Youth Unemployment
Debate between Jayne Kirkham and Graham Stuart(5 days, 5 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Graham Stuart
The hon. Gentleman makes a fair and reasonable point, but if he goes back and looks through the data, he will see that youth unemployment stayed stubbornly high under the last quasi-socialist Government, and it was not just because of the 2008 crash. The truth is that, throughout that period, we had a much higher level of youth unemployment than we should have done. He says that we had austerity, but the then Government overspent. We inherited a massive deficit and slowly brought it down throughout the 2010s, but we overspent in each and every year, so the idea that we had austerity is a myth. “Austerity” means living within our means, but we did not live within our means. We overspent each and every year, but by the time we got to covid, we had managed to get our deficit right down. We showed fiscal responsibility, because we know that if Governments spend money that they do not generate, they impose a burden on the very young people on whom unemployment is now being imposed.
I will deal with the minimum wage, which Labour Members have touched on. They asked whether we want to tell young people that they are not worth higher pay. Well, if they do not have the experience, and if they lose out on getting a job against an older person because they do not even have cost competitiveness, they are in trouble. Since the introduction of the development rate in 1998, there has been a lower wage for younger workers. That is deliberate, for a very sensible reason: when young people enter the workplace, they are doing exactly that—they are developing. They are developing skills, confidence, discipline and the ability to work productively alongside more experienced colleagues. Employers were explicitly permitted to pay less in order to reflect an economic reality.
Graham Stuart
I do not doubt the good intentions of the Labour party, the Cabinet and the hon. Member for Truro and Falmouth (Jayne Kirkham), who I may allow to intervene in a moment, but good intentions do not disguise the truth. They have not run businesses, and it shows. They do not understand how employers make decisions or how behaviour is incentivised. By abolishing the development rate, the Chancellor wanted to signal that she is on the side of young people in order to put in place a political divide: “You Tories don’t want to pay young people a fair and decent wage!” Of course we do, but we want them to have jobs. This is the insider-outsider issue that my right hon. Friend the Member for East Hampshire (Damian Hinds) touched on earlier.
The effect that the Chancellor has had is the opposite of what she desired, and she is not helping young people. Many have received a short-term pay rise, but hundreds of thousands have received the ultimate kick in the teeth. They have received not a pay cut, but no pay at all, because the jobs they should have been offered have disappeared in a puff of the Chancellor’s smoke.
After the Government’s first Budget, a survey by the Beverley and District chamber of trade found that 88% of its members said they would be less likely to employ young people because of the rise in the minimum wage. Despite that warning, the Chancellor returned with a second Budget and destroyed even more opportunities with another £26 billion tax raid. We can but pray that she is out the door before she completes her tax-taking trilogy. If the Chancellor changes nothing, we need to change the Chancellor.
What would the Conservatives do differently? We would start with a simple truth: jobs are created by employers—by not Ministers, schemes or programmes. Private employers are the ones who generate wealth. The ladder of opportunity is not built by ministerial good intentions; it is built by creating incentives for the behaviours we want. The behaviour we want from employers is for them to take a risk, and to feel that it is worth their while for their family to invest in and give an opportunity to a young person. But under this Government, the first rung of the ladder is being sawn off. Young people do not begin at the top; they begin with a Saturday job or a summer shift, and their first payslip. That is where confidence is built, habits are formed and futures are forged. When those jobs disappear, the ladder does not get longer; it just gets shorter and steeper.
A Conservative Government will abolish business rates for retail, hospitality and leisure—not 10% of them, but 100%. Those are the sectors in which so many young people take their first step. Cutting costs gives businesses the freedom to grow and hire, and we do not need a vast number of people to administer a scheme. When we simply lower the costs for employers, they get on with it. That will create real opportunities for young people to learn, earn and prove themselves.
Under Labour, businesses face another three years of higher and higher costs, heavier regulation and constant uncertainty, leaving young people blocked, frustrated and struggling to get a foothold in the job market. We will repeal Labour’s job-destroying Employment Rights Act, because we cannot regulate our way to prosperity. The Act introduced 28 major reforms—count them—placing significant new requirements on businesses. By the Government’s own estimate, it will lead to £5 billion in costs.
The planned changes to zero-hours contracts are perhaps the most damaging to young people, because employees will require guaranteed hours and compensation for cancelled shifts. I fully accept that these measures are well-intentioned, but they will reduce the flexibility that employers value, and that young people also value because they can balance their studies with gaining experience. Businesses will hire fewer young workers, leaving a generation without the chance to learn, earn and prove themselves.
Graham Stuart
I hope the hon. Lady will say now on the Floor of the House that if the youth unemployment rate continues to go up, as it did under previous Labour Governments, from the 14% inherited from the Conservatives to 20%—if that were to be the terrible outcome, with its scarring impact on young people—she would not seek to stand for the Labour party at the next election, because she would recognise that she had failed us.
Jayne Kirkham
As an ex-employment lawyer—in fact, I was an equity partner in a law firm that employed 50 people, so I do have some experience—I remember that when the minimum wage came in in 1998, the figure for over-21s was the same, but the Conservative party changed that, so that those under 25 were paid less, although people’s rent does not cost less when they are 24. There is still a differential for under-21s of £2 an hour, so how can the right hon. Member say that that differential is no longer there when it still exists?
Graham Stuart
The differential has been eroded, but the hon. Lady is quite right to mention that. What we are talking about is balance. None of us is talking about a total free-for-all for employers. We are looking at getting balance, and it looks as though that balance has gone wrong, as the hon. Lady must know. What have been the great external economic shocks over the last year and a half? There have not really been any. There is no reason, other than the policies of this Government, for this increase in youth unemployment, with the loss of nearly 100,000 jobs in hospitality. This is about getting the balance right, and this Government have not done so.
The Conservatives will align incentives, cut costs and free businesses to hire—to get the balance right—and in doing so, we will give them the freedom to give young people a chance to prove themselves, because Conservative Governments stand for work, not welfare, and for opportunity, not dependency.