Youth Unemployment

Lord German Excerpts

Thursday 14th June 2012 Lords Chamber

[Lord German]

My Lords, I too pay tribute to the noble Lord, Lord Adonis, for securing this debate. I shall say a few words later on about his opening remarks because he raised matters of great importance that lie underneath this important issue. As many noble Lords, including my noble friends Lord Bates and Lord Roberts, have said, this is not a new problem. We have seen the number of unemployed young people reaching ever upwards since 2002, but it is acerbated at the moment. Young people are especially badly hit by poor economic times. Employers are reluctant to hire new workers, more experienced workers compete for lower paid entry-level jobs and older workers hold on to their jobs for longer than usual.

As the noble Lord, Lord Giddens, said, this is not simply a UK problem. It affects the developed world and the developing world alike. Across Europe, the Americas, the Middle East and north Africa, the problems are the same. In its recent youth employment trend report, the ILO forecasts that the current high levels of youth unemployment around the world will continue for the next four years. The growth in the knowledge economy, globalisation and technological change have led to a fall in the demand for low-skilled workers. Entry-level jobs tend to be concentrated in the service sector, and many of them require people to have soft skills. We can think of the people who answer the telephone when you have a banking problem or an insurance problem. They require soft skills and a readiness to be available for on-the-job work from day one. It is regrettable that many of our young people without work are not coming out of the education system with these skills.

We have a long-term issue with a serious short-term spike, although the short term might extend over two or three years. As with all longer-term, deep-seated problems, a degree of political consensus is required if we are to tackle the long term. In his very interesting opening remarks, the noble Lord, Lord Adonis, concluded that there were areas of great agreement, which is what we are hearing today. For the longer-term problems that we are going to have to deal with, which will span more than one election period, does he have any ideas about how we can promote that consensus over a number of years? Equally, does he have any idea how we can produce it for the UK as a whole? I was interested, and I know that my interest was shared by many people around the Chamber, in the way in which you have to handle the education system and make changes to ensure that we get the outputs that we need. However, I know that those views are somewhat in conflict with those of some of his colleagues currently holding ministerial posts in the country in which I live. If we have a requirement to provide UK solutions to problems of this sort, I wonder how we can best get together and reach that consensus, which cannot be achieved without the education and skills agenda.

My second point is about the underlying problem that we are trying to solve here. You could address different remarks to different parts of the problem, but I agree with the ACEVO commission on UK employment, whose conclusion was that there is a,

“lack of vision for the ‘forgotten half’ of young people who are not destined for university or a high quality apprenticeship post-16”,

and that the route into work for these 16 to 18 year-olds was,

“more like an unmarked field of landmines”.

That drives me to the conclusion that the issue that matters more than any other is those young people who are in the NEET category, a term we have used extensively in this debate. I suspect that that is too general a title but this group is the most difficult to reach, and early intervention is crucial if we are to make a change, which is why the pupil premium is so important in getting in early. In terms of intervention, those people are the most difficult to reach—the high fruit on the tree, if you like; the most tricky to find appropriate solutions for. They become even more important at times of economic difficulty, as more educated younger people enter the jobs market at the lower-skills end, so displacing the unskilled. All the figures now show that a growing number of people are moving into that category of core NEETs.

I shall give your Lordships examples of pre-NEET work being done in two areas that I know well. The first is at Newport High School in Wales and the second is Bedminster Down School in Bristol. Both these schools have taken pupils from the age of 13 out of the school environment altogether, put them into a community environment and worked with them on trying to raise their skills, with such a level of success that those pupils have achieved a pass rate of five GCSEs or more of about 50%, and about 50% of that 50% are going on to post-16 education. These experiments are probably being replicated around the country. Are we building upon those successful stories of local experience and local work, which may well be replicated by voluntary organisations and schools throughout the country? It is important that we try to meet the substantial needs of this group of young people who are so difficult to reach.

The youth contract contains a suite of measures, but does the Minister believe that they are yet of sufficient scale to deal with the problems that we are facing in both the short and long terms? I also believe that we will have to do more on the supply side. Most of the interventions that we have been talking about are on the demand side, but we have to work much more strongly with employers. The Chartered Institute of Personnel Development rightly says that employers can and should make a difference by building a relationship with young people from school to labour-market entry. What are the Government doing to support the institute in its campaign to engage more employers? On the demand side, it is really a question of whether the Government have done enough to rationalise the myriad relatively small-scale funded interventions. I know that the Local Government Association is keen that that should happen.

This debate has been a wonderful opportunity to work together in seeking common solutions, and I believe that it has gone a considerable way towards achieving that.