Youth Unemployment

Stephen Timms Excerpts

Wednesday 16th February 2011 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

We have had a good debate. From both sides of the House we have heard mounting alarm about the youth unemployment crisis that is battering every community in the land, not least, as we heard, those in Thurrock, Cardiff Central, Enfield North, East Hampshire and Nuneaton. We learned today that the number of unemployed young people has risen again and is perilously close to 1 million. The rate of unemployment among 16 to 24-year-olds, which came down in response to Government initiatives from the summer of 2009, rose sharply at the end of last year to the highest rate ever recorded. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) is right to underline the fact that the rate of unemployed new graduates is 20%. Not only is employment falling; young people are being deterred from education. My hon. Friend the Member for Wansbeck (Ian Lavery) was right; for young people, this is a perfect storm.

The Government should heed the warning, for example from Brendan Barber, that there

“is a real danger of losing another generation of young people”.

That warning is coming not just from Labour and the trade unions. David Blanchflower, professor of economics at Dartford college, New Hampshire, formerly of the Monetary Policy Committee puts it thus:

“Our labour market problem is primarily a youth problem…The data shows that the coalition has sent the youth labour market back into crisis.”

Ministers should certainly listen to the Recruitment and Employment Confederation. In the foreword to its report, “Avoiding a lost generation”, the chief executive wrote:

“These young people risk becoming a ‘lost generation’ unless action is taken by all those with a role to play.”

The REC calls for a series of specific measures from Government and others. The message is consistent. The Government need to act, but action from this Government is what we are missing.

What about the prospects for the coming months? We are at the start of a massive cull of public sector jobs. The Office for Budget Responsibility says that more than 400,000 of them will be lost over five years. Others say it will be worse. The OBR told us that in the current financial year 5,000 jobs would be lost, but the Chartered Institute of Personnel and Development said the figure would be nearer 50,000—10 times as many. We see from figures published this morning that the CIPD was right: 60,000 public sector jobs lost in six months.

What about the coming year? The OBR says that 40,000 jobs will go, but the Conservative-led Local Government Association says that local authorities alone will shed more than 100,000 jobs next year. The OBR seems to have failed to grasp the magnitude of what is going to happen.

There is no sign at all of the boom in private sector jobs that the Government promised to take up the slack. The Office for National Statistics spelled it out this morning. Growth in private sector jobs in the past quarter was nil. Nothing. Zero. With the Government, as Richard Lambert pointed out, having no growth strategy, we will not see a private sector job resurgence any time soon.

We wish the Work programme well, but if there is no work, as my hon. Friend the Member for Wansbeck said, it is not going to work. Now, in an extraordinary about-turn on the promises that Ministers have made about the Work programme, it turns out that it will help far fewer people than the programme that it is replacing. The scorecard published today by the think tank Reform sums up the position. For the Department, the DWP, it is a case of

“promising too much and delivering too little”.

The Government have scrapped the future jobs fund, which has been the focus of the debate. People in Jobcentre Plus echo what we have heard in the debate. Those in my area say that FJF was clearly a success, with up to half of those who were placed in jobs being kept on by their employers after their six-month placement ended, with still others going on to other jobs with the benefit of great experience on their CV. We heard from several Members in the debate about the achievements of the fund. My hon. Friend the Member for Wirral South (Alison McGovern) mentioned people placed with Age Concern Wirral supporting voluntary sector capacity building.

My hon. Friend the Member for Bolton West (Julie Hilling) was right to underline the importance of volunteering as a route back into work. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) paid tribute to Ali Thomas and her work at Rhyl city strategy. My hon. Friend the Member for Barnsley East (Michael Dugher) spoke about 200 young people whom, it was hoped, would be in work by the end of March. We heard from my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) about 26 people being placed in work through Epic housing association. There is a raft of achievements around the country, brightening the prospects of young people for the future.

The problem of youth unemployment is particularly serious at present because there is such a large cohort of young people. The size of that cohort will decrease over the next few years, so there is a strong case for the future jobs fund or something very like it, at least in the next few years. The Minister may not need to announce a long-term initiative, but she needs to grasp the scale of the problem in the short term and come up with proposals to tackle it.

It was the Churches report, “Unemployment and the Future of Work”, that made the case 14 years ago that it was wrong in as prosperous a society as ours for large numbers of people to be deprived for long periods of the chance to earn a living. More than 250,000 of the young people currently out of work have been unemployed for more than a year. As we saw in the 1980s and in the early 1990s, long-term youth unemployment does untold long-term damage. We cannot afford the Government doing what those previous Governments did—abandoning yet another generation of young people. Young people do not need warm words or sympathy. They need action, and the time for action is now.