Employment: Young People

Lord Freud Excerpts

Wednesday 5th February 2014 Lords Chamber

[Baroness Byford]

To ask Her Majesty’s Government what assessment they have made of the impact of the Youth Contract in helping young people into employment.

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

My Lords, the Youth Contract builds on the support already available from Jobcentre Plus to help young people get back into work. Our approach is working. The number of young people claiming jobseeker’s allowance has fallen for the 19th consecutive month.

[Baroness Byford (Con)]

My Lords, that is indeed good news. Does my noble friend recognise the contribution that voluntary youth organisations, particularly armed services cadet forces, play in the development of young people and in preparing them for the work ahead? Can he tell us what the assessment is of long-term youth unemployment in this country?

[Lord Freud]

My Lords, one of the most serious problems that we inherited was around long-term youth unemployment; that was structural rather than cyclical. The measures that we have been taking are to get the education and training base for youngsters right. As I have told noble Lords in the past, I thought that the Alison Wolf report on dealing with this issue was most remarkable. We are pushing that through at every level.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, can the Minister tell us how many young people in the north-east have benefited from the measures that the Government have put in place to tackle youth unemployment?

[Lord Freud]

In the north-east, the number of youngsters—those under 24 years old—who have been claiming as unemployed has gone down by 27%; that is by 7,500 to a figure of 20,000. One of the interesting things about the unemployment figures is how broadly based they have been. If you take the four most northern regions of the country—the north-east, the north-west, Yorkshire and Humberside, and Scotland—they have in combination reduced their claimant count by 43,000 youngsters to 118,000. That is, interestingly, rather more than London and the south-east.

[Lord Martin of Springburn (CB)]

The Minister will recognise that there are far more self-employed journeymen and women than there used to be. Are the jobcentres targeting these self-employed people to take on apprentices?

[Lord Freud]

The apprenticeship is one of the most valuable ways of getting youngsters into the workforce. Clearly, sole traders are a valuable resource for that. One of the most interesting projects is called Working Rite, which pairs up youngsters with sole traders. That is something that we encourage.

Looking at the number of apprenticeships as a whole, in the three years since the election we have had nearly 1 million apprenticeships of people under 25. That is very encouraging; it is 50% higher than the equivalent three years beforehand.

[Lord Baker of Dorking (Con)]

My Lords, does the Minister not agree that the cost of youth unemployment today is, annually, £4.8 billion. If you allow for lost output, it is £10 billion. Should not the target for every school in the country be that when youngsters leave at 16 or 18 they either get a job, a higher apprenticeship, an advanced apprenticeship, go on to college to do A-levels or go to university? That is a target that university technical colleges have, and it is a target that is met.

[Lord Freud]

My Lords, I could not agree more with my noble friend. There are only four things one can do to help youngsters into the workforce: directly get them a job; training and education; apprenticeships; or work experience, which is a stepping stone. That is what Alison Wolf told us, and that is what the Government are aiming to do.

[Baroness Sherlock (Lab)]

My Lords, I think the Minister said that the Government inherited high long-term youth unemployment from the Opposition. However, the ONS publication Labour Market Statistics shows that long-term unemployment for 18-24 year-olds is 232,000. The same data set shows that in the period spanning the last election it was only 188,000. Labour has made it very clear that we would guarantee a job for every young person out of work for more than a year and make them take it. What will the Government do?

[Lord Freud]

My Lords, the figures the noble Baroness quoted are very distorted by the training allowances, which got people off the long-term measure. I will not go into a long song and dance about it, but those figures were the result of a very distorted comparison. I have quoted the real figures—the ones that matter—to this House on a regular basis. When you look at youngsters who are both workless and outside full-time education, that figure rose through the longest boom we have seen in our history because of structural inability to get those youngsters into the workforce. There was neither adequate education nor routes into the workforce. We are turning those figures round—and they are the real figures.

[Lord Roberts of Llandudno (LD)]

May I ask the Minister how we monitor the success of these training schemes and apprenticeships? How many are effective in providing long-term, standard employment when their training or term of apprenticeship comes to an end?

[Lord Freud]

My Lords, it is vital that we have routes that lead into long-term, sustained employment and into being part of the economic life of the country. It is a bit early to look at the apprenticeship figures yet, because they are long term, but if you look at the work experience figures, nearly half the people on work experience were off benefits 21 weeks after starting a placement. That is more or less the kind of figure we saw with the Future Jobs Fund. The difference is that this work experience cost one-20th of what the Future Jobs Fund cost the previous Government.