Youth Unemployment

Robert Halfon Excerpts

Wednesday 22nd June 2011 Westminster Hall

[Robert Halfon (Harlow) (Con)]

It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on his thoughtful speech, even if I did not agree with all of it, and on securing the debate.

This is an important debate, because today is vocational qualifications day and apprentices throughout the country are being congratulated on their achievements. In my maiden speech, I said:

“In Essex, nearly 4,000 young people are not in employment, education or training, and Harlow is one of the worst-affected towns…If we give young people the necessary skills and training, we give them opportunities and jobs for the future.”—[Official Report, 2 June 2011; Vol. 510, c. 488.]

The argument is about not just economic efficiency, but social justice. I want to talk about where youth unemployment is coming from, what the Government are doing and what more can be done.

In 2000, there were 600,000 16 to 24-year-olds who were not in employment, education or training. By 2010, there were well over 1 million and the figure remains at that level. This massive surge was not the by-product of the credit crunch—youth unemployment rose steadily throughout the past decade and the direct causes are well documented. We asked teachers to spread themselves too thinly, with too many competing priorities. Maths and English suffered, and half a million children left primary school unable to read or write. The Education Secretary has recently argued that too many soft qualifications crept in at GCSE and A-level, undermining academic rigour. The recent review led by Sir Richard Sykes, the former rector of Imperial college, concluded that many students were forced to take easier courses, to raise schools’ positions in league tables. One member of the review panel said that our current system is a “national disgrace”, because it encourages pupils to drop tough subjects such as science. The result is a skills deficit.

In Austria and Germany, one in four businesses offer apprenticeships to young people, but in England the figure is just one in 10. Why do only 28% of British workers qualify to become apprentices or gain technical skills, compared with 51% in France and 65% in Germany? What has gone so badly wrong in the UK that our skills level is so low? Our population is less skilled than that of France, Germany and the United States. As a result, we are 15% less productive than those countries. For example, construction has long represented about 10% of gross domestic product, but we have consistently imported much of that labour from Europe. The consequence has been a rootless, under-educated, jobless generation of graduates who do not have the right skills for our growth industries.

[Dr William McCrea (South Antrim) (DUP)]

Is it not true that, throughout the United Kingdom, we have given the impression that if a young person has not got a degree, they are not really a young person with great achievement? We have sent a lot of our young people to university to obtain a degree that has little relevance to working life. Therefore, do we not need to change that approach and say, “Listen, we need young people without a degree, but who are at least skilled and ready for the workplace”?

[Robert Halfon]

The hon. Gentleman is exactly right. I always find it astonishing that, when someone goes to university, it is regarded as something of great prestige—and, of course, it should be—but when someone does work experience or an apprenticeship, hardly anyone bats an eyelid. We must change the culture of skills and apprenticeships in our country.

[Mr Iain Wright]

The hon. Gentleman is making his argument in his usual thoughtful and considered manner, and I agree with virtually everything he is saying: for far too long in this country, we have had a culture of academic success but vocational failure. However, will not the changes to the English baccalaureate and the curriculum be a backward step? Is not the Secretary of State for Education embedding that negative culture, whereby academic equals success but vocational equals failure?

[Robert Halfon]

I thank the hon. Gentleman for his remarks, but I do not agree with them. As I will show later, we are gearing everything towards vocational training and apprenticeships.

I accept that the previous Government and many Opposition Members were concerned about and did their best to tackle youth unemployment. However, sometimes their policies were expensive and inefficient. The future jobs fund, which was mentioned by the hon. Members for Hartlepool (Mr Wright) and for Birmingham, Selly Oak, cost up to £6,500 per placement. Most placements were temporary six-month internships in the public sector. In comparison, the normal cost of finding work for a young person on the new deal was just £3,500 per job, which is better value for money.

Despite that, tens of thousands of young people who finished school were still on the dole a decade later. Although billions were spent on the new deal, around 100,000 of those who left school in the first term of the previous Government have never held a job. They are now in their 30s and have never worked in their lives. The future jobs fund and the new deal too often operated like a revolving hamster’s wheel back to benefits. People were shifted around and around but did not get anywhere. The future jobs fund was announced in 2009 and aimed to create 150,000 jobs in two years. By the end of the first year, fewer than 5,000 jobs had been created, which is 3% of the target. It just did not work. There were also problems with Train to Gain. Much of the training on Train to Gain was not actually training; it was bureaucratic assessments dressed up as training.

[Stephen Timms (East Ham) (Lab)]

The figure that the hon. Gentleman gave is a little bit misleading. Between October 2009 and January 2011, there were more than 90,000 starts thanks to the future jobs fund. Of course, the scheme did not run for the full two years, for reasons that we know about, but over the full period that it was in operation, a large number of young people got into work.

[Robert Halfon]

Yes, but the crucial thing is not just for someone to get initial work, but for them to stay in work. I hope that the Minister will announce later that our policies relate to giving people long-term jobs. The point is this: job creation schemes, however noble, will not break the poverty trap unless they give people new skills in real private sector jobs.

The Government’s skills strategy published last year sets out plans to refocus spending on apprenticeships and to make all vocational training free at the point of access, with costs repayable only once someone earns a decent salary. That will help many young people into training, especially single parents, people who have been made homeless, and ex-offenders. I strongly support the announcement that 250,000 new apprenticeships will be created over the next few years. I particularly support the establishment of 24 new university technical colleges, which are essentially pre-apprenticeship schools led by local employers.

In Harlow, we have applied for a UTC led by Harlow college. If we get it, that UTC will be a centre of excellence for engineering and journalism backed by local firms and Anglia Ruskin university. On top of that, I support the funding for 100,000 sponsored work experience placements for jobless 18 to 21-year olds. I hope that such policies will significantly reduce youth unemployment in the years ahead.

However, it is not just about national Government. In Parliament, I have often championed the pioneering wage-subsidy scheme run by Essex council and Harlow college. As I mention in early-day motion 1258, that scheme has boosted young apprentices in key growth industries, especially high-tech manufacturing. Essex council and Mr Dean Barclay have even helped to sponsor the apprentice in my Westminster office, Andy Huckle, who is combining a year in the House of Commons with a level 3 course in business administration. A few other MPs have taken on apprentices and I urge all hon. Members to do the same.

In Essex, that scheme is being taken to the next level by the Federation of Small Businesses, which has applied to the regional growth fund to sponsor 2,000 new apprentices, especially in the energy sector. That scheme will be similar to the targeted £2,500 wage subsidy proposed by the central business institute a few years ago. So despite the historic problem, a lot is being done to address the social injustice of young people who want to get on in life but cannot find a job.

Work experience and apprenticeships give young people a chance to see a busy workplace, and to make things happen in the real world. The hon. Member for Birmingham, Selly Oak mentioned the Prince’s Trust. As we speak, a young girl from the Prince’s Trust is doing some work experience with me. The Government must start to use their planning powers and their contracts to insist that there is a better uptake of apprenticeships in Britain. Harlow council is currently looking at ways of using planning law to require developers to employ young apprentices. In the same way, Essex council is exploring ways of putting clauses into contracts to boost apprenticeships for young people. The total value of public sector contracts is £175 billion a year. If even a fraction of those built in apprenticeships, it would make a huge dent in youth unemployment across the country.

The issue is not just about how to create job opportunities. Let us be honest: for too long apprenticeships have been seen as plan B if someone does not want to do A-levels, as the hon. Member for South Antrim (Dr McCrea) mentioned. That was the problem with the old technical schools of the past: attending them was seen as a lesser thing to do. That must be confronted, rather than swept under the carpet. The plans to enhance a level 3 apprenticeship to technician level will make a difference, but as I mentioned, we must give apprenticeships parity of esteem to make them more attractive to young people who are looking for work.

That is why at 3.30 pm today, in the Jubilee Room next door, I will launch a new apprentice card with the National Union of Students and businesses, who together have tens of thousands of apprentices on their books. The card has one simple aim: to give apprentices the same benefits as A-level and university students. I have worked for many months with the NUS and other organisations to establish a national society of apprentices. The card is the very first step towards such a scheme and it will give young apprentices discounts at restaurants, travel agents and high street stores, as well as access to free support services and legal advice. There will also be social events, mentoring, careers guidance and other planned benefits, including financial products such as interest-free overdrafts.

[Dr McCrea]

It is important to find out if the scheme about which the hon. Gentleman is talking is being rolled out throughout the United Kingdom or if it is just happening here on the mainland.

[Robert Halfon]

At the moment, it is an English apprentice card, but we hope to extend it as we slowly roll out the scheme. I urge the hon. Gentleman to come along to the launch this afternoon; he would be very welcome.

The effective rate of youth unemployment is devastating, and has been for the past decade. If we leverage Government contracts and planning, and boost the prestige of on-the-job learning through efforts such as the apprenticeship card, we will transform the lives of the 1 million young people who are out of work.

[Martin Caton (in the Chair)]

Order. I want the winding-up speeches to start at 10.40 am, and I have five people indicating that they want to speak—so, more brevity, more speakers.