EU: Youth Unemployment (EUC Report)

Lord Brooke of Alverthorpe Excerpts

Tuesday 17th June 2014 Lords Chamber

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am a member of Sub-Committee B and was, happily, very much involved in the production of the report. Like others, I express my gratitude and pay tribute to the noble Baroness, Lady O’Cathain, for her brave leadership and determination to get the facts and to stick to making recommendations, even though they may not be too popular, necessarily, with her own Government. She has certainly ploughed an individual line there, well supported by her committee. My grateful thanks go, too, to our clerk Nicole Mason, to our policy analyst Paul Downing and to Deborah, as well as to our specialist adviser John Bell, who is up in the Gallery, for all the guidance and assistance which he gave to us.

Since we started this inquiry, as many others have mentioned, unemployment has declined, happily, which is welcome. Youth unemployment in the UK has also gone down, as indicated in the letter sent to us yesterday, although it has not gone down by quite so much as the general reduction in unemployment. None the less, that is a move in the right direction. However, we are still concerned about the underlying trend of 16 to 24 year-old NEETs. That is still a significant problem and a hard one to crack, as the Minister will know given that he tried to assist in the efforts of a previous Government to resolve this long-standing issue. This problem first reared its head in 2003-04, when the underlying figure for NEETs rose notwithstanding the growth in the economy and the general expansion of GDP.

As others have mentioned, there is also a very serious youth unemployment problem in many EU member states—hence the intervention of the Commission and the Council to try to help. We were not surprised to find that many EU countries were in a much worse position than the UK. However, as other speakers have identified, some are doing better, notably Germany, which is well ahead of the rest. Austria has also done well in this regard, as has Holland, and the situation in Scandinavia has improved. It was interesting to note that a significant change has taken place not just in Malta but in Finland. Those countries put that down to embracing the Youth Guarantee.

We considered what the winners in this situation were doing and whether we could emulate that. It is interesting to note that each of them has a more highly developed social partnership economy than we do. We tend to have a more flexible and laissez-faire approach than is the case in Germany and Holland. We also noted that all those countries had embraced the Youth Guarantee. Indeed, all the European countries have embraced it with the exception of the UK. That is an important difference and I shall devote most of my speech to addressing that issue. I appeal to the Minister not to stick too strictly to his brief when responding to the debate.

As we have heard, the committee took a lot of evidence and visited different parts of the country as well as Brussels. We found that the majority of people who submitted evidence to the committee, particularly people in this country, were in favour of adopting the Youth Guarantee. We produced a report in which we set out what we thought were cogent arguments for instituting a number of changes. We particularly wanted to persuade the Government that they should adopt the Youth Guarantee. We have been fairly modest in not asserting that it should be applied across the whole country and to all those who come off JSA after six months. We have suggested that the Youth Guarantee should be introduced only in limited areas, and that the Government should address those areas with 25%-plus youth unemployment.

Regrettably, the Government have resolutely tried to persuade us that what they were doing was more effective than the Youth Guarantee and praised the UK’s Youth Contract. However, many of our witnesses did not share that view of the Youth Contract, although it was interesting to hear what the noble Lord, Lord Shipley, said about how he sees it working in the north-east. We are grateful to the Government for sending us a 36-page document seeking to persuade us to drop our line that there was something special about the Youth Guarantee that ought to be explored. However, we have stuck to our guns. Indeed, we note that the written response still seeks to make us change our minds in that regard. I hope that the noble Lord might be prepared to reflect a little again on what we have put before him. Incidentally, I share the view of the noble Baroness, Lady O’Cathain, that when we get these long letters it would be a great help if the paragraphs were numbered in the way in which we have numbered our report. It would then be much easier to pick up individual points and refer the noble Lord to them.

I read that letter carefully overnight. I do not have a speech that responds to all the points, but I felt that the letter makes an underlying case for a trial of the Youth Guarantee. The more I read it, the more I thought, “They are making the case for us”. What comes through clearly is that there are areas in which—the noble Lord’s officials were open and straightforward with us on this when they gave evidence—they do not track everyone. In particular, I should like to ask a question about 16 and 17 year-olds. The noble Lord says that the number of NEETs has reduced significantly. We were unable to find the figures that related to these people. His department’s officials could not tell us how many were in that category. How many people just disappeared? When they left school, the officials did not know where they had gone. I should be grateful if the noble Lord could tell us the numbers and how he has managed to find them. When his people came before us in the autumn, they were unable to tell us.

This involves the worrying group that disappears into the ether. In our opinion, people in that group should be picked up because they are, effectively, trainee NEETs. If they disappear in this way, many of them will end up being permanently unemployed. We thought that if the Minister was prepared to look at the Youth Guarantee, he would find that they would be required to come into the system within four months of having left school or college. There would be a requirement to put them in the system and follow them through it.

I say to our friend the Minister, whom I refer to as a friend because he has worked on this issue for both sides, that it is difficult to see among the arguments he has advanced—given that we have European money and particular locations with special problems, and we are not asking him to run this across the whole country but only in limited areas—why he is so steadfastly opposed to the Youth Guarantee, when it has seemed to work elsewhere, has been effective and could be effective in the UK. Even if he is not prepared to look at the five areas—although I know that devolution means that Scotland has responsibility for what happens in Glasgow—and even if he went to just one of the four other areas, I am sure that our committee would be happy if we saw the noble Lord trialling the Youth Guarantee in one area.

Ultimately, while we share the direction in which the Government are travelling, to devolve down the line, we find that there are so many different interests with a finger in the pie that it is difficult to identify who, at the end of the day, has full responsibility for each individual who gets lost and ends up being permanently unemployed or workless. We have colleges and schools with a finger in the pie, as well as the careers service, the LEPs and the local authorities, which pick up people who fall into difficulties—but only where they have a responsibility to ensure that such people are cared for. We need to start looking at providing a worker who can help each person, take them into employment, training or education, and keep them out of this ever-growing category—a cohort that stays workless for many generations. It comes through clearly in the noble Lord’s letter that there are too many fingers in the pie. We need to focus on individuals who can actually deliver.

The Minister could use the money from Europe to trial the Youth Guarantee to see whether it works. It is perfectly in line with the compelling evidence that we received from the noble Lord, Lord Heseltine. This is not a party-political issue at all. We all have a serious issue and are trying to resolve those underlying problems. Ultimately, it should not be just at the four-months point when intervention should take place to try to get the numbers down; in due course, such intervention will have to be when they leave college or schools. That is not in our report and it is not going to happen. Perhaps in the mean time, however, the Minister could at least reflect on whether to carry out a trial, implementing it at the four-month point in one of the areas of the country where we have 25%-plus unemployed.