Youth Unemployment

Lord Adonis Excerpts

Thursday 14th June 2012 Lords Chamber

Moved By

[Lord Adonis]

That this House takes note of the level of youth unemployment and its social consequences.

[Lord Adonis]

My Lords, in opening this debate on youth unemployment, I cannot help observing that we have two and a half hours to debate one of the most critical issues facing the country, which is one-10th of the 25 hours that the House has spent debating House of Lords reform in the past two months alone. Perhaps our priorities are not in quite the right order, or in the right proportion.

I doubt that many Members of the House deny the urgency of getting young people into jobs. A lost generation is in the making, which could scar Britain for decades to come. On this, I agree with the Deputy Prime Minister, who described youth unemployment as,

“a ticking time-bomb for the economy and our society”.

I also agree with what he said needed to be done, which is to get every unemployed young person earning or learning again before long-term damage occurs. The question for this debate is how far actions match words.

However you look at it, the situation is dire. There are 954,000 people under the age of 24 who are not in employment, education or training. Most concerning of all, 167,000 of those aged under 24 have been unemployed claimants for more than six months, a number that has more than doubled since last April, while 61,000 have been claiming for more than 12 months—a number that has more than trebled in the past year. Young people have fared far worse than older people in the severe downturn. We can debate why this is the case but for the young people affected this is not an academic debate, it is a personal catastrophe—an immediate source not only of low income but of low self-confidence, poor health, damaged relationships and often extreme social marginalisation, all of which only further harms their job prospects and adds to the cost of putting it all right. I doubt that your Lordships will dispute any of this. The question is what we do about it.

Of the analysis that I have read in recent months, I have been most impressed by the report of the Commission on Youth Unemployment, sponsored by ACEVO—the Association of Chief Executives of Voluntary Organisations. It highlights three priorities. First, young people need more job opportunities to be available here and now. Secondly, young people need better preparation and motivation for work. There needs to be a new vision for what ACEVO calls,

“the ‘forgotten half’ of young people who are not destined for university or a high-quality apprenticeship post-16”.

Thirdly, unemployed young people need the support of a far more active welfare state to help them to get into work and to stay there.

Let me take these three priorities in turn. First, on more jobs, almost everyone accepts that stronger incentives are needed for employers to recruit more unemployed young people. The present Government, after first scrapping the previous Government’s future jobs fund, have now recognised the need to do more; hence, the new youth contract offering 160,000 wage subsidies of just over £2,000 each for new private and voluntary sector jobs given to long-term unemployed people over this year and the next two years.

The youth contract represents 53,000 work opportunities over the coming year, which, in the face of 167,000 young people who have been unemployed claimants for more than six months, is not that many, even if they are all created. However, 53,000 would be a start, so I would be grateful if the Minister would tell us precisely how many young people have so far this year been recruited by employers from the Work Programme and what is the Government’s projection for the rest of 2012?

Will the Minister also tell us what progress has been made in creating the 100,000 work experience places also promised for this year in the youth contract? I strongly support work experience placements, provided the young people are treated properly, but they are of short duration—as little as two or three weeks each—and are not, of course, a substitute for real jobs paying real wages.

My party believes that we need to go further than the youth contract; hence our proposed real jobs guarantee for the under 25 year-olds who are long-term unemployed. For those who are out of work for more than a year, there would be six months paid employment with the state providing a wage subsidy for 25 hours of work and the employer covering the cost of 10 hours of training a week. I look forward to hearing from the Minister whether, if the youth contract does not rapidly reduce the number of the long-term young unemployed, the Government will consider adopting the real jobs guarantee and the bankers’ bonus tax which makes it possible. I urge the Prime Minister and the Chancellor to do so sooner rather than later if their concern about the young unemployed is more than crocodile tears.

The second priority is to prepare people better for work. Schools and further education colleges have a big job to do in this respect. Even with the rise in school standards over recent years, four in 10 16 year-olds are still not getting five good GCSEs including English and maths, which is all important in terms of their employability. Professor Alison Wolf’s recent report on vocational education contains a startling fact. Of the four in 10 16 year-olds who do not get five good GCSEs including English and maths, only 4%—I repeat, 4%—attain GCSE level English and maths in any vocational education and training that they do afterwards. As Professor Wolf rightly says, English and maths should be the essential building blocks in whatever courses are taken by post-16 year-olds without basic skills. Urgent reform is needed here.

Better still of course would be for teenagers to get English, maths and a good general education while they are still at school. School standards are still not nearly high enough, particularly in the many hundreds of comprehensive schools where a majority of teenagers are still not leaving with essential GCSEs. That is the reason why the previous Government concentrated the academy programme on the lowest performing schools—to give them a “big bazooka”, in the words of the Prime Minister. I urge the Government to focus new academies and free schools in disadvantaged areas and to do more to support the recruitment of highly motivated teachers into such areas by, for example, expanding more rapidly than planned the excellent Teach First programme.

The education system also needs to promote technical disciplines far better. That is why I strongly support the university technical colleges proposed by the noble Lord, Lord Baker. They are academies for 14 to 19 year-olds, each with a technical specialism—ranging from engineering and construction to the digital media—and each sponsored and managed jointly by companies and universities.

Then there are apprenticeships. Everyone now talks the language of apprenticeships, which is a welcome change, and the Government cite very large numbers for new apprenticeship starts. However, if you scratch the surface you find that most new apprentices turn out to be in their late twenties and all too many of them existing employees renamed apprentices because of the Government’s rebadging of the Train to Gain employee training scheme as an apprenticeship scheme. Large numbers also turn out to be on short-term training courses of less than six months’ duration.

There is a real danger that apprenticeships are being dumbed down as fast as they are being created. How many 16 to 21 year-olds were last year in apprenticeships lasting more than a year that had both an employment and college-based component, and how many employers offered such apprenticeships in that year? Is the Minister’s own department giving a lead and offering apprenticeships? Does he by chance have an apprentice in his own office? When I was Minister, I did not—and, looking back, I should have done.

This is not just tokenism. Unless central and local government give a strong lead, they cannot complain if the private sector does not follow. Public procurement has an important part to play here. For example, Kent County Council makes the creation of apprentices a procurement condition for contracts worth more than £1 million, with at least one apprenticeship required per £1 million spent on labour. The first such contract was recently awarded to a company delivering highways maintenance which, as a result, will take on apprentices to cover at least 3% of its jobs. The company, fittingly, is called Enterprise. We need to seek far more enterprising companies of that type across England.

Unless good-quality apprenticeships for the under-21s, leading to good-quality jobs, become far more numerous, we will never have secure pathways to employment for teenagers who are not on track to go to university. As the ACEVO report says:

“If the route to university is a well-signposted motorway, the route into work for these 16-to-18-year-olds is more like an unmarked field of landmines”.

In this respect, I am attracted by ACEVO’s suggestion that we set up an equivalent of UCAS for apprenticeships, with employers, national and local, large and small, advertising their apprenticeships through a single web-based system. The aim would be for this to become as near as possible a universal listing service.

We also need more and better work experience for teenagers while at school, and systematic mentoring of young people by young people themselves, including those in work mentoring those out of work or on their way into it.

Thirdly, on the welfare system itself, the Minister is a respected champion of an active welfare system, one far more focused on helping people into work and mobilising organisations which are good at promoting this to do so instead of relying just on a state bureaucracy. Is he satisfied that the current system is remotely active enough in helping young people into work and training, particularly those who are clearly in danger of long-term unemployment, or only casual employment, because they have few qualifications and virtually no work experience? The Minister’s flagship reform is the work programme, providing intensive and tailored support for the long-term unemployed. I shall read out the description I have been given of young people’s eligibility to be included in the Work Programme. It says that,

“some will be referred on a mandatory basis after 9 months of claiming JSA … some will be referred on a mandatory basis after 3 months of claiming JSA (if they are 18 and were NEET for 6 months prior to starting to claim JSA, or if they claimed JSA for 22 of the past 24 months … some can be referred at the discretion of Jobcentre Plus after 3 months of claiming if they fall into particular categories (e.g. if they are care-leavers, or homeless) … some will be referred immediately after their Work Capability Assessment to determine whether or not they should be on ESA as opposed to JSA”.

So that is all clear then. More to the point, I doubt that it is at all clear to the young people who need this support, many of whom need it a good deal sooner than nine months after going on the dole, or after they have notched up 22 out of 24 months on the dole. I know that as part of the youth contract more support within Jobcentre Plus is being provided to the under-24s, but I would welcome the Minister’s views as to how intensive support can be given to young people who are clearly in danger of prolonged unemployment before they have been unemployed for the best part of a year.

These are all vital issues and I look forward to what other noble Lords have to say. I end on a personal note. When I was 18, in 1981, I went to sign on in my local unemployment benefit office, which was the former Camden Town workhouse. I had a few months to go before university and in those days students on holiday were allowed to sign on. However, as I was filling in my form, the manager spotted me, came over, and said to me, “Oi, you look as if you can read and write. How about a summer job working here?”. Within 10 minutes I was on the other side of the counter. I was given precisely 10 minutes training and 20 minutes later I was taking fresh claims. I spent that summer and all my university holidays thereafter working as a counter clerk in the Camden Town unemployment benefit office. This was a life course in bureaucracy and all its glories, but, more to the point, it was a life course in unemployment and all its evils. This was 1981, when unemployment went over 3 million. We had them queuing round the block to sign on, often taking six or seven hours simply to get through the queue—young and old, many of them were in tears as they told their stories. Virtually nothing was being done to help them. I hoped then that that situation would never happen again, but it is happening again; it is happening now. We all have a duty to see that the resources of the state are mobilised to the full to bring it to an end as soon as possible.

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[Lord Adonis]

My Lords, I have had my say. I just want to thank all noble Lords who participated in this important debate and to say that I hope it serves as a call to action in tackling what we all agree is one of the most urgent social crises of our time.

Motion agreed.