Unemployment

Lord Freud Excerpts

Wednesday 26th January 2011 Lords Chamber

[Lord Young of Norwood Green]

To ask Her Majesty’s Government what action they are taking to deal with the increase in the number of unemployed people aged between 16 and 24.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

The Government recognise the need to help young people into work and the adverse effect of long-term unemployment. Personalised support for young people through Jobcentre Plus, coupled with the new work programme will enable young people over 18 make the transition into work. We will help young people to make an effective transition from learning to work, and increase participation to reduce the numbers of young people who are not in education, employment or training.

[Lord Young of Norwood Green]

My Lords, given that these are the highest numbers of 16 to 24 year-olds recorded as unemployed since records began in 1992, does the noble Lord think that it is time for the Government to reconsider their decision to abolish the Future Jobs Fund, the guarantees on youth employment and the education maintenance allowance, as there is now a real danger of another lost generation? That concern is reinforced by the latest lack-of-growth forecasts, as I like to call them.

[Lord Freud]

My Lords, the figures for unemployment among young people aged 16 to 24 have risen with the recession and have been broadly flat from around the middle of 2009. They are still too high at 951,000 but they have been broadly flat in that period. However, I am worried about the number of NEETS in this country, which rose over the period of the previous Government by 250,000 to 1.4 million. That is a serious, long-term structural issue, and we have long-term structural plans to sort it out.

[Lord Forsyth of Drumlean]

My Lords, will the Minister confirm that despite the huge sums of money that were spent by the previous Government, he has inherited the worst legacy of youth unemployment that any Government have inherited in our recent history?

[Lord Freud]

My Lords, I confirm that I am very worried about the situation in respect of NEETs, which is underlying and structural, as I said. We have now transformed the programmes to do something about it. We are introducing the work programme in the middle of this year, and we are also transforming the nature of provision in Jobcentre Plus, making it far more flexible and designed to look after people as individuals rather than in broad groups based on their benefit, as has been the case.

[Baroness Howe of Idlicote]

My Lords, given the Minister’s concentration on NEETs, which many of us would agree is entirely right, is there more that companies could do to encourage young people to come in part time but be trained at the same time? Can he say more about that?

[Lord Freud]

Yes, an effective strategy has to be built around employers, and we are doing quite a few things. The most important one was the introduction earlier this month of work experience. The idea is to give eight weeks’ work experience to young people aged between 18 and 21 who are not in university, while they continue to collect benefit. We are also looking to introduce later this year the academy programme, which combines work experience with elements of training to introduce people to work.

[Lord Knight of Weymouth]

My Lords, as a Minister, I introduced something very similar to those new work experience programmes. We should note that between 1997 and the beginning of the recession claimant youth unemployment fell by 40 per cent. We have heard from the noble Lord, Lord Young, that unemployment for 18 to 24 year-olds increased from 17.7 per cent to 18.1 per cent in the last quarter. Is this because of the cuts to the Future Jobs Fund, the ending of the young person’s guarantee, the cuts to the education maintenance allowance and the raising of the cost of going to university; or is it because of bad weather?

[Lord Freud]

My Lords, I think that it is important that we do not get cheap on the movements: this is, as always, a very complicated set of movements. During the last month, for instance, the claimant count went down a little for the youngsters. It went up by 30,000 or so, but has been broadly flat since 2009. There will be reasons for the figure being up a bit, but I do not think that is the point. The point is that we have a serious underlying structural problem. We have about 600,000 youngsters who have not managed to get sustained employment after education. Within that figure, I do not have the exact number about whom we should be seriously worried. Of the 16 to 17 year-olds, it is about 50,000. These are youngsters who may never make the transition into proper economic activity. It is vital that we have structures to help them make that transition.

[Baroness Turner of Camden]

My Lords—

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[Lord German]

My Lords, in the year 2009-10, there was a 99 per cent increase in the number of people who were taking the job seekers allowance for more than 24 months. Among that group, who are the hardest to get into work, there must be a significant number of young people without qualifications. What actions are the Minister and the Government taking to deal with many of these people who were parked by training providers because they were too difficult to deal with?

[Lord Freud]

My Lords, I thank my noble friend for that question. Essentially, we are going to rely on the work programme and differential pricing to help the hardest to help.

[Baroness Turner of Camden]

My Lords—