Youth Employment

Chloe Smith Excerpts

Tuesday 15th July 2014 Westminster Hall

[Chloe Smith (Norwich North) (Con)]

It is a pleasure to serve under your chairmanship, Mr Crausby. Along with my hon. Friends the Members for Braintree (Mr Newmark) and for Redcar (Ian Swales) and the hon. Member for Airdrie and Shotts (Pamela Nash), and with the support of others, I asked the Backbench Business Committee to support a debate on youth employment. I am grateful to the Committee for its support.

The subject of this debate is not unemployment but employment. We want this debate to be a positive one. We would like to promote what we can do in our constituencies to help get young people into work. Many hon. Members run jobs fairs, information campaigns, apprenticeship drives, work experience programmes and much more in their constituencies. This debate is an opportunity to celebrate the success of those programmes and share the ideas behind them so that hon. Members can perhaps return to their constituencies during the summer recess with the opportunity to do more to help local young people. I am grateful to the Million Jobs campaign, which has supported this debate, and I know that my hon. Friend the Member for Braintree will speak more about it.

First, I will briefly set out the national picture, and then I will share an example of my own. We will have the latest monthly employment figures tomorrow, but as of today, employment is at 30.5 million, which is up 345,000 on the quarter and represents a huge rise in the number of jobs created in the private sector. The net rise in employment over four years is 1.69 million. Unemployment is at 2.6 million, which is down on the quarter and over a four-year period. Long-term unemployment is down 108,000 on the year.

Youth unemployment is also down. Some 3.4 million 18 to 24-year-olds were in employment in the last three months, an increase on the previous year. In the same period, 677,000 people aged 18 to 24 were unemployed, a fall of 11.5% from the previous year. Of course, those studying are included in the figure covering unemployment, so not all of those 677,000 are necessarily seeking a job. Expressed as a percentage, our national unemployment rate is currently 16.5%.

[Chris White (Warwick and Leamington) (Con)]

I congratulate my hon. Friend on securing this debate. I would not have intervened so early, but as she is mentioning figures and good news, I wonder whether she has noted that in Warwick and Leamington, youth unemployment has fallen by 67% since April 2010? That is obviously good news, but we need to do more. Does she agree that we should do whatever we can to encourage businesses to work more closely with our schools and colleges in terms of mentoring, work experience and careers advice to help give our young people an even better start in finding a job?

[Chloe Smith]

I certainly agree with my hon. Friend on that point. He has helpfully set up the point about co-operation that I wish to emphasise in this debate.

Our national youth unemployment rate has hovered under 20% for much of the last four years; if we look across Europe, we see that our young people are significantly better off than, for example, those in Spain, where about half of young people cannot find work. They are also better off than those in Uganda, where I have just had the privilege of meeting young leaders from nine countries through the Democrat Union of Africa. I learned there that youth unemployment in Uganda is the highest in Africa; the African Development Bank says that it could be as high as 83%. Uganda also has the world’s largest percentage of young people under 30, at 78% of the entire population.

Youth unemployment is a blight for any nation, but most of all it is a blight on every young person who has a hope, a dream and something to offer. Those are not numbers; they are real people. It is a sapping experience to seek work and not get it. Unemployment is a crying shame for those who want to put education to good use and an appalling burden for those who want to work hard and get on without falling back on benefits.

[Guy Opperman (Hexham) (Con)]

I was one of the first MPs to hire, train and retain an apprentice. Does my hon. Friend agree that that is a good way we can make an individual difference? Does she also agree that the statistics show that, for example, every single one of the 29 constituencies in the north-east shows an increase in the number of apprenticeship starts compared with the year 2010? The minimum rise is 60%; the maximum, in Bishop Auckland, is 143%.

[Chloe Smith]

I welcome those figures. My hon. Friend does well to point out how important apprenticeships are, and I congratulate him on offering one to a young person.

National policy, which the Minister will set out in more detail, ranges across the radical expansion of apprenticeships to the package of measures under the Youth Contract, which include incentives for employers to take on young people. Many organisations in the third sector also contribute enormously to encouraging young people throughout the country, some by means of formal contracts with the state. Campaign groups such as The Found Generation add to that. The Found Generation is youth-led and aims to tackle Britain’s youth unemployment and prevent a lost generation. It has recently published a report entitled “Practical Solutions to UK Youth Unemployment”, which I commend to hon. Members.

I will also mention briefly a couple of commissions with which I am involved. I chair the National Youth Agency’s commission into youth and enterprise, which is currently researching and surveying how we can all back young people to start out on their own.

[Mr Robin Walker (Worcester) (Con)]

I am grateful to my hon. Friend for securing this important debate. On youth enterprise, does she agree that schemes such as Young Enterprise have inspired many students over the years? However, it is vital to get entrepreneurs into schools. The entrepreneur Neil Westwood, who founded Magic Whiteboard and got funding from “Dragons’ Den”, goes into local schools in Worcester to give talks and inspire young people about what they can achieve by setting out on their own. Does she agree that that is a good model for others to consider?

[Chloe Smith]

I certainly do. It is incredibly important to have good role models available for young people. After all, by 2018 there will be more entrepreneurs in our labour market than public sector workers. Self-employment, entrepreneurship and micro-business are an exciting tectonic shift in our economy, and I am confident, from what I have seen with my own eyes, that young people will be at its heart.

I also contributed, as a commissioner, to the Industry and Parliament Trust’s recent report on youth skills. Local and regional policy is beginning to emerge through local enterprise partnerships. I particularly commend the detailed work done on skills by my LEP, New Anglia.

Policy is one thing, but local success does not rely on policy. It needs good leadership and a will to succeed, and it needs business, the community and parliamentarians to work together to help young people. I offer the example of Norwich for Jobs, a project that I founded. We set out in January 2015 to halve our city’s youth unemployment in two years. That meant reducing the rate of jobseeker’s allowance claimants from 2,000 down to 1,000. I am delighted to report that we have virtually achieved that, early. We expect new figures tomorrow to show that the youth unemployment rate in our city has dipped under 1,000. We have done it by asking businesses in our city to pledge to take on a young person. They sign a formal pledge and commit to a number of opportunities that they can provide over the months to come. We then connect young people with those opportunities through the jobcentre.

Essentially, we have focused the city community on a common goal. We have tried to provide a common platform for the many organisations that help young people in Norwich, and sought to work together to share intelligence and get young people into work with the employers who are making that commitment. In order to do that, I brought together a steering group, to which I pay tribute. It included Jobcentre Plus, City College Norwich, Norfolk chamber of commerce, the regional media group Archant—it runs information about the campaign in the Norwich Evening News and the Eastern Daily Press—and scores of employers, led by Howes Percival, a local law firm. The employers that have signed up range from tiny firms such as our one-man-band plumber, who is now a two-person band with an apprentice who does his books and social media, to large local firms such as the independent Norwich retailer Jarrold, which took on the 1,000th young person in our scheme.

National and international chains have got involved too, including Marks and Spencer and KLM Engineering. In all cases, we are seeking additionality, to use the technical term—the extra jobs or opportunities that those firms could pledge on top of their existing programmes. All those firms know the benefit of taking on a young person. They are securing the future of their business and helping the community at the same time.

We count against the Office for National Statistics figures every month, using a measure of the young people attending Norwich jobcentre. That allows us to cover the travel-to-work area. We track the paid opportunities that are offered—jobs and apprenticeships—but we also encourage the soft opportunities such as work experience and mentoring. So far, there has been a commitment to provide 1,098 jobs and apprenticeships, with 1,032 young people going into paid work as a result. I stress that we believe in good faith that this activity is all additional, because we are counting against the opportunities offered. We also know that the total Norwich register has dropped and we review on-flow and off-flow every month.

We have had the benefit of a superb employers’ panel, as well as a young people’s panel, to advise us, and we will work closely in the months ahead with our partners’ panel, which is made up of all the organisations that are often more specialist in terms of getting harder-to-help young people into work. We have enjoyed praise from His Royal Highness Prince Edward, the Prime Minister, the Chancellor, Ministers and the Bishop of Norwich. We know that we have achieved a good thing but we are not complacent because there is so much more to do.

I will sum up my contribution, to allow other hon. Members to contribute. Youth unemployment is one of the most important social and economic issues of our time, and we can do things about it locally. This process is about the many individuals who are looking for the job they ardently need in order to secure that all-important first chance to take home a pay packet and to gain experience. Their families, their communities, local businesses and parliamentarians can step up to help. Although we want this debate to touch on education, welfare and enterprise policies, we hope that it will focus on constituency best practice, including pop-up job shops, social networks and local campaigns. We hope that hon. Members will share the good work being done in their locality and learn from others, so that each hon. Member leaves with a set of actions for the summer recess when the latest school, college and university leavers look for their own place in the world of which they can be proud.

--- Later in debate ---

[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).

[Chloe Smith]

On that point, I will spare the Minister’s blushes by saying that we all think young people should be in Government positions. However, I should also note that Backbench Business Committee officials asked me which Ministry I would prefer to respond to the debate, and I said it would be helpful for a Minister from the Department for Business, Innovation and Skills to reply, because the debate is about employment, not unemployment.

[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.