Youth Unemployment (Mitcham and Morden)

Siobhain McDonagh Excerpts

Wednesday 13th July 2011 Westminster Hall

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I am delighted to have been given the chance to speak in Westminster Hall, but I am sorry about the circumstances that led to my asking for this debate.

In my constituency of Mitcham and Morden, which the Minister will know well, the number of unemployed jobseeker’s allowance claimants has reached 2,776. From the moment when I was elected in 1997, it looked as though unemployment had slipped off the agenda, because it fell during my first 12 years as a Member. In April 1997, weeks before I was elected, the unemployment rate in Mitcham and Morden was 5.4%. Even in April 2009, at the height of the recession, it was only 3.7%. However, it is now back up to 5.2%.

The effect of unemployment is perhaps greatest on our young people. If they cannot get work early in life and learn the discipline of the workplace, it becomes harder to find work. For older people, gaps in a CV can make life difficult when applying for jobs, but for young people it is much worse. After a decade during which we invested enormously in education, exam grades have risen and young people’s aspirations are high, but their aspirations cannot be met.

Nationally, unemployment among 16 to 24-year-olds has risen to 895,000. In Mitcham and Morden, the unemployment rate for the under-24s has shot up to 11.6% in the past year. Today, only 39 constituencies have a worse ratio of vacancies to JSA claimants than in my constituency. In May, our local jobcentre had only 124 jobs.

The scarcity of jobs has made life more difficult for young people looking for work. They have the disadvantage of lacking experience. We must not allow a return to the 1980s, when a whole generation of young people lost out and many drifted into a life of benefit dependency, which affected not only them but their children. We still feel the social effects of that period of long-term unemployment.

For many communities, the jobs have returned, but on some estates a culture of worklessness has taken hold. A generation on, we are still dealing with the consequences of young people having been unemployed in the 1980s—I say, never again. In the 1980s, youth unemployment continued to rise for four years after the recession was over. I want to stop another generation of young people in Mitcham and Morden having to go through that.

When the coalition Government were elected, their first steps were like a war against young people: they increased student fees; they abolished the education maintenance allowance; and they slashed the future jobs fund. It is true that youth unemployment across the country rose as a direct consequence of the recession, but a year ago it started to fall, and many believed that the future jobs fund was helping unemployed young people to gain opportunities that would help them into work.

Just over a year ago, however, the Prime Minister described the future jobs fund as a “good scheme”, and the Liberal Democrat spokesperson said that

“more help is needed for young people, not less.”

It is baffling that the fund has been scrapped. Last summer, I met a group of young people who had enrolled through the future jobs fund and who were getting good work experience at a local charity, the Commonside community development trust. I wanted to hear about their experience.

There were nine youngsters on the scheme—one dropped out, but the others had a better time. They were given a range of things to do, from helping to run a community centre to dealing with older people in the lunch club and undertaking basic admin duties. I am told that, a year on, four are now in work, and three have gone back into education. I see one of those young people regularly at my advice surgery every Friday—not, I hasten to add, because he needs to see me about problems, but because he has a full-time job on the ground floor of the same council building. His name is Kyle Bryant, and he believes that the future jobs fund helped him to get his current job. It certainly showed that he was willing, and his experience there gave him a better CV.

I take this opportunity to congratulate Kyle and his fellow graduates of Commonside’s future jobs fund programme. They did the right thing by helping out a worthwhile local charity, and getting some good experience, and many are now reaping the rewards. I am sure that other hon. Members have similar tales, but for me, meeting young people like Kyle brought home just how difficult it is for young people who cannot find work to get the necessary experience without extra help. Now that the future jobs fund has been scrapped, the opportunity to gain good experience is even harder to come by.

Internships have been seen as a way to get ahead. However, the Deputy Prime Minister rightly criticised the way in which internships often favour those who already have good connections. Indeed, he has used privileged access, through his family, to secure top-notch work experience. However, that is not an option for many in Mitcham and Morden. We tend not to have many people with connections to top jobs in the public sector, let alone to senior bankers or business people. I therefore wondered what sort of role I might play.

In some respects, Members of Parliament are the hub of their community. We have no real power on our own and we do not have access to public funds, but we know our constituencies and the people and businesses that make them tick. I therefore decided to facilitate a work experience programme in Mitcham and Morden for our unemployed young people. The idea came after chatting with the Stranks of Strank Roofing, a successful local firm that I know through the charities that it supports and through its sponsorship of our local football team, AFC Wimbledon. I hope, Mr Gray, that you will not stop me congratulating the team on getting into the Football League after only nine years.

[Mr James Gray (in the Chair)]

They are no longer unemployed.

[Siobhain McDonagh]

They were not unemployed before, but they are now in the full-time league.

Irene and Paul Strank told me that they wanted to help young people who could not find work, but that they found Government schemes a little too prescriptive and bureaucratic. For instance, the new Government work experience scheme that began in January requires employers to sign service level agreements, complete health and safety questionnaires, and to receive visits from the jobcentre. Those requirements often put off people such as the Stranks.

Anyone who has offered work experience to schoolchildren—many Members do so, including me—will know what a hassle it can be. I perfectly understand why employers are reluctant to participate in Government schemes. However, the Stranks were sure that other firms would feel the same as they did and would want to train young people—if they were any good, there might be a job at the end of it—but without the hassle, the form-filling or the sense of being monitored by the authorities.

I therefore decided to contact every local business and voluntary group in Mitcham and Morden, and a few others just outside our borders, to see whether they would offer work experience for a couple of months to unemployed youngsters from my constituency. Thanks to Anna in my office and some amazing volunteers from my local Labour party, particularly Ross Garrod, who has been trying to build up a new set of skills after leaving university, I have been able to convince nearly 40 organisations to take on at least one young person.

These organisations cover a wide spectrum, and include many organisations that I thought would not have wanted to become involved. Indeed, the Minister will know some of the organisations at first hand; they include the premium hotel Cannizaro House and Cosmopolitan, the women’s magazine—although he probably knows less about the latter. The youngsters have opportunities from retail to tyre fitting, and from schools to legal firms. The Elective Orthopaedic Centre has offered two placements for people thinking about applying to medical school, but who have no medical contacts in their families. That is extremely exciting for the people in my constituency. Shelley Engineering, a local architectural metal work company, is a family firm that employs 20 people. It said that it is desperately looking for the right young person, and if it finds one it will happily award an apprenticeship. In short, there is something for a wide range of abilities and interests.

I also contacted all the companies that infamously auctioned internships to raise funds for the Conservative party. I explained that not everyone in Mitcham and Morden could afford to bid thousands of pounds for the sorts of privileged opportunities that seemed to be available to Conservative sponsors. I said that, as work experience with them was so prestigious, it would be nice if they were to spread the opportunities around. Unfortunately—perhaps it was not a great surprise—those firms would not join in. I imagine that the kind of people who would auction their best openings to raise money for the Tories would want to restrict them to privileged people like themselves. That only served to convince me more of the need to press ahead with creating opportunities for my young constituents.

After I received promises of up to 50 placements, I put together a brochure and sent it to every household in Mitcham and Morden that included someone under the age of 25. I would like to thank Rob Geleit, a Labour party member from Epsom with design skills, for laying out the brochure, the Communication Workers Union for agreeing to print it and Asda for agreeing to post it. I would also like to thank Liz Sherwood, a local Labour party member, who has taken early retirement from Camden council, for agreeing to act as mentor for both the young people and the businesses. A couple of weekends ago, she met more than 23 potential applicants and helped them write letters and e-mails to potential employers. It was a heart-warming experience to see the mums who came in with children who had learning difficulties and the women in their 40s who came for a hand to get a work experience job.

I also thank my local jobcentre for its advice and its willingness to give this project a go. I must confess that a couple of years ago I called a debate here to complain about how unhelpful it was, so I was nervous about how it would respond to me this time. I was concerned that it would insist on a level of bureaucracy that would put off potential providers, or that it would tell our young people that if they went on a placement they would lose their benefits. Nothing could have been further from the truth, and the jobcentre has been amazingly accommodating—perhaps that is because our work experience scheme is so much more flexible than the Government’s. Obviously, even while young people are on their placements, they can still be looking for work and be available to start at a moment’s notice, and no organisation wants to be seen as a bad boss.

The jobcentre has not had the reputation for being the most enterprising organisation. However, any such criticism could not have been further from the truth. Ailsa Evans, in particular, was both helpful and flexible. Each work experience placement can last anything from eight to 12 weeks and cover a range of hours. In essence, I have been a facilitator between organisations and young people, but they come to their own arrangements, and Ms Evans has been happy with that.

The brochures have now been delivered and there have been hundreds of applications. Most organisations have told me that they have had a positive response. Merton chamber of commerce, for instance, has had more than 40 applications. Several placements have already begun, and later this year I plan to host a party for everyone who has taken part—host organisations and young people.

There has been a buzz about the scheme that has taken me by surprise. One potential applicant, Sambavi, applied for one of the medical positions. It is not the sort of opportunity that often arises for people from places such as Mitcham, where he lives. He said:

“Thank you for your Work Experience booklet. I have been spending the past 4 weeks trying to find work experience that is suitable for Medicine...I received your letter and booklet, earlier today, and I am very thankful.”

On the whole, the potential employers have also found the process worthwhile. Jeffrey Ward, the General Manager at Cannizaro House hotel said, “It’s great.” Nilmini Roelens of Roelens Solicitors said:

“We hope to accommodate at least two or three applicants over the summer and to provide the young people concerned with what I hope will be valuable insight into the work at a firm of solicitors. It may be that, from the two or three people we will have met, we can consider at least one for a longer term position at some point in the future.”

We have also had positive e-mails from Merton adult college, St Mark’s family centre, the Vine furniture project and the Ursuline high school.

The reason why I asked for this debate today is that I want to encourage more MPs to take a similar approach, especially in areas such as Mitcham and Morden, where youth unemployment is high and where there are few people who can find opportunities through their daddies or who can afford to enter auctions to support political parties. I recognise that many Members will need help on this, and I hope that the Department for Work and Pensions will be able to offer it.

It is a terrible mistake to have ended the future jobs fund and to have taken away opportunities for people like Kyle in Mitcham and Morden and elsewhere. I am concerned that any new scheme will be so bureaucratic and inflexible that few organisations will want to participate. I understand that Jobcentre Plus will run the scheme. Rather than being hands-off facilitators as I am, jobcentres will hold lists of potential employers and send work experience people to them.

From this summer, it will be mandatory for jobseekers to take placements, so even those who do not want a placement will be placed. I do not think that many people will want to take on an unwilling conscript for work experience. Moreover, as the work experience that is being foisted upon jobseekers could be for as little as just two weeks on the new Government programme, it is hard to see what anyone will get out of it.

In my own experience, such short placements often create more work than they save. An employer spends two weeks showing someone how to do a job, but by the time the jobseeker has learned how to do it, they have left. Then the employer themselves has all their own work to catch up on. Worst of all, though, the new Government programme suffers from exactly the same pitfalls of bureaucracy and inflexibility that the Stranks complained about. Participating employers will have to fill out service level agreements and health and safety questionnaires, and there will be visits from Jobcentre Plus-appointed employer advisers. Firms also have to provide a dedicated mentor or supervisor. As a result, small firms, which make up the majority of employers in my constituency, are unlikely to want to participate, and the quality of work is also likely to be compromised. Those that want to participate will very much be in a minority. We need high quality organisations, big and small, offering a variety of opportunities to young people who want to find an internship, but who cannot afford it or do not have the right connections.

I am not saying that my scheme is perfect. It is not an alternative to investment in jobs or to the economic growth that we need to create jobs. Of course my party believes the coalition’s cuts are too soon and too hard, and that that will endanger jobs and growth. None the less, I hope that my model of flexibility, with MPs or other community leaders acting as a hub for local organisations and local people, will be looked at and learned from. I hope that this debate has been helpful for the Minister.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

It is a pleasure to serve under your chairmanship again, Mr Gray. It has been a frequent occurrence in recent times. I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this debate.

I will divide my remarks into two halves. First, I congratulate the hon. Lady on a project that is very big society, and exactly the kind of thing local MPs should be doing. She is right to describe our ability to open doors in constituencies, to secure involvement in community projects and to go places other individuals and groups perhaps cannot go. She has clearly done that in her constituency and I praise her for it. I will talk a bit more about that in a moment.

Much of the rest of what the hon. Lady said was complete hokum. She is rewriting history and misrepresenting some of the realities of our work. None the less, I praise her for her sincerity in calling this debate and for the work she is doing; it is absolutely right. I am delighted that Jobcentre Plus is working well with her, but that is no accident. It has specific instructions to do just that. In particular, she talks about the issue of two weeks versus eight. Under the previous Government, a jobseeker lost their benefits if they did work experience for more than two weeks. It was a crazy situation.

One of the first things I received on becoming a Minister was an e-mail from the mother of a young woman who said that her daughter had arranged a month’s work experience for herself with a local firm, but the Jobcentre Plus office had told her that if she did it she would lose her benefits. That is clearly a crazy situation, and one that we moved quickly to change. A jobseeker can now do work experience for up to eight weeks while on benefits. If they are moving from that eight weeks into employment or an apprenticeship, that programme can be extended to 12 weeks. Therefore, it is down to the policies of this Government that the hon. Lady can deliver her scheme. Under the previous Government, that would not have been the case. Those young people would have lost their benefits after two weeks.

[Siobhain McDonagh]

My scheme came about because the future jobs fund had been scrapped. The future jobs fund, for me, was the way forward. I was looking for an alternative and I came up with this idea; it does not replace the future jobs fund.

[Chris Grayling]

I will come back to that in a moment. The hon. Lady is right to say that it does not replace the future jobs fund; it is part of a package very different from what we had before. My point is that it would have been impossible for her to put together a scheme under the rules that operated under the previous Government. Her scheme is worth while and valuable and I commend her for it.

Let me give some context to the youth unemployment challenge. Youth unemployment today is lower than it was at the general election. The picture of youth unemployment has been building up over a decade. One of the myths is that it is a problem simply linked to recession. If we look at the trends in youth unemployment, we see that it began to rise in 2003 and the problem became more and more significant as the years went by. It was becoming a problem through good times as well as bad.

[Siobhain McDonagh]

Since the general election, youth unemployment in my constituency has risen, not fallen. The problems are greater now than they were before the general election.

--- Later in debate ---

[Siobhain McDonagh]

From my experience of my own constituency and of London as a whole, those contracts are so large that many of the small local organisations, such as the Commonside Community Development Trust, have been unable to get involved in the work programme, and yet they have the experience on the ground. What can the Minister do to ensure that those small local organisations get a look-in with that programme?

[Chris Grayling]

Of course, the whole structure of the work programme is designed to reward excellence. Any organisation that is really good at its job of getting people into work will find a willing entrée with the providers. A whole mix of organisations is involved—from the largest voluntary sector organisations, such as the Prince’s Trust, through to a walled garden project in Yorkshire. We have a whole mix of different organisations providing the support. What matters is what works and that we have solutions that deliver real options for young people, getting those who are unemployed—particularly the long-term unemployed—into the workplace. For me, that is the challenge.

I accept the hon. Lady’s analysis: that we have a problem, in that many young people are stranded and struggling and need to be given a helping hand into the workplace. I hope and believe that the mix of programmes we have put in place—increased numbers of apprenticeships and the work experience scheme, helped by big society projects such as hers, and the intense support provided through the work programme—will start to make a difference, and in a way that I must say is much more affordable to Government than the future jobs fund was. In addition, those programmes will steer young people to where the jobs really are: in the private sector businesses that represent our employment hope for the future.

I believe that that is the right approach. The hon. Lady and I share a commitment to tackling the problem of youth unemployment. We may not agree on all the solutions, but she should know that the Government are committed to solving that problem.