Youth Unemployment

John Hayes Excerpts

Wednesday 9th November 2011 Commons Chamber

[Mr Byrne]

I will give way in a moment, because I want to turn to apprenticeships, which the Minister has mentioned. Apprenticeships have sometimes been seen in this debate as the Department’s silver bullet, so let us be clear: ours was the party that rescued apprenticeships. We inherited 65,000 apprenticeships; the figure was over 260,000 when we left office. This year, 85% of new apprentices will not be young people, but people over 25. Leaked documents seen by The Guardian show that Ministers have been warned that apprenticeships are actually a re-badging of existing jobs. It turns out that about 11,000 of this year’s new places have gone to 16 to 18-year-olds. I should point out for the House that 205,000 of those aged 16 to 17 are now on the dole. If they all applied for one of those apprenticeships, they would have a 5% success rate. Getting into Oxford university is less competitive than that. Given those figures, an ally of the Chancellor of the Exchequer has said that the Chancellor thought that apprenticeships were

“a rare piece of good news, but it’s turning out to be a con”.

The unnamed ally is right: it is a con. We have a Work programme that is all programme and no work, a youth jobs scheme that costs less than the stationery budget and an apprenticeship scheme that is harder to get into than Oxford university. No wonder overall long-term youth unemployment is going through the roof. Let us hear an answer from the Minister.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

I am very happy to tell the right hon. Gentleman all about it, but I wonder whether he will acknowledge that today there are more apprentices under 25 than the total number of apprentices when his Government left office and that the two-year growth in apprenticeships for 16 to 24-year-olds over the last two years is bigger than at any time when his party was in office.

[Mr Byrne]

Will the Minister intervene again and say whether it is more competitive to get into Oxford university or to get on one of his apprenticeships? Just tell us: which is easier?

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[Mr Hayes]

I am not sure that that is particularly relevant to the question that I asked, but I will ask the right hon. Gentleman another question. His Government commissioned the Leitch report—[Interruption.] It was probably the right hon. Member for Morley and Outwood (Ed Balls) who commissioned it—he was running the show in the Treasury then, or so he now pretends. What does the Leitch report say? It says that we need to upskill and reskill the work force and that apprentices are a critical way of doing that. Is the right hon. Gentleman now denying that? Has he changed his mind, or does he in fact think that we need to use apprenticeships for that purpose?

[Mr Byrne]

I want apprenticeships for young people, and it is this Government who are not delivering them. That is why, all over the country, we now see long-term youth unemployment rocketing up. Some 233 Members of this House now represent constituencies where long-term youth unemployment has risen by over 100% this year. Overall, long-term youth unemployment is up by 64% since the start of the year. All over Britain, scars that we thought were gone for ever are reappearing, and not just in Labour constituencies, but in places such as North Dorset, Aylesbury and Stevenage. Some 238 of us now speak for constituencies where, since the election, youth unemployment is up by 20%.

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[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

We are having a debate about the economic situation and its impacts on young people. My constituency has felt the chill winds disproportionately, as has the constituency of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). My local authority, Sandwell, has the third highest rate of youth unemployment in the country. We also endured high youth unemployment under the previous Conservative Government. The Labour Government made substantial inroads, but the problem is now back with a vengeance.

On the general economic situation, some of the Government’s measures are aggravating the problems, which are a by-product of our poor economic performance. The higher education proposals, for instance, will disincentivise young people from low-income, low-aspiration backgrounds from entering higher education, and there is a great danger that young people from areas such as mine will look to take an alternative route, such as vocational training and apprenticeships. That is not in itself bad, and it may well be of great benefit to the economy, but the cohort of young people who previously would have gone into apprenticeships and training will find that they have nowhere to go. That is already being reflected in the increase in the number of NEETs in the country as a whole, and certainly in my area.

The Government trumpet the progress made on apprenticeships, and I welcome apprenticeships, as they are potentially of enormous benefit. However, the fact remains that the greatest increase in apprenticeships, as of this moment, is in the post-24 age group, and there is a suspicion that this is just a rebadging of the old Train to Gain scheme. In addition, the headline figures do not take into account the number of short apprenticeships—these are not the two or three-year courses that we commonly think of as apprenticeships which will enable people to go into work. My Committee will be undertaking an inquiry into this in the new year, and I hope to be able to drill down to find out exactly what the situation is.

[Mr Hayes]

I am sorry to have to intervene, because I know that time is short. Let me assure the hon. Gentleman that I take his work seriously in that regard and that we, like him, are determined to see apprenticeships of the right quality and to see bureaucracy cut so that more firms can be involved. He is right to say that apprenticeships matter, but the brand matters too and we are as committed to quality as he is.

[Mr Bailey]

I welcome the words of the Minister, whose commitment to this cause I would not doubt for a moment. I am sure that we will have an extremely enlightening inquiry in the new year.

I shall highlight two measures that would cost the Government very little but would help. First, they should continue the funding for the graduate internship scheme—these are funded internships for graduates in small businesses. This has proved to be of enormous benefit to small businesses and to the graduates, and the total cost to the Government would be about £8 million. Given that this is a win-win situation—it helps the small businesses and graduates, and the cost would be lower than that of keeping them unemployed—I would have thought it was an obvious thing to continue. Also it sends messages to young people thinking of going to university that there is career progression after graduation. In the context of the highest level of graduate unemployment since 1992, that is a very important thing for the Government to do.

Secondly, small businesses are crying out for a financial incentive to encourage them to employ young people. The Government have introduced national insurance breaks. The existing scheme has not been very successful, and there is £850 million allocated for it. It should be broadened to existing businesses or, as the CBI says, a possible cash payment should be established for companies that take on young people and give them meaningful employment. These are not the words of tax-and-spend merchants; they are coming from the Federation of Small Businesses and the CBI—the authentic voice of the business community. If the Government do that, without great cost, it could make an impact on youth unemployment.

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[Pat Glass (North West Durham) (Lab)]

I had prepared something long and detailed, but I will keep my remarks brief because I want to let other Members speak.

When I made my maiden speech in May 2010, I spoke about unemployment, particularly youth unemployment, in my constituency; and when I checked my predecessor’s maiden speech, made in 1987, I discovered that she, too, spoke about unemployment in the north-east and North West Durham.

[Mr Hayes]

I remember that.

[Pat Glass]

I thank the hon. Gentleman for that. Anyone looking at those two speeches could be forgiven for thinking that this is a deeply entrenched problem that cannot be dealt with, but actually, that is not true. Between 1997 and 2010, North West Durham, like most of the post-industrial north, underwent an economic and social revolution, with the support of the previous Government, but it is amazing how quickly the clock has turned back to the 1980s. Under a previous Conservative Government, male unemployment in Consett, in my constituency, reached 100%. Can people now imagine what it is like to live in a place with 100% male unemployment?

Youth unemployment in my constituency has doubled in the last 12 months and now stands at 35%. Unemployment generally has increased by 20%, and it is a direct result of Government policies. The Prime Minister tells us that we need to rebalance the economy from the south to the north and from the public sector to the private sector, so that, as public sector jobs disappear, they are replaced by private sector jobs. We would all agree with that, but in my constituency, full-time relatively well-paid public sector jobs are disappearing at a rate of knots and are being replaced by very few part-time, poorly paid jobs.

If the Government are serious about delivering on unemployment in places such as the north-east, they need to be serious about a growth strategy. We do not need enterprise zones and short-term grants. We have had those before and they do not stay: as soon as the grants run out, the jobs disappear and everybody runs back to the south-east. We need instead proper infrastructure investment, so that private companies are attracted to the area and stay. That means investment in roads and rail, airports and broadband. Some 46% of my constituency is a broadband blackspot.

We need investment in skills. Nissan came to the north-east not because of the grants but because of the skills that were there when the shipyards and the steelworks closed down. We need investment in a growth strategy for the regions. But what have the Government done? They have cut public expenditure for infrastructure and jobs, and cut investment in skills. The abolition of the EMA has led directly to falls in participation rates at 16 to levels that we have not seen since the 1990s, and the tripling of tuition fees has led to a 12% reduction in university applications this year.

Young people are having a hard time from this Government and it is due not only to the abolition of the EMA and the rise in tuition fees, but to the cuts in home-to-school transport, home-to-college transport, careers services, youth services and local bus services. Young people are becoming more cynical now than they have ever been about politics and the role of the Government. I am pleading with the Government now to listen to the suffering out there and start putting in place a proper plan for growth and jobs for young people.

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[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

How could we not be moved by what the hon. Member for Hartlepool (Mr Wright), my hon. Friends the Members for Blackpool North and Cleveleys (Paul Maynard) and for Aberconwy (Guto Bebb), and the hon. Members for North West Durham (Pat Glass) and for Wansbeck (Ian Lavery) said about the plight of young people in their constituencies? Let there be no dispute about this: there is no denial and there is no complacency. [Interruption.] Of course this matters to all hon. Members in this House, and it ill befits Opposition Members to suggest that they have a monopoly on care.

[Ian Austin]

Will the Minister give way?

[Mr Hayes]

I will not give way.

Hearing Labour Members talk about generational joblessness reminded me of the plight that my father and my grandfather suffered in the ’30s when they were jobless. The story now, as we have heard from Members across the House, is no less tragic than it was then. That is why the Government are doing something about it.

All hon. Members who have spoken in the debate must be disappointed by the motion. Like worn-out conjuror’s paraphernalia, it is all smoke and mirrors. It resembles the economic policy that the last Government practised when the shadow Chancellor was their senior economic adviser, and we all know where that led. It led to the point at which the shadow Secretary of State, who introduced this debate, left his famous letter saying “There’s no money left”. We can see the shadow Chancellor’s footprints and fingerprints all over the motion.

[Mr Byrne]

I am genuinely grateful for the tone that the Minister is trying to strike, but does he understand the signal that it sends, in a debate on youth unemployment, when the Department for Work and Pensions Minister cannot be bothered to turn up for more than half the debate and the Secretary of State is nowhere to be seen?

[Mr Hayes]

The right hon. Gentleman obviously wants to make party political and partisan points. However, I was suggesting, perhaps unfashionably—perhaps this is not typical for the Opposition—that this matter goes beyond party divides, and that we should be united in our concern and in a call for action.

The shadow Chancellor is not without redeeming skills. I understand that, when he was at public school, he was good at playing the violin. So Balls fiddles while Byrne roams around talking down Britain’s chance to succeed.

Let me deal with the three principal points that have emerged from the debate—first, the future jobs fund. It was by far the most expensive part of the September guarantee package, at £6,500 for each individual, and 50% of the people who were under the influence of the fund found themselves unemployed eight months later. That is why we questioned its value—not because it did no good, but because it did not do enough good and was simply not cost-effective.

The second big issue that has been raised today is that of NEETS. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) and the hon. Member for Leeds West (Rachel Reeves) must know that the NEETS figures are part of a deep, long-term structural issue. Throughout the good years, the NEETs figures were at an unacceptable level. The right hon. Gentleman will see from the figures that in 2009, on Labour’s watch, the number of NEETs rose to 925,000. The truth is that youth unemployment involves long-term structural and systemic issues, and this debate was a chance for us to consider them seriously. Instead, what we have heard from the Opposition was little more than party political knockabout.

The third point to emerge from the debate relates to apprenticeships. Let us deal with them head on. I shall leave aside the fact that the right hon. Gentleman has rubbished all those in his constituency doing apprenticeships in their 20s—people like those at Jaguar Land Rover or at BT.

[Mr Byrne]

Will the hon. Gentleman give way?

[Mr Hayes]

No, you had your chance.

The right hon. Gentleman rubbished people at BT, Honda and British Gas—[Hon. Members: “Give way.”] I give way to him.

[Mr Byrne]

Will the Minister tell the House by how much youth unemployment will fall as a result of his apprenticeship programme?

[Mr Hayes]

The right hon. Gentleman knows the answer: over two years, the growth in apprenticeships for people under the age of 19 has been 29% and for people aged between 19 and 24 it has been 64%. Labour could only dream of those figures, and would have died for them in government. The number of apprenticeships for young people is growing. There are new opportunities, and while Labour is deliberating, the Conservatives and Liberals are delivering. That is the difference.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Does it not tell us everything we need to know that when there is a debate in the House on tax support to create jobs for young people, there is not one Treasury Minister on the Front Bench for the opening and closing speeches? Is that not a matter of great shame for the Government and an embarrassment for the Department for Work and Pensions?

[Mr Hayes]

I offer the shadow Chancellor this, and I do so fraternally: if just occasionally he would temper his belligerent bombast with a degree of humility about the advice he gave the previous Prime Minister and Chancellor, he might manage to stop his reputation flatlining.

The motion shows that the old conjuror has learned no new tricks. Once again, we have profligacy dressed up as prudence. It is public policy transvestism: from a distance, the promise of tax breaks may look alluring; only up close can we make out the underlying 5 o’clock shadow of debt and downturn. That is all the 5 o’clock shadow Cabinet can offer.

Some people think that many of the Opposition Front Benchers have been over-promoted, but I give them a second chance. I have a very small bet at very long odds that there is an outside chance that some of them may make a half-decent job of it.

This Government are acting on apprenticeships. We are acting on the Work programme. We are acting on work experience. We are working on getting people into jobs. That is the difference between this Government and the previous Government. We care too, but we act as well.

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.