Youth Employment

Ian Swales Excerpts

Tuesday 15th July 2014 Westminster Hall

[Ian Swales (Redcar) (LD)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate the hon. Member for Norwich North (Chloe Smith) on securing the debate from the Backbench Business Committee. I commend the previous speaker, the hon. Member for Airdrie and Shotts (Pamela Nash), for not only her speech, but her work on behalf of the all-party group.

Underemployment of young people is a scourge; it is clearly bad for the individuals, but it is also bad for the country in many ways. Social disaffection is bound to occur when large numbers of people are under- employed; we see that in countries such as Spain, where unemployment rates for young people have reached figures like 50%.

Is it surprising that people feel socially disaffected when society seems not to want them? In areas such as mine, that feeling can start even before being underemployed, because a person’s prospects can look poor from a much younger age, which affects how they approach education. We have to sort that out for many reasons, one of which is the economic capacity of the country, as the hon. Member for Airdrie and Shotts said. That is an issue in my area. When I was elected, 1,135 people aged 18 to 24 were unemployed; others were kept out of the numbers in various ways, so the real figure was huge. I am pleased to say that that the youth unemployment figure has been reducing quickly; it has gone down by 36% in the past 12 months. I checked the figures, and only about 30 constituencies in the country have seen a bigger fall in the past year. That is because the Government are doing a lot to help the north-east. The local enterprise partnership in particular is focusing on bringing jobs to the area, and on helping young people.

Many schemes are going on, but I commend the Government on what they have done about work experience. When I was campaigning in 2010, I met a young man who was caught in a classic Catch-22: he had been offered work experience at the nearby chemicals site through a contact, but he was unable to take it, because he could not afford to lose the benefits. I am pleased that the Government have freed the system up so that young people may take work experience when it is offered to them and not be caught in a bind.

The Youth Contract is having success. I visited my local provider, Pertemps, to discuss how it was getting on with the Youth Contract. To my surprise, I found that lack of opportunities was not its biggest problem; transport for young people was the biggest problem. The Government need to look a lot harder at how young people can get to the opportunities that might be available. If for work experience we are offering people low amounts of money, or sometimes no money, how do we expect them to get to the workplace if they come from homes with insufficient funds? That needs to be looked at.

The Government have had massive success with apprenticeships. I have an apprentice, Jordan Brimble, an outstanding young lady who is developing quickly in my office. She is an apprentice business administration person, not an apprentice MP—not yet, but one day perhaps. Apprenticeships have doubled in number in my constituency. Since I was elected, more than 5,000 people have started an apprenticeship contract in my constituency.

Another reason for the fall in youth unemployment is the fall in overall unemployment. In the Tees valley we have seen a fall of more than 7,000 people in the past 12 months—in seven constituencies alone. A lot is going on, including a lot of improvement, but we have issues, one of which might be described as employability. Any employer will say that there is a problem with hard skills—particularly in science and technology, but also in other areas—as well as soft skills. I talked to my local council about its scheme for taking on young people, and it has to train some of those young people even in the very soft skills of getting out of bed in the morning, getting to work on time or understanding that they have to do what their boss tells them to do. That prompts the question: what on earth has been going on in their previous 15 years plus of education? It is important to ask employers what they see—not that we should educate people simply to be employed, but it ought to be very much a part of the equation.

We also need to get young people interested in the right things. I was at an apprenticeships event just last week and heard a story about Aston Martin. It had presented a fantastic display to young people about its products and the cars it makes—a very exciting world of fast cars and engineering. There were 200 young people in the room, and at the end of the presentation they were asked, “How many people want to come and work for Aston Martin?” Nobody put their hand up. Aston Martin’s management, unsurprisingly, is saying, “How can we operate in the UK if nobody wants to come and work for us?” That goes back to the question of what skills we are teaching people and what we are getting people interested in from an early age.

I have my own story. Two weeks ago, I was living the dream as an MP when I got to open a new crematorium. I have a stone memorial on the side of a crematorium now, long before I am dead. The people at the crematorium told me that there are four jobs there, and they had 500 applications for those jobs. That afternoon, I went to a company that has just won the Queen’s award for exports. It makes some really innovative measuring products, cameras and other things that can be used for gas and oil measurements on oil rigs. It is making a fortune and yet cannot find enough people to assemble the cameras and work in its small factory. Five hundred people want to work in a crematorium but no one wants to assemble hi-tech equipment for oil rigs. I do wonder what our system is producing. Are we telling young people the right story about what the future holds?

I go around all the employers in my area trying to encourage them to take on young people and train them. I do that for their own future; it is a hard-nosed economic decision. Sometimes we see employers on TV saying, “My growth is limited because I can’t get skilled people.” My answer to that is always, “What are you doing about it, then? There is an economic case for you to do something about it.” It is a sad fact that only 10% of employers today take on apprentices.

I pay tribute to George Ritchie of Sembcorp in my constituency for driving the Tees Valley apprenticeship programme. That programme sits above employers, in recognition of the fact that because there was such a decline in heavy industry a lot of employers had effectively stopped training. Now, however, there is a lot of growth and inward investment, and the programme looks to see who will train the thousands of young people required for the new opportunities that are coming, and replace the thousands of people who will be retiring from those industries in the next 10 years. The Tees Valley apprenticeship programme has been having success in that, and has been backed by the Government, for which I thank the Minister and the Government.

What more should the Government do? As a Liberal Democrat I did not think I would ever use the word “Stalinist” in a speech in Parliament, but I think we have to get a bit more Stalinist about the skills that we teach young people. The market in education is simply not producing skilled people in the proportions that the country needs. For example, I understand that Darlington college trains 100 hairdressers a year. I do not know a lot about Darlington, but does it really need 100 hairdressers a year? Meanwhile lots of businesses in the local area simply cannot find the skilled people they need. The Government should keep on finding ways to steer the market—let us put it that way—to educate people and educators to produce what the country needs in the future.

There are lots of stories of that kind. Aerospace companies are affected; my hon. Friend the Member for Burnley (Gordon Birtwistle) has talked about how a company in his constituency had to turn away work for 300 people for 15 years because it got only four applications for the 300 jobs. Again, that is a massive skills problem.

The Government should be much more rigorous about why we need immigration to this country. This is not about being anti-immigration, but about making sure that people born and brought up in this country are ready for the jobs on offer. We need an inventory of the skills that we are lacking that mean we need immigration for various jobs. My particular hobby-horse when it comes to this issue is the NHS. We all know the NHS would fall over without immigration, but what has it been doing about training people over the past 20 years or so? Redcar and Cleveland college in my constituency used to have a course called “pre-nursing”, which led on to nursing, but the local NHS stopped training nurses, so the course now has to be called “introduction to nursing”, because the NHS finds it far cheaper to import nurses from the Philippines, South Africa and various other places. We need to address that scandal and expose how much of that is going on—how many people come to this country simply because we have not trained our own people properly?

We need to encourage employers to take on trainees. In certain sectors—the oil and gas sectors spring to mind—employers seem pathologically not to want to train their workers and simply go out and poach each other’s workers; that is why pay levels are so high. In those sectors, we may need to bring back training boards. A few still exist, but training levies have largely gone. However, if we cannot get industries and sectors to invest sufficiently in their own training we may need to force them to do so.

Finally, we should continue to spend Government money in this area and make full use of the European money that is available for skills, particularly in places such as the Tees valley, which are classed as intermediate areas. Those areas have a lot of European social fund money directed towards young people in particular.

Speaking for my own area, there has been a lot of progress and a lot of good things are going on, but there are still 705 young people aged 18 to 24 claiming jobseeker’s allowance, and that is 705 too many.