Youth Employment

Matt Hancock Excerpts

Tuesday 15th July 2014 Westminster Hall

[The Minister for Skills and Enterprise (Matthew Hancock)]

Of course there is no complacency, and one young person not in education, employment or training is one too many, but on whether youth unemployment is falling faster than overall unemployment, will the hon. Lady note that in her constituency the claimant count is down 21.6% since 2010 overall and down 26.8% among 18 to 24-year-olds, which contradicts her analysis?

[Pamela Nash]

Of course. I was going to come on to that point, but I appreciate that interventions have led me to it now. I welcome that decrease, but the figures are not yet at the levels seen before the downturn. I appreciate that the figures are below what they were when the Government took office, but they are not where they should be. As the Minister said, one young person unemployed is one person too many. We should talk about the issues and how we get every single person back to work.

In 2012—I appreciate that the figures have moved on, but it is the last full year for which we have figures—youth unemployment cost the Exchequer £4.8 billion. It is estimated that it cost the economy £10.7 billion in lost output, so the Government need to look at this issue. To be clear, the £4.8 billion is more than the Budget forecast for oil and gas revenue to the Government in 2014-15. Youth unemployment is costing the Government huge amounts, so it makes economic sense to get young people back to work as soon as possible. In my constituency—Government Members seem to have good knowledge of the figures for my constituency; they are well prepared this morning—youth unemployment is still at 8.5%, which is higher than the rate for Scotland and for the UK as a whole. Although it is lower than when the Government came to power, it is still nowhere near the level it was before the financial crisis.

Unemployment in Scotland has gone down, but the total number of JSA claimants in Scotland is 140,000, which is the same as the population of Dundee. As it is in the rest of the UK, the youth unemployment rate in Scotland is almost double the adult unemployment rate. I accept Government Members’ claim that it has gone down, but I worry about complacency, which cannot be acceptable when such a huge number of young people are unable to pursue their dreams and aspirations after so many years of austerity. The all-party group on youth unemployment, which I mentioned in my opening remarks, recently disclosed that the dole queue of young people in the UK, were they all to stand in a line, would reach from Edinburgh to London.

Youth is sometimes seen as an afterthought when we discuss employment, which should not be the case. Young people should be our first thought in tackling unemployment. We know from the research into long-term unemployment that its effect on young people can be not just immediate, but can scar for life. It can leave long-term issues that stay with that person throughout their life, be it in the workplace or at home.

As I have said in private meetings, youth unemployment is often seen as a political football. The debate is always a bit heated because there are Government Members who really want to tackle youth unemployment and have the same aims as us, but who have different views on how to tackle it. I could say that some of their views are right and some are wrong, but the point is that we have the same aim.

Although I said I would never start an all-party group, having seen how many there were when I became a parliamentarian four years ago, I was shocked that there was not an all-party group looking at youth unemployment. We need that vehicle for cross-party discussions on what is an extremely important issue that successive Governments have not tackled completely, so I am glad the group exists. Since its creation, we have worked with the National Union of Students on its inquiry into youth underemployment. We have met Ministers, shadow Ministers and representatives from the third sector and trade unions, which are also working on this issue. Over the summer we intend to draft a report in the hope that we can persuade all the parties to propose high-quality, sensible polices to tackle the issue when they draft their manifestos for next year’s general election.

In setting up the all-party group, I felt it was important to look at youth unemployment and youth as a whole, but it is important that we take away from the debate the point that not all young people are the same. Often, they are spoken about as a homogenous group who all have the same unemployment issues, but they are not the same. The hon. Member for Norwich North and I spoke last week at an event in Parliament launching the youth-friendly badge, which will allow businesses to show that they are helping young people get back to work. The event was chaired by an extremely capable young lady called Shakira. She impressed me, and I am sure she impressed the hon. Lady. Shakira has become a youth ambassador for the scheme, and she told us a bit about herself during her remarks. I noted a definite reaction in the room when she happened to mention that she was a mother, and that is not the first time I have seen that. At one of the all-party group’s events, a young man who spoke about employment issues mentioned that he was a dad. I do not think the reaction was judgmental; it was one of surprise.

We seem to put young people and youth unemployment in a box. We have made the huge mistake of sometimes speaking about them as a homogenous group, but the facts are that some young people are parents, some care for sick relatives, some are disabled, some have mental health issues, some have left school with few or no qualifications, some are graduates, some live in urban deprived zones and some live in rural areas. Any policy that the Government create has to look at a solution that can be tailored to meet the needs of all young people. In the same way, different areas of the country are not the same, and businesses are not the same. Will the Minister tell us exactly how the Government are moving forward in creating a solution to youth unemployment that is not one size fits all?

I want to speak about the benefits of work experience, how the Government’s policies have worked so far and how they might move forward. I am aware that as part of the Youth Contract, the Government offer work experience to young people, but my understanding is that it is not offered until 13 weeks after a claim has started. I hope the Minister will correct me if I am wrong, but why does it have to take 13 weeks before a young person is offered work experience? Surely it could be offered earlier. Part of the reason for that might be the lack of work experience roles available to the young people jobcentres aim to serve. In my local area, the jobcentre is struggling to provide the number of work experience placements that are needed, and I will come on to that.

Jobcentre work experience has been tainted by mandatory work activity. I appreciate that mandatory work activity is a different policy from work experience for young people, but the bad press has caused harm and reduced the number of businesses that want to give work experience. Mandatory work activity appeared to be a punishment, rather than a programme designed to get people back to work.

I take the opportunity to congratulate those companies that are offering work experience—as mentioned in recent press stories—including Barclays, which the all-party group has met with. Barclays has offered lots of placements to young people, which are invaluable in gaining workplace experience, confidence and skills. Such placements, however, are not easy to come by, as I know from my area. Some employers have told me that that is because they have not been asked before, and others have blamed the bad publicity about the mandatory work activity scheme.

Alongside that has been coverage of wealthy, connected young people who are able to get internships more easily than others, while some cannot afford to take them up—a perfect media class storm. That upsets me because, as a young person, I benefited greatly from a work experience placement in a Member of Parliament’s office. I managed to do it by working part time and taking on a part-time placement. Unpaid work experience does not have to be exploitative, but it does have to be extremely well managed.

To be clear, wherever exploitation exists it has to be stamped out. Work experience has to be high quality and voluntary. Internships and work experience placements should be paid where possible, and if not, modified in order to reach out to young people from all backgrounds. I am therefore starting a scheme in my constituency—as I am happy to hear other Members are doing—involving high-quality and voluntary placements that reaches out to not only large but small businesses. We will write to more than 400 businesses in my constituency over the summer, asking them to take part. The scheme is supported by a trade union, and we are working with a local Jobcentre Plus office. Will the Minister tell us what the Government are doing to improve access for all young people to good-quality work experience? What are jobcentres doing to reach out to local small businesses, as well as large ones, to create such placements?

I want to touch on the work of my local council in North Lanarkshire, but I was also pleased to hear about the work of Inverclyde council from my hon. Friend the Member for Inverclyde (Mr McKenzie). Labour-led North Lanarkshire council has created North Lanarkshire’s Working, which I highly recommend that the Minister look at, if he has not already done so—it is easily googleable. The scheme offers local businesses a 50% salary subsidy for six months when they take on someone unemployed. It is primarily but not solely focused on young people. It is working extraordinarily well, not only creating new, sustainable jobs but offering additional support to businesses, which is allowing them to grow. Is the Minister looking at local authority examples of such support for business growth? North Lanarkshire’s Working is creating permanent jobs that otherwise would not have existed.

I have concerns about apprentices and the recent cuts at the national Skills Funding Agency, which were reported only a few days ago in the Telegraph. I understand that there will be a 47% reduction in staff, including those working on the National Apprenticeship Service. Will the Minister confirm those figures? Why are almost half those staff being cut, when the Government’s rhetoric talks about improving and growing the apprenticeship scheme?

Lots of figures have been bandied about today, as usual when we are talking about employment and youth unemployment. They are often confusing because they come from different data, such as the claimant count or young people who are NEETs. One of the figures adding to the confusion is the number of young people who are sanctioned: more 18 to 24-year-olds are sanctioned than other unemployed people. I appreciate that that is not part of the Minister’s responsibilities, but I ask him to ask the relevant Department why more young people are sanctioned than those in other groups. I also ask that he gets his colleagues to address the point that people sanctioned long term are unlikely to go back to the jobcentre and sign on, so they are not included in the claimant figures.

Young people in my constituency and throughout the United Kingdom need more action to be taken to reduce youth unemployment. I hope to hear what the Minister will do to increase skills, employability and quality of life for our young people. Will he address the points I have made in his closing remarks, and take the relevant ones back to his colleagues in the Department for Work and Pensions?