Youth Unemployment

Lord Bates Excerpts

Thursday 14th June 2012 Lords Chamber

[Lord Bates]

My Lords, it is a pleasure to follow the noble Lord. I congratulate him on securing this very important and timely debate. His moving story of how he secured his first employment reminded me of the vital importance of human intervention. We often deal in schemes, numbers and bureaucracy and forget that these are real people who can be excited and motivated.

My interest in the unemployed is exercised in a practical sense through my role as a patron of Tomorrow’s People in the north-east of England, which works with hard-to-reach young unemployed people and tries to inspire them to get into work. There is no doubt that it can make a profound difference to young people to interact with people who believe in them—perhaps they are the first people to do so—tell them that they can achieve things and that they are a solution rather than a problem. Work is going on as we speak in that body’s Working It Out programme, which is taking hard-to-reach young unemployed people in the north-east of England, who often come from households who have been unemployed for generations, and is getting 75% of them into employment or training. Given that those people often have no qualifications, I find that inspiring, as is the transformational effect on their self-confidence of starting employment or training, which the noble Lord also spoke of.

I also completely agree with the noble Lord’s analysis of the vital importance of education in this area and applaud the work that he did when he was an education Minister to promote the academies programme. I know he will find it every bit as frustrating as do current Ministers that often areas where there is greatest need are the last to get the quality of education that they require. It is all well and good saying, “Wouldn’t it be great if more free schools and academies went to the areas where they are most needed?”, but, having tried to set up an academy and a free school in an area where they are most needed in the north-east of England, I found that they were fought tooth and nail every inch of the way by dog-in-the-manger local education authorities and trade unions, which blocked their paths. I find it deeply frustrating to see people wring their hands while talking about the young unemployed but then deny them the education which could provide them with a pathway into employment.

I also very much respect the way that the debate was introduced because it recognised that youth unemployment has been a long-term trend, as was set out in the helpful briefing pack that we received for this debate from the House of Lords Library. Youth unemployment was not invented in May 2010; it has been rising steadily. As Demos says:

“Before the financial crisis hit, youth unemployment had already been on the rise. In fact, UK youth unemployment has risen … as a share of total unemployment for the past 20 years”.

It also observes that from January to March this year the rate was 1.7% lower than the previous year. That is an important point. Although 1.02 million young people being unemployed is a tragedy, we must remember that before the last election the figure was 923,000 and on a rising track. Thankfully, that figure is now beginning to come down just a little, although of course not fast enough.

I want to devote my contribution to what is happening in the north-east of England. I think that there is something else missing from the debate here. It is more than a scheme or a government grant; it is telling young people that there are opportunities out there if they search for them and are willing to push for them. Before the last election, the north-east suffered a series of blows to employment, with the job losses at Nissan and the shelving of the Hitachi trains order. I know that the noble Lord, as Secretary of State, argued vigorously with his friends at the Treasury over that order, but it was shelved. That was followed by the closure of the Corus steel plant. However, over the past couple of years, we have seen the reopening of the plant; we have seen Nissan recruit 2,000 people directly or through the supply chain, and we have seen the £4.5 billion Hitachi trains order go ahead, and that will create 1,000 jobs in Newton Aycliffe. In recent weeks, we have seen Offshore Group Newcastle announce 1,000 new jobs building foundations for wind farms. Moreover, over the past year the number of jobs in the accommodation and food services sector in the north-east has increased by 9,000, up by 12.8%; jobs in science and technology in the north-east have increased by 8,000, or 13.6%; and the number of jobs in the arts and entertainment have increased by 22.4%.

I make those points not in any way to diminish the fact that there is a very serious problem but to stress that if we drum into young people that there are no opportunities, the situation is absolutely dire and there is no hope, we should not be surprised to find that that is the world view they take, asking themselves, “What is the point of applying?”. There are things happening.

Government have a role in this. It is not just about what the private sector is doing; the Government have a role and a social responsibility, and that is referred to in the title of this debate. I would argue that they are exercising that role in a number of ways. As the ACEVO report mentioned, what we need more than anything else is job opportunities—we need businesses to create more jobs. Therefore, it is very important that we see things such as corporation tax being reduced from 26% to 24% and then to 22%, and the freezing of business rates, and it is important that new start-up companies will not have to pay national insurance contributions for the first year when taking young people out of unemployment. These things make a difference. We have seen £1 billion going into the Youth Contract. In addition, the regional growth fund has invested £157 million in the north-east of England, with 33% of the projects that the fund has committed to being in the north-east. Get Britain Building was a programme announced in the Budget, with £28 million invested in the north-east, delivering 750 homes and supporting more than 1,500 jobs in the construction industry.

The north-east is home to two of the enterprise zones. Of course, there is also the element of making work opportunities—particularly low-paid work opportunities—attractive to young people. Raising the tax thresholds, which has taken 84,000 north-east people out of paying tax altogether, is making those positions more competitive and giving people a better wage than was the case before those thresholds were raised. We have seen the number of apprenticeships in the north-east rise by 87% in the previous year—up from 18,510 to 34,550. There is absolutely no doubt that more can be done, but my argument is that a lot is being done and the picture is not as dark as it is sometimes painted in the media. There are opportunities out there and we ought to encourage people to realise their dreams and use the full talents that they have been given.

[Lord De Mauley]

My Lords, I draw noble Lords’ attention to the fact that Back-Bench contributions are time-limited to 7 minutes.