Youth Unemployment

Rachel Reeves Excerpts

Wednesday 9th November 2011 Commons Chamber

[Lorely Burt]

I am sure we agree on the seriousness of the situation and all the different groups of young people who are affected. Unfortunately, the hon. Lady did not answer my question, but never mind.

[Rachel Reeves (Leeds West) (Lab)]

Will the hon. Lady give way?

[Lorely Burt]

I am sorry, but I will not give way.

Dealing with youth unemployment is incredibly hard, but the Opposition should not make political capital out of a relatively small increase in existing figures that are a legacy of their own figures.

[Rachel Reeves]

Will the hon. Lady give way?

[Lorely Burt]

I have only two minutes. I am very sorry.

The future jobs fund was well intentioned, but ineffective and expensive. It created new positions that were not, by definition, real jobs. It was so ineffective, in fact, that young people who were not on the programme fared better in getting real employment than those who were. It cost more than it saved, and failed to accomplish its targets. Now the Opposition are also calling for a bank levy to raise funds for a youth jobs fund. However, we have already introduced a bank levy, and it raises more each year than they managed to raise with their bankers’ bonus tax.

So what have we done for young unemployed people? We have concentrated on apprenticeships and getting people into real jobs. We have exceeded the targets in our apprenticeship scheme, with the provisional figures showing that the number of apprenticeships has grown by 58% across the UK and some areas showing growth of 198%. Perhaps the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) would like to welcome the 82% rise in apprenticeships in his constituency. The Work programme is designed to ensure that people can get out of a cycle of benefits and get back into work that pays. The jury is still out on the Work programme, but I am really hopeful that the work of specialist agencies, using their skills to find jobs for long-term unemployed individuals, will bear fruit.

I welcome the fact that Labour Members are bringing ideas to the table. As I said, I agree with some of them, but not all. We will listen and we will work with all colleagues in this House for a more prosperous future for all our constituents.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

It is right that we should have the chance to debate youth unemployment today, as our economy continues to flatline and unemployment is rising. It is just a shame that neither the Secretary of State for Work and Pensions nor a single member of the Treasury Front-Bench team has bothered to turn up. How complacent and out of touch this Government are.

The last time we debated the economy in this House was on the day when new figures showed that youth unemployment had reached a 17-year high, with 991,000 young people out of work. Next week we shall have an update on those numbers, but in the last few weeks the Government have done nothing to address the national youth unemployment crisis. It is almost two years since this country moved out of recession, yet the prospects for unemployment and youth unemployment are gloomier than ever. Labour has set out a five-point plan for jobs and growth, and called on the Government to introduce an alternative to their plans, which are hurting but not working. Businesses up and down the country are seeing demand hit. Young people out of work and facing trebled tuition fees are seeing the impact. Families struggling with high VAT and rising energy prices are feeling the impact. All are still waiting for a plan for jobs and growth from this Government. We are all waiting for some leadership from this out-of-touch Government on a jobs and growth plan internationally as well. Every day of waiting is a day wasted, with potential going untapped and opportunities squandered.

[Richard Graham]

I congratulate the hon. Lady on her appointment. Can she explain to me how it was that during the 13 years of Labour Government, 5,600 private sector jobs were destroyed in my constituency of Gloucester?

[Rachel Reeves]

What I do know is that in the hon. Gentleman’s constituency, as in mine, youth unemployment and long-term youth unemployment is going up on this Government’s watch.

There has rightly been concern from all parts of the House today about youth unemployment. My hon. Friend the Member for Hartlepool (Mr Wright), whose constituency has the highest youth unemployment in the country, rightly talked about the impact on his constituents. My hon. Friend the Member for North West Durham (Pat Glass) gave a passionate speech about youth unemployment and its effect in the north-east, as did my hon. Friend the Member for Wansbeck (Ian Lavery), who talked about people in his constituency being hammered by this Government’s policies. My hon. Friend the Member for West Bromwich West (Mr Bailey), in whose constituency long-term youth unemployment has risen by 106% in just nine months, was right to talk about the need for a national insurance holiday for small businesses. My hon. Friend the Member for Halton (Derek Twigg), in whose constituency long-term youth unemployment has gone up by 81% in nine months, raised the prospect of Royal Bank of Scotland bonuses of £500 million this year, with no tax on bank bonuses to fund youth jobs—a policy proposed by the Labour party.

[Mr Winnick]

We have heard many eloquent speeches about unemployment from our right hon. and hon. Friends, unlike those from Government Members. In the 10 constituencies in England with the highest jobless rate for 18 to 24-year-olds, eight are in the west midlands, and of those eight, six are in the black country. We should bear in mind the devastation that is occurring once again, as in the 1980s, in the west midlands and the black country.

[Rachel Reeves]

My hon. Friend is right to talk about the impact on his constituents. That is why we need a five-point plan for jobs and growth across the country, including the black country.

Unemployment is at a 17-year high and youth unemployment is almost 1 million. Despite the complacency on the Government Benches, the Government must do something to tackle the crisis. Long-term youth unemployment is at its highest for a generation, with 120,000 young people out of work for more than six months, up a staggering 64% since January. The number of young women who are long-term unemployed has risen to 37,500—the highest level in a generation. Whatever Government Members say, the number of young people in long-term unemployment was falling when the coalition Government were formed and it is increasing on their watch.

[Paul Maynard]

Will the hon. Lady tell me in how many constituencies, according to the figures she requested from the House of Commons Library, did long-term youth unemployment fall between May 2010 and September 2011? I, too, have the figures.

[Rachel Reeves]

The answer is in a very small minority of constituencies. In the hon. Gentleman’s constituency of Blackpool North and Cleveleys, long-term youth unemployment is up 233%, so enough of the complacency—he should be urging the Government into action rather than going along with their out-of-touch attitude.

Throughout the country, the number of young people looking for work has increased in 196 out of 202 local authorities since September last year—97% of local authorities have rising youth unemployment. Even in the Minister’s constituency of South Holland and the Deepings, 50 more young people have been looking for a job for more than six months, which is a 71% increase since January. I see the impact in my constituency of Leeds West day in, day out: 105 extra young people have been looking for work for more than six months, which is a 66% increase. Those numbers speak of a devastating impact on the lives of individuals and families, and they are the result of this out-of-touch Government’s complacency on youth unemployment.

Rising youth unemployment also shows that the Government’s plan A does not make economic sense. With unemployment at a 17-year high, inflation soaring and growth flatlining, the Government are set to borrow an extra £46 billion in this Parliament—and that is before the Office for Budget Responsibility comes up with its revised forecast on 29 November. We are all paying the price for the Government’s failure to get a grip on unemployment with higher Government borrowing and debt.

[Robert Halfon]

Will the hon. Lady answer the question that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) did not answer when I asked him? Why did youth unemployment rise by hundreds of thousands on her watch and under her Government despite all the taxpayers’ money that was spent on one scheme or another?

[Rachel Reeves]

With long-term youth unemployment up 140% in nine months, the hon. Gentleman should be asking questions of this Government rather than looking back to the past. The reality is that unemployment was falling when this Government came into power; now it is rising. That is the difference between a Labour Government and a Conservative-led Government.

The Government like to blame anyone but themselves—that seems to go for Government Back Benchers as well. First they blamed the snow, then they blamed the royal wedding, and now they blame the eurozone, but the truth is that the economy was flatlining and unemployment was rising before the eurozone crisis hit. They needed a plan for jobs and growth before the problems in the eurozone erupted, and they need to change course now more than ever. It is time they took responsibility for their actions.

In the wake of this national crisis of youth unemployment, what have the Government done? More than a year ago, their very first act was to abolish the future jobs fund, which was worse than doing nothing. The future jobs fund got 100,000 young people into work. Before the election, the Prime Minister said that that same future jobs fund was a good scheme. Why did he cancel it, and why did he cancel it before he had a replacement? The Work programme—the Government’s replacement—is no substitute for the future jobs fund. It has one third less funding and is making less of a difference to young people’s lives.

We need jobs and growth and young people need hope and opportunity. They deserve a plan that gets the economy moving and improves the prospects of those leaving school, college and university. That is why Labour has set out a five-point plan for jobs and growth. A £2 billion tax on bank bonuses will both support the construction industry and guarantee a job for 100,000 young people. What could be fairer than using some of the record bank bonuses to get young people back to work? Bringing forward long-term investment projects— which my hon. Friend the Member for North West Durham mentioned—utting VAT temporarily to give immediate help to our high streets and struggling families cutting VAT to 5% on home improvements, and a one-year national insurance holiday for every small firm taking on extra workers, will make a huge difference to small businesses and to the 991,000 young people who are out of work today. This is a five-point alternative that offers hope and unlocks opportunity. It is a five-point plan that would get young people back to work, get businesses hiring and get our economy growing. I urge hon. Members to support this action for the sake of the young people up and down this country who have been tossed on the scrap heap by this Government, just as they were in the 1980s and 1990s under Tory Governments of the past.

It is time to learn the lessons. We cannot afford the cost of spiralling unemployment, or of young people leaving school and college without the hope of getting a job. Call it what you will—plan A-plus, plan B or Labour’s five-point plan—but for the sake of 1 million young people waiting for action, I urge hon. Members to support the motion.