wolf found that 350,000 16 to 19-year-olds were in line to receive unfortunately poorly respected qualifications that had little value in the employment market. Replacing low vocational qualifications with new tech levels that will drive up educational standards is another step the Government are taking to prepare young people for work in the future.

Wage incentives for employers have also been put in place to stimulate demand for working young people. Now, any employer that gives a young person who has been on benefits for six months a job could potentially receive up to £2,275, and the Government have also ensured that payments of £2,200 are available to providers who take on 16 and 17-year-olds who are not in education, employment, training or are from disadvantaged backgrounds. That has provided the long-needed encouragement for employers to begin proactively to seek out the young unemployed and ultimately give them a foot on the employment ladder. The Government have also introduced the new enterprise allowance, which has given young unemployed people with great ideas the opportunity and means to start their own businesses and work their own way out of unemployment. Under the last Labour Government, the number of NEETs increased by a third and youth unemployment overall increased by 40% between May 1997 and May 2010. Thanks to the work of this Government, the total number of 16 to 18-year-old NEETs is the lowest in a decade, while the implementation of a pre-apprenticeship training programme called “traineeship” will ensure even the most vulnerable young people have full access to employment opportunities. That has already positively affected both the voluntary and the community sectors and is particularly aiding young people who are currently not in education, employment or training.

This Government have acted on the calls from the public to reduce youth unemployment by using a variety of policies in combination, and although there is still much to be done, there is clear evidence that the Government are succeeding in addressing the issue of youth unemployment and that their long-term economic plan is delivering for young people, not just in Braintree but up and down the country.

--- Later in debate ---

[Mr Newmark]

The hon. Lady is right that unemployment for young people is down. In her constituency alone, youth unemployment is down by over 40% since the previous election.

[Julie Hilling]

It is interesting that the hon. Gentleman continues to make that sort of intervention whenever a Labour Member is talking about the issues with unemployment. If he listens to what I am about to say, he might learn that I do not believe that the figures are totally true and accurate. As my hon. Friend the Member for Airdrie and Shotts (Pamela Nash) said a short while ago, young people are the group who are sanctioned most, and when they are sanctioned they disappear from the unemployment register. For instance, I have a volunteer working in my office who got so disheartened by sanctions and how he was being treated that he now does not sign on at all because he can no longer cope with the system.

We also have young people on workfare. They are not in employment—they are not getting paid for the work they are doing—but they also disappear from the unemployment figures. The hon. Member for Braintree (Mr Newmark) might be interested to know that in my constituency, any young people signing on for universal credit—that is what is happening for young people in my area now—do not exist in the unemployment figures, because universal credit is not currently connected into those figures. People who want to stand up and say that unemployment is down in my constituency should realise that the figure is not accurate.

I accept that there are more jobs, but one difficulty—I have asked the Secretary of State about this on a number of occasions—is that we do not know the quality of those jobs. We do not know how many involve workfare, zero-hours contracts or unpaid work, and we do not know how many are taken by people who are desperately underemployed and working just a few hours a week when they clearly want full-time jobs.

In the few minutes I have, however, I want to talk about the things we need to do on youth unemployment. One big issue employers and young people talk to me about is the lack of careers education. Where we have cut careers services down to the bare bones, young people do not necessarily get good careers education. The young people I talk to who are in apprenticeships—particularly those working for MBDA, which offers a high-level apprenticeship programme—say they were actively discouraged in their schools from taking up apprenticeships and are not given a full range of information about the jobs on offer. Clearly, therefore, we have a real issue on apprenticeship education.

Work experience should be mandatory. Three out of four employers do not work with young people at all—they do not give them work, work experience or apprenticeships. We need to expand the pool of employers who are prepared to give young people an opportunity. The great value of work experience is that it gives young people a notion of what the workplace is actually like; it encourages them to think about what exams they need to do and what they want to do with their future. Indeed, as a result of work experience, young people sometimes say, “I never want to go into the job I’m doing on work experience.” Work experience therefore often gives young people a rounded view, although I do not think that one or two weeks’ work experience in year 11 is enough; employers should interact much more with education. Some of the best employers in my constituency regularly go into schools and interact with young people; they talk to them about their future and give them a bit of hands-on practice in areas such as engineering.

Another crucial point is support. For 10 years starting in the ’80s, I worked with unemployed young people. We set up a youth co-operative for them, which gave them not only the support they needed, but education and training. Part of that was about young people setting up their own businesses. Not many of those businesses succeeded, but the young people who had attempted to set one up did then find jobs working for somebody else, because they had the experience to do so. Given that 33% of NEETs suffer from depression, we need to see how we can support young people with their education, attitudes and work-readiness. We can build confidence and self-esteem so that they can compete for the jobs that do exist.

I am concerned about the Government’s proposals to introduce fees for the training part of apprenticeships. We are trying to encourage small employers to take on apprentices—that is where the growth in apprenticeships will be—so putting barriers in the way of people taking on apprentices is the wrong thing to do.

I recently held a business event in my constituency. One of the major things employers said was that they wanted apprenticeships to be more responsive to employers, because a one-size-fits-all approach did not really work. They wanted to be much more involved in designing the training that takes place alongside apprenticeships, and to have a say in what happened on apprenticeship programmes for young people.

On the skills agenda, some of the things that have happened in education recently are taking people towards a 1950s and 1960s education agenda. Employers tell me they want young people to do technical subjects. They do not care what the subject is, but they need young people to develop their brains in different ways and to do things more with their hands so that they are ready to take up employment opportunities.

Employers also talk about life skills. They say they need young people to come to them work-ready in many ways. That means young people should have some notion of how the world works, how they fit into the world and how to behave, as well as some notion of financial education and other life skills.

My final point comes back to the issue of connecting employers to education. We need to do far more to enable employers and young people to meet each other and talk about what is going on in the world of work, so that young people can take their place in it.

[Chris Bryant (Rhondda) (Lab)]

It is a delight to debate under your chairmanship, Mr Crausby.

I warmly congratulate the hon. Member for Norwich North (Chloe Smith) on securing the debate and on the way she advanced her arguments: she did not do so in a particularly partisan way, and I do not intend to advance mine in a partisan way either. The issues we all face are significant, and engaging in a battle over statistics does politicians in general no favours—I say that to the hon. Member for Braintree (Mr Newmark). Before he intervenes to say what the unemployment statistics in my constituency are, let me say that I am fully aware of them.

[Mr Newmark]

What are they?

[Chris Bryant]

They have improved dramatically, which is thanks largely to the Welsh Assembly Government and very little to the Government in Westminster—if we are going to get partisan.

There have been some important contributions to the debate. It is an enormous shame that we have lost the Minister who was here at the beginning. I gather he has gone off to Downing street, and we will discover later whether he has been promoted as much as he would like, but I wish him well. I say gently to the Government that it is naughty not only to shift responsibility for answering the debate, which was originally intended for the DWP, to another Department, but then, when we are three quarters of the way through, to hoik the Minister off to get some new employment—taking him out of a debate on those affected by youth unemployment when he does not look old enough to be out of that category. I have not even mentioned the Minister who is about to reply, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson).

[Chris Bryant]

Well, the Minister for Employment is in the Department for Work and Pensions. Be that as it may, let us get on to the matter in hand.

The truth is that the economy is improving and Opposition Members are as delighted about that as Government Members. I say that because many Opposition Members represent seats where what this country has suffered economically over the past few years is felt even more aggressively and painfully than it is in seats represented by Government Members. I know there are pockets of deprivation in every constituency in the land, but the honest truth is that many Opposition Members deal weekly and daily with multiple levels of deprivation, some historical and some new, so we know the pain. We are therefore delighted that the economy is improving, although I sometimes feel quite angry, and I think my constituents do too, when the Government seem complacent about the situation we are in.

The truth of the matter is that we still have the highest ever number of people in part-time employment who would like to be in full-time employment, many of them women. That is a significant challenge, because the issue then is how people in work pay the bills. Under this Government, for the first time ever the problem is that the majority of those living in poverty are people in work. That must be a cause of shame for all of us. Youth unemployment is still stubbornly high. I fully accept that the numbers have fallen, and they have fallen in my constituency. However, they reached an absolute peak last September, and there is still a considerable way to go. I will talk about that a little more later.

I am glad that we have a flexible labour market, but I often worry that the flexibility is all on the part of those who are employed, and that the employer can sometimes exploit that to such a degree that there is unfairness in the market. That means that whether someone is on a zero-hours contract without wanting to be, or is on an exclusive zero-hours contract, or does not have enough hours because the number they are given depends entirely on whether they get on with the boss rather than on a contract, their working conditions will be kept pretty miserable—let alone the problems of low pay.

At the moment some 853,000 young people aged 24 or under are unemployed. Although the figures have fallen, the ratio of young unemployed people to adult unemployed people is considerably higher in this country than for all our competitors. In the UK there are 3.6 young unemployed people for every unemployed adult; in the EU as a whole there are 2.4 and in Germany just 1.6 unemployed young people to every unemployed adult. Many hon. Members cite Spain and Greece, where youth unemployment is high, but we should not underestimate the problem in this country.

As several of my hon. Friends have mentioned—not least my hon. Friends the Members for Inverclyde (Mr McKenzie) and for Airdrie and Shotts (Pamela Nash) who chairs the all-party group on youth unemployment—the recession in the UK has hit the young hardest. All the economic statistics show that they have had a harder time of it than anyone else, and today, although I do not suppose that anyone will notice because the great reshuffle will obscure it all, prices are still rising 2.5 times faster than wages. That has a dramatic effect on people who are on low wages, because they spend a far higher percentage of their wages on the basics of life such as eating and heating. In the past five years, the employment rate has fallen faster among 20-year-olds than any other age group. Real pay has also fallen fastest for the young. We must factor in housing costs and the state of the housing market. They were part of the problem in Spain and Greece: the housing market fell apart, contributing to high youth unemployment. Because of the cost of housing, young people have problems with personal social mobility and moving from parts of the country with no employment to places where there is employment.

We should never forget how those things affect people, including their long-term health. A young person who has been out of work for more than six months is twice as likely as anyone else to be taking antidepressants, and anyone who is out of work for six months or longer is six times more likely to have a mental health problem of some kind, which might make it difficult for them to get back into the labour market. People move further and further from the labour market. One of the most depressing statistics that I saw this year was from the Prince’s Trust Macquarie youth index, which suggested that 750,000 young people in this country said they had nothing to live for.

[Mr Newmark]

rose—