Youth Employment

Stephen Kerr Excerpts

Wednesday 6th December 2017 Westminster Hall

[Gillian Keegan]

I completely agree. I believe I am the only degree-level apprentice in the House—I have not found another one so far—so I know about this from personal experience.

[Stephen Kerr (Stirling) (Con)]

I congratulate my hon. Friend on securing this debate. Does she agree that for apprenticeships to be of a high quality there needs to be a vibrant partnership between business and higher education? In my constituency, Forth Valley College has developed a network of connections with local business and is delivering the talent and capabilities that businesses need to flourish and prosper.

[Gillian Keegan]

I completely agree that that is the best model.

I spent three years working in every part of the business that I started in, which was a car factory in Liverpool. In parallel I studied business management up to degree level. By the time I moved on to my next job in senior management at NatWest Bank, I had seven years’ work experience, a degree and no student debt. That is the ideal route into the workplace. It has many advantages, particularly for working-class kids such as I was.

I welcome the Government’s recognition of apprenticeships as they are a great way to get into work and learn about business. Since 2010, 3 million apprenticeships are now available, with a target of 3 million more by 2020. That is a significant achievement, but it is not about numbers. It is the good quality training and skills that work for both the employee and employer that are key.

As my hon. Friend the Member for Stirling (Stephen Kerr) implied, colleges, universities and business are developing successful collaborative relationships across the country. Chichester College—a college of further education —has achieved that with more than 25,000 apprentices who have passed through its doors, and its success continues, with increased participation year on year.

--- Later in debate ---

[Mhairi Black]

I genuinely appreciate the hon. Lady’s point, but if she is suggesting that all young people benefit from zero-hours contracts, she is on a different planet. If that is not what she is saying, that is fine. That kind of overly positive attitude towards zero-hours contracts is something that we would read in a Tory party briefing, rather than any other briefing.

I suspect that the Government’s response to any criticism during this debate will be to say that the number of young people not in education, employment or training has been slowly falling—magic! We could say, “Well done,” welcome the fall and simply leave it at that, but like all things in life the situation is more complicated than that. That kind of argument completely ignores the quality of the work. Patting ourselves on the back about the falling numbers is all well and good, but if they are falling because people are working in insecure jobs that do not last long, is it really worth celebrating? If the Government have lowered those figures by pushing people into destitution and poverty—that is my experience since I was elected—is that really something to celebrate? That is not to mention the pitiful minimum wage, which my hon. Friend the Member for Glasgow East (David Linden) talked about, which starts at £4.05 for those under the age of 18. I do not see how anyone can afford to run a household on £4.05 an hour, especially if we consider the fact that the Government have seen fit to take away housing benefit from 18 to 21-year-olds.

Organisations such as the Resolution Foundation are reporting that the Government’s tax and social security policies will drive the biggest increase in inequality since Thatcher. I know that the Government greatly admire that woman, but perhaps they will look past their ideological nostalgia and look again at how they achieved those falling numbers.

The Government could consider following the lead of the Scottish Government, who achieved their target of reducing youth unemployment by 40% four years ahead of schedule. Going further, the Scottish Government will introduce a jobs grant to help even more 16 to 24-year-olds into work. Funnily enough, I highly recommend the Scottish Government’s work, given that Scotland has the lowest youth unemployment in the UK and one of the best youth employment rates in the whole of Europe.

[Stephen Kerr]

Will the hon. Lady give way?

[Mhairi Black]

I am coming to my concluding remarks.

The Government could consider following the lead of Renfrewshire Council, in the area I represent. Following the implementation of its “Invest in Renfrewshire” scheme, youth unemployment fell by more than 80%. I have met some of the people who have reaped the benefits of that scheme. It has motivated nearly 850 local employers to support young unemployed people and has stimulated job creation, taking Renfrewshire from being the sixth- worst local authority area in Scotland for youth employment to being the fourth best. The hon. Member for Stirling (Stephen Kerr) mentioned the importance of working with business and working outwith the community.

I mention those success stories not for the sake of petty political point scoring. Surely any decent Government should listen to constructive criticism and look for solutions. The reality is that young people leaving university have huge debts and have to take on insecure and unskilled work. They face wage stagnation like we have never known—literally the worst in more than 200 years —as well as the huge uncertainty of Brexit and an impossible-to-reach housing ladder. After all these years of watching austerity push people—particularly the young, the disabled and women—towards food banks and into poverty, surely it is time to reconsider this regime and look at other solutions.

--- Later in debate ---

[Rachel Maclean]

I completely accept the hon. Lady’s point. We have a picture of much lower employment across the country, including in her constituency. The Select Committee on Business, Energy and Industrial Strategy is specifically considering cases of exploitation.

[Stephen Kerr]

Is my hon. Friend looking forward to the Government’s formal response to the Matthew Taylor report, which we hope will go some way towards ironing out some of the inequities that might exist in the issues raised by the hon. Member for Paisley and Renfrewshire South (Mhairi Black)?

[Rachel Maclean]

Yes, and I thank my hon. Friend for reminding me about the absolutely brilliant work that is being done. This Government banned exploitative zero-hours contracts that prevent people from taking on other work, so now such contracts can be a solution, although I still recognise that they should not be forced on people or be the only option. We want more opportunities across the board for people of all ages.

I will finish by bringing to the House’s attention another positive story that I heard from my Jobcentre Plus office in Redditch. My constituent, who was under the local authority care system, attended her universal credit appointment and was asked by the work coach why she was making a claim. She said that she desperately needed to get a job; she was not happy in her care home and she needed to earn to move on. The work coach explained that she would not be entitled to universal credit because the local authority was responsible for her until her 18th birthday, but that the jobcentre would help by looking over her CV and advising her about job search sites. At the time there was a provider in the office with whom the work coach worked closely. They discussed what the provider could offer and how people could be helped into work.

Redditch Jobcentre Plus has a very high success rate for customers getting training through the provider, the Training Academy. The work coach took my constituent there to introduce her personally and to explain that she was only 16. The contact at the provider asked if he could help my constituent in any way and invited her to enrol at the academy the following day. That day, the work coach received an email to say that the provider had secured an interview on the same day for my constituent, closely followed by an email with a photograph of her holding up a plaque stating, “I got the job”. What a fantastic result for her: she went from being told that she would not be entitled to any universal credit, to securing full-time employment within two days. I have many more stories, but that is a fantastic example of how universal credit is helping young people into employment when provided with a package of full support, as is the case in Redditch.

--- Later in debate ---

[Luke Graham]

Our issue will be a devolved one, but to be fair to the Scottish Government, they are introducing incentives such as the recruitment incentive, which provides up to £4,000 to employers to help young people get rewarded for some of the work they are doing. On the specific point about work experience, employers need to work with the young person’s educational establishment to ensure that they are not just getting free labour and that true work experience is being gained; otherwise, as is sometimes said, some get the work and others get the experience.

As I was saying, young people raise the issue of the range of jobs available and other obstacles in the recruitment process. Meanwhile, employers tell me about the lack of suitable qualifications and work ethic as reasons that they do not hire young people locally. Government have a significant role to play here, as do MPs and MSPs. We must build a bridge between the two groups to improve opportunities for our communities and to progress young people’s development.

The key to such progress, as in so many areas, is education. I have already mentioned the successes of apprenticeships and the impact that such schemes have had on youth employment. In Scotland we have consistently created about 26,000 starts per year since 2011-12.

[Stephen Kerr]

Does my hon. Friend agree that there is no difference in value in a young school leaver going into work, college or university? Perhaps we have spent too long putting too much emphasis on university as a higher route, rather than looking at all those options as having equal value.

[Luke Graham]

I could not agree more with my hon. Friend and I will develop that point shortly.

That figure of 26,000 starts per year is some credit to the Scottish Government—it is a strong result—but I have concerns about higher education. Only 8% of Scottish 18-year-olds from the most deprived areas enter university, compared with 17% in England, 15% in Wales and 14% in Northern Ireland. Eighteen-year-olds from deprived areas in Scotland are therefore significantly less likely to have the opportunity to attend university than those of the same age anywhere else in the United Kingdom.

Education is, of course, devolved in Scotland, but the existing policy of free tuition fees is clearly not delivering for the most deprived in my constituency. Furthermore, in order to pay for the free university tuition fees, since coming to power the Scottish National party Administration in Edinburgh has cut about 150,000 college places in Scotland, further denying people another route to education. That is a great shame, especially when the staff of colleges such as Forth Valley in my constituency are working so hard to provide opportunities and to adjust to the challenges of lifelong learning.

Academic education and vocational training are not the only answers to youth unemployment. We need more initiatives to improve social capital. In areas of deprivation, young people face not only material shortcomings, but a shortfall in social capital. That means that the boy or girl born on the council scheme does not have the connections to get the work experience that they desire. Those from a workless household do not always have the chance or guide to show them not just what they are, but what they could be. For too many, their background and birth deny them the freedom to pursue their true aspiration and calling. That is why I welcome the Government’s groundbreaking TUC-CBI national retraining scheme, which provides opportunities and skills throughout life. The scheme does not apply in Scotland, but I gently remind the Minister that he is a Minister for the whole of the United Kingdom, and I know that my constituents would welcome the expansion of the scheme to Scotland and, specifically, my constituency.

The UK unemployment rate is lower than most, but the higher average youth unemployment rate in Scotland, and in my constituency, shows that current policies are not as effective as they could be. By recognising this, I hope that colleagues across the House and in the devolved Administration can work constructively and creatively to tackle this challenge and to ensure that young people have the opportunities they deserve.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

It is a pleasure to serve under your chairmanship this morning, Mrs Moon. I congratulate my hon. Friend the Member for Chichester (Gillian Keegan) on securing the debate.

Youth employment in the United Kingdom is indeed a good news story. The overall picture for employment is good, with 32.06 million people in work, reflecting an employment rate of 75%, which is the highest for four decades. Since 2010, the Conservatives—not alone but in partnership with industry—have delivered a staggering 3 million more jobs, giving more people the dignity of work and the security of a pay packet, which may be an old-fashioned term these days. At the same time, the Conservatives have taken millions out of tax altogether, and they have created and increased the living wage.

Many of the beneficiaries are our young people. Since 2010, the number of young people out of work has gone down by more than 400,000. That is a not insignificant figure. In my constituency, youth unemployment has more than halved, from 825 in 2010 to 370 in 2017. For those among us who are not mathematicians, that is a fall of 455 young people. That has to be welcomed, but there are still challenges. We have to focus on those 455 and get them on that ladder to success.

The number of apprenticeships is at record levels, with more to come. New, modern apprenticeship schemes are in place throughout the UK, although there are variations. We are giving people the skills to thrive in a new economy, by launching a partnership of the Government, the CBI and the TUC. As my hon. Friend the Member for Chichester mentioned, we need to try to push that throughout the United Kingdom, and Scotland would welcome that way forward.

Manufacturing growth is at a four-year high—the highest since 2013—and that brings job opportunities for our young people. Despite the growth in manufacturing, the Chancellor plans to invest £31 billion to further rejuvenate productivity. That figure includes an additional £8 billion, aimed primarily at key areas of housing, transport, research and, perhaps more importantly, digital communications, which is our future. In addition to improving productivity, new jobs for young people will be secured by this forward-thinking investment. The industrial strategy is brand-new but it will move forward, and as it gains traction, it will also be a player in securing youth employment.

On education, there are more than 1.9 million pupils in “good” or “outstanding” schools, which lead to better employment opportunities, although I note, sadly, that although Scotland used to have an education system that was the envy of the world, there is still work to do to revive Scotland’s education. The Government are on the case and I am sure that they will succeed, as education is absolutely vital.

However, despite the slashing of 150,000 places, Scottish colleges are doing extremely well. They are working well in partnerships with industry. In my area, Ayrshire colleges have worked well with the aeronautics industry around Prestwick airport, which is in a neighbouring constituency. They supply the young people for apprenticeships in the aviation or avionics industries.

More young people from disadvantaged backgrounds are attending university; Scotland still has some way to go on that, but it is pushing forward in that area. Many of those young people are the first in their family to secure a degree, which opens up new opportunities for them. My youngest daughter is among them—how proud I was on the day that she received a degree.

The number of children in workless households is at a 20-year low. That must be applauded, because it means that children see the opportunities and benefits that hard work brings to that household. They can take that opportunity forward in their own lives.

[Stephen Kerr]

Does my hon. Friend agree that perhaps there should be some kind of celebration associated with the completion of an apprenticeship, on the same scale as a graduation?

[Bill Grant]

Yes—as a late starter at school, I think we need to celebrate the success of those in apprenticeships. I left school with zero qualifications, but I find myself speaking in Westminster. The journey can be a bit tougher, but I would welcome that sort of initiative.

What I am setting out are not promises or pledges on a political platform or pamphlet, but the facts, and the policy successes of this Conservative Government—a Government who have ensured, and will continue to ensure, that every child or young person in the United Kingdom has the opportunity to get on in life, no matter their background.

--- Later in debate ---

[David Linden]

I am grateful to the hon. Gentleman for that intervention. I will come back to education, which is important.

I want to touch on apprenticeships. I am very proud that the SNP Scottish Government are delivering 30,000 apprenticeships each year—I should probably declare an interest as I am a product of that—and I pay tribute to them for that. However, we must pay people who do apprenticeships a real living wage. I was very disappointed that, in the Budget two weeks ago, the national minimum wage for apprentices went from £3.50—which is pretty pitiful—to £3.70. I appreciate that not every company will pay that basic rate, but it is pretty disgraceful. Members have mentioned the national living wage. I am afraid that the national living wage that the UK Government talk about is a con trick, because it does not apply to under-25s. I am more than happy to give way to anyone who wants to correct that. If we are genuinely serious about building a country that works for everyone, it has to work for under-25s, too. I very much hope that the Minister will feed that back.

[Stephen Kerr]

Does the hon. Gentleman think the levy should be used to contribute to apprentices’ wages?

[David Linden]

Not necessarily. We need to understand that a fair day’s work deserves a fair day’s pay. I am not sure that we should take that from the levy. If we are serious about treating people equally, we need to do so when it comes to pay, too.

I want to pay tribute to one of the colleges in my constituency. The hon. Member for Stirling (Stephen Kerr) mentioned that we need to recognise that there is a role for apprenticeships. I tend to take the view that if your pipes burst at home, you do not necessarily want a lawyer or an accountant; you want a plumber. Sometimes I think that Governments of all colours have been a bit too obsessed with the idea of just churning out people with university degrees. It is important to understand that we have a diverse economy. That is why I am glad to commend Glasgow Kelvin College, which has successfully invested more in graduate-level apprentices.

The hon. Member for Ochil and South Perthshire mentioned colleges. The reality is that the SNP Scottish Government have stuck to their manifesto commitment to provide 116,000 college places; I very much welcome that. On the number of people from deprived backgrounds who go on to university, UCAS figures show that, despite a small decrease in the number of acceptances among people from the 60% most deprived backgrounds, the number of acceptances is still 3% higher than it was in 2015. I very much commend that.

I am conscious of the time—I certainly did not intend to speak for this long—so I will close by congratulating the hon. Member for Chichester on securing this excellent debate. I hope that this is not the end of the conversation about how we help youth employment.

--- Later in debate ---

[The Minister for Employment (Damian Hinds)]

What a great pleasure it is to see you once again in the Chair in Westminster Hall, Mrs Moon. I congratulate my constituency neighbour, my hon. Friend the Member for Chichester (Gillian Keegan), on bringing this important debate to Westminster Hall. I know how important youth employment is to her, and it is important for us to have opportunities to debate it. We are all grateful to her. That is reflected in the attendance—we have had eight full speeches and this is the ninth. Seventeen Members have taken part in the debate, reflecting its importance. I also welcome the opportunity to set out the targeted support and reforms to vocational education we are implementing to give every young person the best start—an ambition we will achieve only with the help of employers large and small. We need businesses to be prepared to take a chance and offer more young people, whatever their background, valuable work experience and vocational training.

We have already made significant progress on youth unemployment. As my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) reminded us, youth unemployment is down by 422,000 since 2010. Youth unemployment is now at a record low: just 4.8% of under-25s are both unemployed and not in full-time education, and the UK now has the second-highest youth employment rate in the G7.

My hon. Friend the Member for Chichester reminded us of the reality of youth unemployment in some other countries, using her experience from Spain as an example. Around one in 10 16 to 24-year-olds are not in employment, education or training. While some of those have actively made a decision to take some time out before starting a career, others struggle to overcome complex barriers and multiple setbacks or have had their expectations and ambitions damaged, in turn damaging their confidence. The Government are committed to encouraging young people to be in education, training or employment and giving them the chance to progress and achieve. That is critical if we are to improve productivity, promote intergenerational fairness and tackle poverty and disadvantage.

The right support in school is critical, and if young people are to make the best choices at school, good advice is essential. It is important to widen children’s expectations, and broaden their understanding of the range of jobs and career opportunities available. My hon. Friend the Member for Ochil and South Perthshire (Luke Graham) spoke about the importance of social capital, and if there is an absence of that, the role of the school becomes even more important when trying to fill that gap. My right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) spoke about the importance of getting companies and industry into schools to present their opportunities directly, and I could not agree with him more. Some industry programmes, such as Feeding Britain’s Future, seek to widen people’s understanding of the range of careers in those industries, and STEM ambassadors talk about where people can get to if they knuckle down and do their maths and physics, including things like engineering, an apprenticeship or a degree.

To help young people make decisions about their future, we have introduced Jobcentre Plus support for schools. Working in partnership with the Careers & Enterprise Company and professional careers advisers, Jobcentre Plus advisers in schools help young people in a variety of ways. They set up work experience opportunities, offer advice on the local labour market, CV writing and interview techniques, and promote vocational routes into employment. We are also reforming the post-16 skills system and introducing T-levels. Employers want young people to have better vocational skills, and we want everyone to recognise that a technical education is as valuable as the traditional academic route for a successful career. We must keep pace if we are to drive the benefits to the UK economy: an estimated 1.2 million new technical and digitally skilled people are needed by 2022 if we are to compete globally. The Government are embarking on a major reform of the post-16 skills system in England, focusing particularly on technical education and lifelong learning.

My hon. Friend the Member for Chichester spoke of the high reputation of Chichester College, of which I am aware. She also spoke about her own experience, and what a great illustration her story is of where an apprenticeship can take someone. We have invested more in apprenticeships than any previous Government, and by 2020 we will have increased annual apprenticeship funding in England to £2.45 billion—double what it was in 2010. There have been 3.5 million apprenticeship starts of all ages since May 2010, and 1.1 million apprenticeship starts in England since May 2015.

My hon. Friend the Member for Henley (John Howell) spoke about the importance of quality apprenticeships. He is absolutely right, and the Institute for Apprenticeships is important in that regard. We are also improving access to apprenticeships for those who are disadvantaged or who have a learning difficulty, health condition or disability.

[Stephen Kerr]

FES in Stirling has set up its own training academy and is working in partnership with Forth Valley College. What more can the Government do to encourage more businesses to take that progressive attitude to investing in their talent?

[Damian Hinds]

That is something we are constantly engaged with, and Members of Parliament can play an important role. More and more companies are doing such things. With employment at its current level, and unemployment at its lowest level since 1975—some people in this room were not born the last time unemployment was lower than it is now—it is a competitive market for talent, and more and more companies are seeing that part of having the competitive edge is exactly about investing further and doing bold things with recruitment and development.

As my hon. Friend the Member for Ochil and South Perthshire reminded us, too many young people leave school without a place in further education or training, or an apprenticeship or job go to. To tackle that head on, in April we introduced a new programme of intensive support for unemployed 18 to 21-year-olds who were making a claim to universal credit full service. The programme starts with a 71-hour curriculum of workshops and exercises that encourages them to think more broadly about their skills and job goals. It helps them to identify any training they need, and supports them to improve their job search, job application and interview skills.

Young people also receive intensive work-focused coaching, and referral to additional support drawn from a wide variety of locally available provision. That provision is tailored to address specific needs and can include mental health support, employability skills, basic skills training in maths, English and IT, work-related skills training, mentoring, and a short work experience opportunity. We anticipate that many young people who receive that valuable intensive support will move quickly into further education, vocational training, an apprenticeship, or a job. Those who are still unemployed after five months on that programme will have an extended stock-take assessment to review their learning and progress, and identify additional barriers to work that need to be addressed quickly. At six months, if the individuals remain unemployed, they will be offered a sector-based work academy placement, which is a short period of vocational training, and work experience in a sector with a high number of vacancies, or encouraged to take up a traineeship. Every 18 to 21-year-old on the programme who does not take up work-related training will be offered a three-month work experience placement to help them achieve their job goals.

Universal credit also offers, for the first time, in-work support for young people on a low income to help them progress in work. Young people are better off in work under universal credit. Most young people were not entitled to claim working tax credit until they were 25, but under universal credit they continue to receive benefits while in work and on a low income.

The rate of the national minimum wage for young people is a balance. It is, of course, important to ensure that people are properly remunerated, but we must also protect their employment prospects. The rate for people aged 18 to 24 has risen by between 7% and 8% since 2015, and from April 2018 the apprenticeship rate will be at a record high in real terms. Overall, the national living wage—such a key reform—has meant that the lowest-earning 5% of the population have recently had the biggest rise in their annual incomes since records began.

The hon. Member for Wirral West (Margaret Greenwood) asked about our use of texts and other forms of communication. Yes, we absolutely use those things in jobcentres these days. It is an important part of our communication.

As our industrial strategy set out, we need to boost productivity and earning power across the country, improve the quality of work and ensure that everyone has the right skills to progress. As I hope my hon. Friend the Member for Chichester will agree, when businesses give a young person a chance of employment or the valuable opportunity of work experience, it is not only the job-specific skills that they gain that make a difference. Through work experience, young people broaden their horizons, learn how to work with others and gain confidence. That in itself can be instrumental in changing their job opportunities and life chances.

Employers say that one key reason why they do not employ young people is a lack of work experience, so getting that experience is important. If any Member has difficulty with putting local employers in touch with jobcentres and creating those work experience placements, they should get in touch with me and I will help to facilitate that. This is such an important subject, and I thank my hon. Friend for securing this debate. This is a partnership approach between the Government, MPs and educational employers.