Youth Unemployment Debate
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Chris Ruane
Main Page: Chris Ruane (Labour - Vale of Clwyd)Department Debates - View all Chris Ruane's debates with the Department for Work and Pensions
(13 years, 3 months ago)
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Chris Ruane (Vale of Clwyd) (Lab)
Thank you, Mr Deputy Speaker, for calling me so early in the debate.
In 2002, the unemployment statistics for my county of Denbighshire showed that out of its 34 wards, 50% of the unemployment was in two wards alone—Rhyl West and Rhyl South West. Rhyl South West contained the council estate where I grew up and lived for 26 years. Many of those unemployed people were related to me. Over the past nine years, it has been a personal crusade of mine to do something about that. In 2002, I established an unemployment working group, with people from the college, the Department for Work and Pensions, Jobcentre Plus, the police, economic regeneration bodies and the Welsh Assembly Government getting together around the table to create jobs for people, including young people, in my constituency.
In 2007, the DWP agreed that Rhyl could be one of 15 city strategy pilots for the whole of the UK. Although it is not a city but a town of only 27,000 people, Rhyl was included mainly as a pilot scheme for 52 seaside towns in the UK. Since then, we have made great strides in putting young people back to work in my constituency. The leader of the people who have administered the future jobs fund for the Rhyl city strategy is Ali Thomas, a dedicated professional in getting young people back to work. This is what she said about the Government’s decision to abolish the future jobs fund:
“The subsidy enabled employers to consider taking on long term unemployed people, many with multiple problems. They were able to do this because of the subsidy. The employers were taking a risk with these young people but the subsidy made the risk worthwhile.”
She went on to say:
“It wasn’t a one way street. Employers gained well motivated young workers. Nearly 60% of those that completed the placement scheme went on to gain long term employment with the employer.”
Apart from those 60%, a further 10% to 20% went on into full-time education at the fantastic Rhyl college, built by the Labour Government—the first college we have ever had, and a £10 million investment. A 70% to 80% placement rate in full-time education or full-time employment is not bad by anyone’s standards.
I ask the Minister, who is chatting away down there, what targets he is setting for his new Work scheme: 50%, 60%, 70% or 80%? I hope that he will intervene and tell me. He did not know the figures on the number of apprenticeships or internships but can he tell me his target for full-time employment placements of young people on the schemes that he is going to put in place?
Chris Grayling
The Deputy Speaker does not want extended interventions, so I simply refer the hon. Gentleman to the invitation to tender for the Work programme, which will give him some of the details he wants.
Chris Ruane
The Minister does not know.
From my perspective as a constituency MP, and from that of young people affected in my constituency, the decision to end the future jobs fund is nothing short of political spite. The Work and Pensions Committee report said that the DWP
“should conduct a comprehensive evaluation of the effectiveness of the Future Jobs Fund and publish the results.”
This obviously should have been done before the closure of the FJF. That is common sense, but it was not done.
Chris Ruane
No—I am afraid that I might get my head bitten off.
Why did the coalition Government not take evidence? They could have come to my constituency and consulted Ali Thomas and the young people taking part in these schemes, who were gaining confidence, experience, camaraderie and esprit de corps in their groups of 10 to 15, and feeling pride and joy in being able to plan their first holiday, take their first driving lesson, or gain a certificate from the local college, and in having meaningful work with a meaningful pay packet at the end of the week. I will be sending the Minister, who is still not listening, a DVD made by those young people about their job placements. I hope that he will look at it and get back to me.
When I stared those young people in the eye at the presentations, they were full of pride and joy at their achievements—achievements that will be dashed by the Conservative party. One of the main attractions to the young people in the scheme was that it was a proper job with a proper rate of pay. They could be sacked if they did not turn up or if they were not motivated enough, and they had to be punctual. Their reward was the potential for a job at the end of the six-month placement.
Shorter, cheaper, unsubsidised placements will not have the same take-up or buy-in among young people. Such schemes that were introduced by the Conservatives in the past were pilloried and laughed at by the young people who attended them. YTS was called “young, thick and stupid” by young people. They want no part in such schemes. They want quality schemes like those introduced by the previous Government and abolished by this Government.
The future jobs fund has the respect of the young people who have participated, the employers who have taken them on and the people who have administered it. The main reason given for its abolition was the cost. The Government deemed £6,500 too much to pay to turn around a young life. I ask Government Members who send their children to private schools how much they pay a year to turn their children’s lives around. There is one rule for the rich and another for the poor.
Chris Ruane
I am informed by my hon. Friend that it is £30,000 for Eton. Under the scheme, its cost £6,500 to turn around a young life. But no, that is too much. There are a million young people—and the number is rising—on the dole. What will be the cost if they fall into a life of crime? If that positive path is denied them, they might turn down a negative path. It costs £50,000 a year to keep a person incarcerated. That is money down the drain.
Chris Ruane
No, I would get told off. I am sorry, Mr Deputy Speaker, but I feel that I would.
My local future jobs fund is administered by Rhyl city strategy and is one of the most effective in the country. It had a monthly target to put 320 people back to work. It was bang on every month. It was so effective that it had to hunt for another 100 young people to put back to work, which it got through the WCVA. That effective partnership has been snuffed out by the Conservative party. A key part of the success of the FJF in my constituency was that the funding was delivered to a local partnership. That minimised bureaucracy and red tape, which the Conservative party is always banging on about—there was no red tape or bureaucracy in the FJF in Rhyl. That was welcomed by the employer.
Shorter-term, unsubsidised schemes will not work. They did not work in the past, and they will not work in the future.
Damian Hinds
The hon. Gentleman displays—I shall not go on.
The important thing to ask is whether that £6,500 is better spent on the fund or on something else that will achieve the same result. It is vital to ask that question at any time, but particularly at a time when the Government and the country not only have no money, but have minus money.
There are examples of the future jobs fund working well. We have heard about what has been happening in Birmingham and Merseyside and I am sure there are many other examples, but we have to examine whether it was doing its job properly across the piece. I think there were three main problems with the future jobs fund—the future problem, the jobs problem and the fund problem. For the future, it was not sufficiently focused on people’s personal development; the jobs involved were not the private sector jobs needed to drive the recovery; and its funding was simply not the most cost-effective way of spending money. Those problems are quite apart from the onerous application procedures, which were partly why so many of the jobs were in the public sector.
I welcome the new Government’s Work programme, which will be more flexible, centred on the individual and, because of the payment by results element, will result in better value for money. As the Prime Minister said a few hours ago in Prime Minister’s questions, it has often been asked why we cannot use the money that will be saved in future and spend it on those interventions now. That is exactly what the Work programme does.
The expansion of apprenticeships is very welcome. Many hon. Members have mentioned that so I shall not say any more on it, but I do want to talk about the new enterprise allowance, which seems to be based on the best features of the Prince’s Trust work mentoring scheme, which I know a little about having formerly been a Prince’s Trust business mentor. That fantastic programme gives young people who are starting businesses access not only to finance but to support, mentoring and coaching to help see things through. I am delighted that the Government are taking such a programme forward. I hope that we will also see more development of microfinance through community development financial institutions and credit unions once the relevant legislative reform order is brought through.
Welfare reform is also vital to the whole picture—not just the ambition but the intention and the plan to make sure that work will always pay in future. Programmes are only ever a part of all this, and I am glad that my hon. Friend the Member for Enfield North (Nick de Bois) mentioned that we need to broaden the debate. The most important thing of all for youth unemployment—indeed, any unemployment—is the state of the economy and our ability as a nation to take advantage of opportunities. We need a healthy physical and, just as importantly, human infrastructure.
There are three key elements to any overarching programme, which are interrelated. The first is having a buoyant private sector, the second is ensuring that the incentives are there to hire and invest in home-grown workers and the third is ensuring that we have the right skills and capabilities across the economy to take advantage of key growth markets.
Mr Jones
It is incumbent on the Government to offer not short-term help but long-term sustainable help for young people. It is important for this Government to make sure that we create a culture in which our young people are ready for work, not force them into short-term work to try to prove themselves to employers. Our youngsters must be ready for work.
The evidence tells us that the future jobs fund was twice as expensive as an apprenticeship. In some places, particularly Birmingham, only 3% of jobs were in the private sector and in most instances very few permanent jobs were created. Most young people, however, are looking for permanent jobs. A grandmother who came to my surgery a few weeks ago wanted her grandson to have a sustainable, long-term future.
I would also like to explore the job market and the culture behind it, which is very important. Throughout Government policy, we must promote the idea of getting our young people into employment and it must be a priority across Departments to reduce the barriers that prevent young people from getting work and take down the barriers that prevent employers from taking young people on, because such barriers do exist.
We also need to look at aspiration, which is acknowledged, particularly by head teachers, as a problem in my constituency. On a number of recent visits to schools, I was told that many of their young people have two aspirations: one is to become a footballer and the other is to become a pop star. My lifelong knowledge of my constituency tells me that during my lifetime we have probably bred three or four people who have become professional footballers and made a living from the sport.
Mr Jones
John Curtis, Peter Whittingham, Darren Gradsby, Julian Alsop—there’s four. They have all done well at varying levels at the professional game. I can tell the hon. Member for Vale of Clwyd (Chris Ruane) that I cannot name anyone who has made it as a pop star. That is why I said that we need young people to have reasonable and achievable aspiration at all levels, which does not seem to be the case at the moment. We have to be honest and recognise that people have different abilities and different levels. That is the case in this House and in the country as a whole.
We must ensure that those who can become doctors and those who go into the trades are valued. We must ensure that the work of young people on the checkout or stacking shelves at Tesco is also valued. We must show those young people that they can make it by working from right at the bottom up towards the top. One good example of that is Terry Leahy who went from stacking shelves at Tesco to become its chief executive; he has been very successful in the business world. We need to show young people that it is worth starting at the bottom of the ladder and working their way up, which can often be a fulfilling experience.
We need to ensure that employers have the right culture, particularly for apprentices. As part of national apprenticeship week, I last week visited a fine small business called MES Systems in my constituency. It employs two young apprentices who are doing fantastic work; they are both excellent and well rounded young men. They were hindered, however, because the culture makes it difficult for employers to give our young people the necessary leg-up to get out and do things on their own. This company employed two youngsters, as I say, one of whom was perfectly able to fit and maintain alarm systems under his own steam. Unfortunately, however, he still had to go around with an engineer and could not go out on his own in his van, as the company could not get access to insurance for him because he was too young. That is the sort of barrier that holds companies back. From what the company told me, I have no doubt that it could take on more young people if it had access to that type of facility.
On the Work programme, I welcome the policies put forward by the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling). The integrated package of support will replace an unclear, confused system that lacks accountability. We will reduce the bureaucratic burden of the current system, and make it simpler for young people and employers to understand, increasing the number of young people who get into work. It is important that we do not have a one-size-fits-all policy for such young people. As the hon. Member for Stoke-on-Trent Central and others have mentioned, things are not as they used to be: sons do not follow their fathers down the pit, or into the car factories as used to be the case in Coventry—[Interruption.] The hon. Member for Bassetlaw (John Mann) comments from a sedentary position, but in my area, which was heavily dependent on manufacturing, thousands of jobs at some of the biggest manufacturing names in this country were lost on his Government’s watch, so they do not have such a proud record on that.
I reject the assertion in the motion about the future jobs fund, given the gravity of the problems faced by the Government in tackling youth unemployment. Members must work hard and take responsibility, across the House, to sort out the problem. I hope the Minister will elaborate on how that work will be taken forward.
Maria Miller
I will absolutely get the record straight for the hon. Lady. It is very simple. She may give the House a lot of stats, but I will give one stat back to her: 270,000 more young people on unemployment benefits at the end of Labour’s 13 years in government than at the start. That is the fact that matters.
In contrast—