Youth Unemployment

Lord Freud Excerpts

Monday 7th April 2014 Lords Chamber

[Baroness McDonagh]

To ask Her Majesty’s Government what action they have taken to tackle youth unemployment.

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

The Government provide support to young people through Jobcentre Plus as well as through the youth contract and the Work Programme. Our approach continues to work. The youth claimant count has fallen for the 21st consecutive month.

[Baroness McDonagh (Lab)]

Why then has long-term youth unemployment doubled since 2010 and why, according to a recent Local Government Association study, were 40% of young people underemployed? Does the Minister agree that the Conservative Party has form on this? It is what it did in the 1980s, causing long-term generational unemployment with catastrophic social and economic consequences, only now it is being aided and abetted by the Lib Dems.

[Lord Freud]

There is a great deal of confusion about long-term youth unemployment. The actual figures, rather than the fantasy figures made up on the opposite Benches, show that before the coalition came to power long-term youth unemployment had doubled. Since then, that increase has slowed and the figure has now started to fall—it was down 38,000 this quarter and 59,000 this past year—and the long-term count has fallen for the 12th consecutive month. Those are the unemployment figures. One of the sources of the confusion is the JSA claimant count for long-term youth unemployment. The reason for that confusion is that the previous Government hid long-term unemployment by introducing training allowances, which took people off. So those figures are distorted. The right figures, which show the underlying position, are the ILO unemployment figures which I have just given.

[Baroness Wheatcroft (Con)]

My Lords, I recently visited the Hammersmith Jobcentre Plus. I recommend it to all noble Lords, and not only if they are looking for jobs. It was a delight to see that under one roof one could get help with housing, drug and education problems as well as with jobs—and, of course, the first three are important in finding jobs. Does the Minister agree that this holistic approach is paying dividends?

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[Lord Freud]

The key element of universal credit, clearly, is that it is an incentive for everyone to go to work and to work more. That is particularly attractive to younger people who are excluded from tax credits. Around universal credit, we are putting in place a series of local partnerships so that we can provide holistic help for people who have barriers to going into work. That is the issue. One needs to address the structural problems of getting youngsters and, indeed, others into work and not fiddle around with figures.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, first, I am not clear about what the Minister said in his earlier reply on the numbers. Is it not true that the underlying trend for the number of long-term unemployed is still increasing, even though there have been some decreases latterly? Also, the figure is still higher than it was under the previous Government. Secondly, can he state whether he meant to say, when he attacked Labour’s policy of putting people into training, that he would rather have them unemployed than in training?

[Lord Freud]

My Lords, the figures show that the long-term unemployment figure is still 6% higher than it was in 2010, on top of the doubling that was seen under the previous Government. I am absolutely behind training because it is the way to help people, particularly youngsters, get into the labour market. The trouble is that when things such as training allowances are used as a way of distorting the underlying problem, it misleads people. Indeed, I think it has misled a lot of Members on the other side of the House.

[Lord Roberts of Llandudno (LD)]

My Lords, first, is the Minister satisfied with the quality of the interviews being conducted by Jobcentre Plus and with careers advice in schools? Secondly, does he agree that we need to look very much at the core unemployment rate, which is a major problem that the Government are not succeeding in solving, whichever party is in power?

[Lord Freud]

We are looking to improve careers advice in schools and Ofsted has confirmed that it will give this guidance a higher priority. Reducing unemployment is clearly a central objective for this Government, and I thought it was interesting that a couple of weeks ago the Financial Times reported that we have now overtaken the United States in our participation rate, a rate that normally falls during a recession. We have also been pushing employment up in the key 25 to 35 year-old group between 2007 and 2013.

[Baroness Prosser (Lab)]

My Lords, will the Minister explain why this Question is being answered by the Department for Work and Pensions and why we do not have a Minister from either BIS or the Department for Education? Is it because the Government see youth unemployment as merely a welfare problem and not as an issue of training and getting young people into work? Is he further aware that the Department for Education spends 0.04% of its budget on careers advice, the lowest percentage in the developed world?

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[Lord Freud]

My Lords, the reason I am answering this Question is that I represent the Department for Work and Pensions, so it is fairly self-evident that I should be responsible for it.

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend confirm that neither the Opposition nor the Government can create jobs for young people, and that the fantastic work being done by the Government in encouraging apprenticeships, and the Budget measures that have reduced national insurance contributions by £2,000 for those who take on young people, will do far more than the kind of comments we have heard from some parties about offering youth job guarantees that are undeliverable?

[Lord Freud]

My Lords, the party opposite has a policy of guaranteeing jobs that cost more than its own costings. It thinks that the policy will cost £1.9 billion in the first year and £0.9 billion in subsequent years. The Treasury has looked at the Opposition costings and puts them at £2.6 billion a year. That money is anyway to be taken from a tax on bonuses that has already been spent. Apparently it has been spent 10 times over, but it is now to be devoted to this policy. Most disturbing of all is that to the extent that this is built on the Future Jobs Fund, the figures show us that we can get the same result for youngsters through the Work Programme, which delivers real jobs with mainly private sector employers. We are achieving the same outcomes at one-20th of the cost. You know what you get with Labour: tax and spend.