Youth Unemployment

Lord Grayling Excerpts

Wednesday 9th November 2011 Commons Chamber

[Mr Byrne]

The hon. Gentleman makes an extremely valuable point, which I hope he will develop in the course of the debate.

When this Government were first in office, at a time when the economy was fragile, when the recovery was in its first stages, when they were launching the biggest programme of Government cuts for many years, and when there was a risk of rising unemployment, as was made obvious by the Office for Budget Responsibility, they chose, at huge expense, to take out the key back-to-work programmes that we had in place, which were keeping unemployment down. That will stand as one of the worst judgments made by this Administration.

I know that the Government will in a moment protest that they are taking action. The Secretary of State, who is not here today, reeled off a list of programmes at Question Time last month, when he said that there are

“work clubs, work experience, apprenticeship offers, sector-based work academies, the innovation fund, European social fund support,”—

it is nice to see the Secretary of State supporting Europe on something—

“the skills offer, the access to apprenticeships programme, Work Together, the Work programme, Work Choice, mandatory work activity and Jobcentre Plus.”—[Official Report, 24 October 2011; Vol. 534, c. 4.]

It is not clear how Jobcentre Plus is an innovation of this Government, but none the less it earned a place in his list.

The only problem is that none of these programmes is making a blind bit of difference, so let us take some of the key measures one by one. I want to start with the flagship package of measures launched last May. So important was it, so pregnant with opportunity, so sure was it to make a difference, that the Deputy Prime Minister himself was allowed to put out the press release. Those measures came replete with a total budget of £60 million over three years—a grand total of £20 for every unemployed young person. Or we could look at it as 5p a day to help—

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

rose—

[Mr Byrne]

I shall give way in a moment, because I would like some questions answered.

That is 5p a day to help workless young people. In total, the scheme costs less than the Department spends on stationery—what an insult! Will the Minister tell us how many people the Government have got back into work? Just give us the number.

[Chris Grayling]

Will the right hon. Gentleman clarify that the measures announced in May were for 16 to 18-year-olds? He is misrepresenting the statistics. Will he also acknowledge to the House that his Government provided no support to 16 to 18-year-olds?

[Mr Byrne]

This is the Minister whom the chairman of the UK Statistics Authority once wrote to about his casual use of statistics, so I shall take no lessons from him about statistics traded across the Dispatch Box.

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[Mr Byrne]

No. I could speak about this all afternoon, but I know that many hon. Members want to speak, so let me draw my remarks to a close by outlining what the Opposition believe should be done.

The Opposition believe that the starting point should be a new tax on bank bonuses. That is what this country is crying out for. There are only a few weeks left before the Chancellor’s autumn statement. The Secretary of State is not here but I hope he reads Hansard. Let me give him some advice about what he should negotiate for. He should be putting on the table the five-point plan that my right hon. Friend the shadow Chancellor has set out before the House.

Let us set out what that plan means for young people in this country. Many people in this country deserve a tax cut, but our country’s bankers are not among them. The scale of the imminent bank bonus round is already in the news. I see that there is a bonus pot of £500 million at Royal Bank of Scotland—shareholder: Her Majesty’s Government. Here is a sentiment with which most hon. Members can agree. Lord Oakeshott, the former Liberal Democrat Treasury spokesperson said:

“I don’t want my taxes going to pay for hundreds of RBS investment bankers taking home millions in bonuses as their profits tumble.”

Many hon. Members would agree with that. The Opposition advice is simple: let us have a fair and sensible tax on bankers’ bonuses. That could create a fund of £2 billion, which we believe could help to get 800,000 back to work, including 11,500 jobs here in London; 5,000 in the south-east, the region of the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling); and 8,500 in my home region, the west midlands. That is the kind of action that the Secretary of State should propose.

[Chris Grayling]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will give way in a moment. Let me tell the Minister this: that policy would be popular. Over the summer, I asked my constituents whether the bankers ought to share their blessings a little more generously and whether they should do more to help get young people back to work—97% of them said yes. That policy would be popular, so why is the Minister not proposing it?

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[Chris Grayling]

I wonder whether I could just clarify a point. The Leader of the Opposition has previously announced that the bank bonus tax money will be spent on additional infrastructure, reversing child benefit cuts and paying down debt, and, I believe, seven other commitments. Will the right hon. Gentleman confirm whether those policies have now been dropped?

[Mr Byrne]

If the Minister wants a full breakdown of the costs, I will be happy to provide it for him; and if he wants me to support him in his negotiations with the Chancellor, I will be right by his side.

With that policy should come an acceleration of investment in capital infrastructure, as the CBI calls for today; a temporary cut in VAT to help families up and down the country; a one-year cut in VAT on home improvements; and a tax break for small firms that take on extra workers, especially young people, as proposed by the Federation of Small Businesses.

The whole country knows that this Government are failing our young people. This year, our country has seen one of the fastest ever increases in long-term youth unemployment. When the TUC, the CBI, the Prince’s Trust and the Work Foundation are telling the Government to change course, surely it is time for them to act. Before the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts), was encumbered with the cares of office, he wrote a book about the baby boomers. In the introduction, he writes that

“the charge is that the boomers have been guilty of a monumental failure to protect the interests of future generations”.

The Secretary of State for Work and Pensions, who is not here today, is—believe me—a baby boomer. If he does not change course, and fast, he will stand before the House guilty as charged.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I regard youth unemployment as one of the most difficult parts of the legacy left to us by the previous Labour Government. In 2010, at the time of the general election, 930,000 young people in this country were unemployed. When Labour left office, there were more young people not in education or employment than when it took office in 1997. Labour also left behind one of the most difficult sets of economic circumstances that any incoming Government have ever faced. Indeed, we do not need to use our own words to describe that; we remember clearly the words of the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who left a note behind saying, “There’s no money left.”

[Mr Byrne]

Will the Minister just remind the House what level youth unemployment stands at today? Will he confirm that it is the highest figure on record?

[Chris Grayling]

Actually, youth unemployment—genuine youth unemployment—is not at the highest level on record. When we exclude from the figures full-time students looking for part-time jobs, the level of youth unemployment today is not the highest on record. However, I regard any level of youth unemployment as unacceptable, and something that we should work to try to solve.

[Karl Turner (Kingston upon Hull East) (Lab)]

In researching for this debate, I found an Office for National Statistics summary of labour market statistics. In one of the columns dealing with youth unemployment figures, under the heading “Last time higher”, I found, in bold writing, the word “Never”. That figure has never been higher.

[Chris Grayling]

When we exclude full-time students in colleges of higher and further education, the level of youth unemployment today is not the highest on record. I reiterate, however, that I regard any level of youth unemployment as unacceptable. It is a challenge and a priority for the Government. We have to remember that the problem goes back a decade. Youth unemployment started to rise in 2003-04, and it has been rising steadily since. Even in good years, the previous Government’s policies failed to deliver solutions. Eighteen months ago, we inherited a series of failed programmes that had failed to deliver real solutions for young people, and we are trying to turn that round.

[Robert Halfon]

Does my right hon. Friend agree that part of the problem has been the failure of our primary schools over the past decade? Under the last Government, 500,000 children left primary school unable to read or write. Is that not part of the reason that we have a skills problem today?

[Chris Grayling]

My hon. Friend has highlighted one of the many challenges that the previous Government left behind for us. There was a total failure to equip young people for the workplace and for a working life, a failure in our education system and many other failures, not least of which was the disastrous economic inheritance. When the Labour Government left office, they were borrowing £1 in every £4 that they spent. Our first priority remains sorting out the challenges in our public finances. Does anyone seriously believe that, if we were in the same position as some other European countries in failing to deal with our deficit, business would want to invest in this country rather than cutting jobs and moving elsewhere? It is my clear view that, had we not taken action to deal with the deficit, unemployment would be higher than it is now, rather than lower.

[Mr Byrne]

Can the right hon. Gentleman just remind the House by how much the Government have had to revise upwards their borrowing forecast over the past few months?

[Chris Grayling]

The right hon. Gentleman talked about international challenges, but let me remind him that, three months ago, youth unemployment was falling and was below its level at the time of the election. He should also remember that we are now in the middle of the biggest financial crisis in the eurozone in decades, perhaps in modern times, and that our labour market is not immune to that. However, we are now turning round the set of failed programmes that existed under the previous Government and putting in place measures that will make a difference to the long-term unemployed.

[Mark Simmonds (Boston and Skegness) (Con)]

Will my right hon. Friend confirm that containing, controlling and reducing the structural deficit is a prerequisite for economic growth and job creation?

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[Chris Grayling]

It is my view that had we not taken those steps, interest rates would be higher, investment would be lower and unemployment would be higher than it is today. I know it is a point of difference between the two sides of the House, but Labour’s alternative strategy would simply involve Britain borrowing more money. I do not understand how it is possible to solve a crisis created by too much borrowing by borrowing even more.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I welcome the Minister’s acknowledgement that youth unemployment is to a large extent symptomatic of the fragility of the wider economy, but will he also acknowledge that the Government’s approach to the wider economy is not working and is actually exacerbating youth unemployment?

[Chris Grayling]

I do not accept that. I shall briefly set out some of the measures we are taking on the broader economic front that will make a difference to unemployment.

The regional growth fund is now delivering investment to parts of the economy where the private sector is too small, and where we want to see private sector growth, and the research and development and investment in infrastructure that creates jobs. The introduction of enterprise zones in parts of the country where the private sector is weak will encourage businesses to grow and develop. The cut in corporation tax will deliver the lowest headline rate in the developed world. Those are examples of measures that will help to make Britain a better place to do business.

[Heidi Alexander (Lewisham East) (Lab)]

The Minister talks about the regional growth fund and enterprise zones, but those words will mean little to young people in my constituency who have seen long-term youth unemployment rise by 192% over the past nine months. Can he tell me in plain English what he will do for those young people in Lewisham?

[Chris Grayling]

I can indeed, and I shall carefully go through the different measures we have taken to tackle the youth unemployment problem. It is also important to note that we are targeting investment and support on parts of the economy where we want private sector growth so that jobs can develop.

It is worth remembering that the previous Government fiddled the figures on youth unemployment; they claimed to have abolished it. When people moved on to the new deal, they had a period of work experience and were transferred to a training allowance, at which point they no longer showed up in the figures. By that mechanism people who remained out of work for long periods temporarily disappeared from the figures, so long-term youth unemployment was, according to the previous Government, “abolished.” That was absolute nonsense.

[Mr Sheerman]

I have known the right hon. Gentleman for a long time, and he is a reasonable man. People outside this place want a positive initiative, to which we can bind other parties. They want an adventurous and innovative scheme to give young people the chance to get off the dole and into training and work. That is what we are waiting to hear. If the Minister comes up with a scheme like that tonight, we shall support him.

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[Chris Grayling]

I shall be delighted to talk about some of the specific measures we are taking, but before I do that, let me address the issue about the future jobs fund. It had two key flaws. The first was that it was entirely in the public and voluntary sectors; it did not take young people into the private sector, where there has been employment growth over the last 12 months. That was a fundamental flaw. The other one, in a world where, as the right hon. Member for Birmingham, Hodge Hill said, there was no money left, was that the FJF was by far the most expensive scheme; it was four times as expensive per job outcome as the new deal for young people, and massively more expensive than previous schemes. We have developed a better package of support; it will be more effective and more cost-effective. Through the various schemes that I am about to explain, I estimate that we shall provide support for about 350,000 young unemployed people over the next two years, to make sure that nobody is left without the help they need to try to get themselves into work.

[Mr Iain McKenzie (Inverclyde) (Lab)]

The Minister has referred to a number of issues about the future jobs fund. In Inverclyde, when I was council leader we were the second most effective constituency in using the fund, putting some 400 of our young people into employment, mostly in private sector jobs. In Inverclyde, we are putting our money where our mouth is; on our own backs, we are continuing the future jobs fund for a further year, with the target of putting 500 young people into jobs. The future jobs fund worked, and it is still working.

[Chris Grayling]

As the hon. Gentleman knows, this Administration believe in localism, and a local authority is free to do what it wants to support the unemployed. I welcome any local partnerships to deliver that. I would still say, however, that the reality is that the future jobs fund cost massively more than comparable schemes, and we believe that the package we put in place is more cost-effective and likely to deliver better success rates.

[Mr Byrne]

rose—

[Chris Grayling]

I shall give way once more to the shadow Minister, but then I am going to make some progress in explaining what we are doing.

[Mr Byrne]

If the right hon. Gentleman believes the future jobs fund was too expensive, is he by implication saying that he is prepared to see youth unemployment go up, because that is what has happened since the election, after which he abolished the programmes? Is he saying that youth unemployment is basically a price worth paying?

[Chris Grayling]

One reason this country is in its financial predicament is that the previous Government did not understand value for money. They believed in throwing money at a problem, not trying to do the most cost-effective thing. That is one reason for the right hon. Gentleman leaving that note behind, saying, “No money left”.

[Neil Carmichael (Stroud) (Con)]

One of the key things I believe is important is rebalancing the economy towards manufacturing and engineering, which focuses, of course, on the private sector to make sure that it provides jobs. I see evidence of that happening in my constituency. Does the Minister agree that that kind of initiative is critical to ensuring that we deal with youth unemployment?

[Chris Grayling]

I absolutely agree with my hon. Friend. One of the failures of the previous Government arises when we talk to engineering firms that want to recruit young engineers and cannot find them. I think that the previous Government 's skills strategy was fundamentally misplaced. That is why the work being done by the Minister for Further Education, Skills and Lifelong Learning, who is in his place beside me, is so important.

[Robert Halfon]

Talking about the future jobs fund, although it created 90,000 jobs, almost half of the people involved were back on the dole seven months later.

[Chris Grayling]

What the future jobs fund did not do for many young people was provide a clear pathway into long-term employment. As to apprenticeships—my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, too, will talk about them later—we believe that they are a better strategy.

There are three elements to the work we are doing for our young unemployed people. The first is helping those who have been unemployed for a shorter period of time to overcome that classic challenge—“If you haven’t got the experience, you can’t get a job, but you can’t get the experience unless you have got a job.” What we have done is launch our work experience scheme and its sister scheme alongside it—sector-based work academies. We launched those in the spring. Figures published this morning show that more than 50% of the young people who go through the work experience scheme are off benefits within a month of it finishing—at a cost that is a tiny fraction of the amounts spent on previous programmes.

Employers and Jobcentre Plus are working together around the country in a way that is hugely positive to deliver real opportunities for young people to get their first steps in the workplace—and it is making a real difference. I am confident that as we come forward and expand the sector-based work academies with a mix of training and work experience, we will see a similar result. That is a very good start for the scheme.

[Richard Harrington (Watford) (Con)]

Will my right hon. Friend inform me why the shadow Minister, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) should be laughing at such a scheme, when I have seen it working in my constituency? I would say that substantially more than 50% of people involved with it have got into real jobs.

[Chris Grayling]

My hon. Friend is right; I am baffled as well. This is working far better than we expected and provides a significant piece of evidence to show that if we can get a young person into the workplace quickly to get them their initial experience, it can make a real difference. I am proud of what that scheme has achieved, and I would like to pay tribute to members of the Jobcentre Plus team up and down the country who are working with employers to find those work experience opportunities.

I had occasion a couple of weeks ago to meet a group of young people who are actively looking to try to get work experience opportunities because they believe it is a real route for young people to get into employment. We are now working with that campaign to make sure we help all the young people involved to get work experience opportunities. We are, as I say, a Department providing work experience opportunities to a large number of young people, and I believe this is an important ingredient of the support we provide to those who have just entered the labour market, who are trying to get into work after a short period out of work, to make a difference for that group.

[Mr Graham Stuart]

Does my right hon. Friend agree that a generation of young people were betrayed by vocational qualifications that were inappropriate, as the Wolf report indicated earlier this year? It is ironic to see the shadow Chancellor of the Exchequer among the Front-Bench team, because when he came before the Select Committee, which used to be chaired by the hon. Member for Huddersfield (Mr Sheerman), he refused to listen when he was told again and again that the diploma was going to be a hugely expensive mistake. He refused to listen, spent millions of pounds of public money and let down young people with a diploma programme that was not fit for purpose.

[Chris Grayling]

My hon. Friend has made a good point. To be honest, I do not know why any of us listens to this lot. They were a disaster in Government, and the country is well rid of them. What we are trying to do now is repair the damage caused by 13 years of mismanagement.

[Dr William McCrea (South Antrim) (DUP)]

Will the Minister give way?

[Chris Grayling]

I want to make a bit progress first.

Let me now deal with the second element of our strategy: how we will deal with long-term youth unemployment, a problem that has become much more acute now that we have stopped massaging the figures and hiding the real picture. I believe that the Work programme will make a real difference to those young people. It has been up and running for four months—

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Minister give way?

[Chris Grayling]

I think that the programme is doing good work. I have visited providers throughout the country—

[Sheila Gilmore]

Will the Minister give way?

[Chris Grayling]

I extend an invitation to Members on both sides of the House to visit their local Work programme providers. They can contact my office if necessary to arrange the introduction. I think that they will be impressed by the work that is being done.

[Sheila Gilmore]

Will the Minister give way?

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[Chris Grayling]

We will publish details of what is happening in due course, but I can tell the House now that more people have been referred to the Work programme than we originally projected, that it is growing fast, and that a large number of providers are having a great deal of success in getting people into work.

[Sheila Gilmore]

Will the Minister give way?

[Chris Grayling]

I pay tribute to one of our providers, EOS in the west midlands, which has just achieved its 1,000th job placement. I congratulate all its staff on their success—

[Mr Byrne]

rose—

[Chris Grayling]

I hope that the right hon. Gentleman will visit them.

[Mr Byrne]

I should love to do so, and when I do I shall ask EOS for its performance statistics, because I understand that the Minister has banned their publication. If he is so confident about the performance of the Work programme, he should tell the House what it is delivering.

[Chris Grayling]

The right hon. Gentleman is, classically, trying to have it both ways. On one hand he tells me off about national statistics, and on the other he tells me off for not obeying the rules on national statistics. What does he want? These are national statistics, and they will be published in line with national statistics rules. He will just have to wait.

What I will say now is that so far I am encouraged by the progress that is being made. All of us—Members in all parts of the House—need the Work programme to work and to make a difference for the long-term unemployed, and I am confident that it will do that. For the first time we are giving the providers genuine professional freedom to do what works for our young people, and I believe that if we trust the professionals and do not tell them what to do, as the last Government did, we are much more likely to be successful.

[Neil Carmichael]

I thank my right hon. Friend for giving way a second time. This time I want to emphasise the importance of a proper interface between the education and business sectors, providing experienced, professional contact, so that people understand that they are receiving the kind of education that will lead them into jobs.

[Chris Grayling]

Absolutely. The Department for Education is working hard to remedy the failings of our schools system in partnership with my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, who is working with the FE sector to try to deliver a much better quality of vocational education. That, along with the partnership that now exists between my Department and the Department for Business, Innovation and Skills, will ensure that the unemployed are presented with a genuinely joined-up offer of an opportunity to obtain the skills that they need, and it represents a real step change from what we saw in the past.

The third element of the support—

[Sheila Gilmore]

Will the Minister give way?

[Chris Grayling]

I will.

[Sheila Gilmore]

I am obliged to the Minister for finally noticing me.

Is it not the Minister himself who is trying to have the question of the Work programme both ways? He does not want to publish figures on a national basis, but when he chooses, he will use figures plucked from we know not where to prove that the programme is working. Can he explain exactly how a work programme ever creates any jobs?

[Chris Grayling]

The point of the Work programme is very straightforward. We have a team of organisations throughout the country helping people to get into work. We pay them if they succeed. Fortunately, they seem to be making a good start. In due course, when I can do so, under national statistics rules, I will publish information for the benefit of the whole House. I want to expose to the whole market who is doing well and who is doing less well, so that there is competitive pressure on organisations to become the lead provider. I will publish those figures as soon as I can according to national statistics rules, and as soon as the programme has been going long enough for them to be reliable.

The third point—

[Sarah Newton (Truro and Falmouth) (Con)]

Will my right hon. Friend give way?

[Chris Grayling]

I will give way once more, and then I must make some progress and wind up my speech.

[Sarah Newton]

I am grateful to my right hon. Friend, who has been very generous in giving way. Does he agree that this is all about local partnerships? Organisations such as Cornwall Works will help the 105 young people in my constituency who have been unemployed for more than six months to get back to work. Those young people will benefit from the new apprenticeships created in my constituency in the last year—more than 660. Local partnerships enable such people to find real jobs with real employers.

[Chris Grayling]

Local partnerships are immensely important, and now the Work programme providers have complete freedom to forge partnerships that will make a genuine difference.

The third element of our strategy is apprenticeships. Over the past 12 months, we have launched 100,000 new apprenticeships. I believe that more apprenticeships are now available in this country than ever before. We have many apprenticeships that are targeted at young people. The previous Government’s track record on apprenticeships was, as usual, full of rhetoric but lacking in delivery. They repeatedly made promises for an overall number of apprenticeships, and they repeatedly failed to deliver what they promised. We are hitting targets for apprenticeships. That is the first time in a long time that that has happened, and I pay tribute to my hon. Friend the Minister for Further Education, Skills and Lifelong Learning for that.

[Ian Austin (Dudley North) (Lab)]

How many of these apprenticeships are reserved for 18 to 24-year-olds?

[Chris Grayling]

In the Budget, we announced an additional 40,000 apprenticeships targeted at the young unemployed, and the overall number of young people under the age of 24 on apprenticeships is greater than the total number of apprenticeships that were available under the previous Government. My hon. Friend will walk us through the details of that when he concludes the debate; this is very much his baby, and he should take credit for what he has achieved.

I might also mention the support we are providing for the short-term young unemployed through the work experience scheme, our sector-based work academies and the work being done through Jobcentre Plus. The Work programme is the biggest ever welfare-to-work programme of its kind in the country. We have the biggest payment-by-results scheme in the world, offering tailored, personalised support to help young people actually get into work right now. There is the opportunity to move through into an apprenticeship, which is an appropriate path into work for many young people. Never before has this scale of apprenticeships been provided in this country.

I believe these measures represent a coherent strategy to deal with a problem that was left behind by the previous Government, and that has been made more challenging by a difficult set of international circumstances. Unlike the previous Government with their failures, we are determined to tackle this problem, and to succeed.

[Several hon. Members]

rose—