Motion made, and Question proposed, That the sitting be now adjourned.-[Kerry McCarthy.]
The Minister for Employment and Welfare Reform (Jim Knight): I am pleased to have another opportunity in the House to discuss young people and the recession. After my decision to call this debate, we in the Government were gazumped by the Opposition, who called a similar debate yesterday. Perhaps that explains why this debate is so sparsely attended. From my conversations with right hon. and hon. Members of all parties, I do not think that is due to lack of interest in the subject; rather, I think that it is because a lot was said yesterday and is going on elsewhere in the House and in Members' constituencies.
During yesterday's debate, we heard about the importance of education and skills to young people in this context, so I will not say much about that aspect. However, as a former Schools Minister for three years, I am delighted that the Opposition want to debate education. I hope that it means that they will now back the September guarantee of a place in education for every school leaver this year.
The Government have done much to improve young people's options in the recession, not just in education but in training, volunteering, work experience and jobs. Before I outline what measures we have taken and their positive effects, I would like to impress upon hon. Members the value of young people to business, society and the UK's economic recovery.
Businesses need to plan for the future and to develop today the people and skills that they will need tomorrow. They need to find now the talented young people who will be the leaders and innovators of the future. If they sit back and wait for the recovery, they will run the risk of missing out on the best new talent and being left behind by competitors who have planned properly for recovery.
Young people can bring new skills, new thinking and fresh ideas to a business, as well as bags of enthusiasm. My hon. Friend the Member for Bristol, East (Kerry McCarthy), who moved the motion at the beginning of this debate, entered the House at the last election, bringing new thinking, fresh ideas and bags of enthusiasm. Incidentally, she is considerably younger than I am. The vast majority of young people are eager to work, want to get involved and can reinvigorate a workplace. For society, having young people in work is obviously preferable to the alternative, but as well as the economic benefits to individuals and the public purse, there are also wider social benefits, such as the encouragement of responsible behaviour, better public health and a richer, more fulfilled society.
It is vital for recovery to get young people into jobs. We need to foster their innovation, develop their skills and ensure that as we move out of the recession, we can take full advantage of emerging markets and continue
to be a leading economic power. Yesterday I met the Indian Minister of Human Resource Development. As is well known and documented, the future growth of India, as well as that of China, is a great opportunity for the people of that country but also a challenge for us in the globalised economy. Without the talents of young people, we will struggle.
We must nurture the talent of our youth. Businesses throughout the country are recognising that and signing up to the "Backing Young Britain" campaign. Firms such as BT and Marks & Spencer are saying publicly that they recognise the potential of that untapped talent, and they are offering jobs, apprenticeships and work experience to thousands of under-24s.
Our message is simple: now is the time to back young Britain. The Government cannot do it on our own. We are doing plenty, as I will discuss shortly, but the problem of long-term unemployment faced by young people is a challenge that we must all pull together to tackle. Business leaders across the spectrum are getting behind the campaign: Terence Conran, Peter Jones and Richard Rogers feature in our advertising inviting businesses to recognise young people's potential.
Working with business, we need to develop a range of options, including education, training, work experience and, of course, jobs. The training and experience developed by Government and the private and voluntary sectors are crucial, ensuring that young people get the right skills for business and helping us to avoid a situation in which job vacancies arise and we do not have enough trained people to fill them. As a group, 16 to 24-year-olds can be particularly vulnerable to the effects of a recession. Starting out in the world of work during the worst global recession in 70 years can knock them sideways.
Beyond those reasons for doing more are the negative consequences if we do not. Young people can be among the first to lose their jobs when companies make redundancies, because their lack of the experience that businesses value makes them vulnerable during cutbacks. They may have started work only recently, and they can lose out from the "last in, first out" policy. Once unemployed, they can find it more difficult to get a new job. Higher unemployment means more competition for jobs, and young people are too often pushed out of the job market by people with more experience who, given the difficult labour market conditions, are willing to accept lower-level jobs for less money than before.
Steve Webb (Northavon) (LD): I do not suppose that anyone could dissent from what the Minister says about the value and importance of young people, but he has tried to give the impression that the global recession has caused the problem of youth unemployment. Will he backtrack to the period before he thinks the recession started-I do not mind what date he chooses; perhaps a couple of years ago-and tell us how many young people under 25 were not in education, employment or training before the recession, and how that number compares with the number before this Government came to power?
Jim Knight: The headline figures for NEETs in this country, compared with the rest of Europe, have been particularly high for some time. There is a more complex picture beneath the headlines, and it is important for all of us who care about the issue-I do not deny the hon. Gentleman's concern-to seek to understand it properly.
The NEET figures for 16 and 17-year-olds have improved significantly-they were starting to improve before the recession hit-because more are participating in education. Participation among 16-year-olds is now at 95 per cent. As a Schools Minister until six or seven months ago, I take satisfaction in that improvement. Indeed, I guided through Parliament the legislation to raise the participation age, which has not yet come into effect but is starting to galvanise improvement in the system. I was also responsible for negotiating with my friends in the Treasury, including the Secretary of State for the Department in which I now work, to secure funding for the September guarantee.
Mr. James Clappison (Hertsmere) (Con) rose-
Jim Knight: I am willing to take an intervention from the hon. Gentleman so that he can say that he supports the September guarantee and that his party would continue with it.
Mr. Clappison: I was actually rising to help the Minister. I can give him the answer to the question posed by the hon. Member for Northavon (Steve Webb), because the Minister was kind enough to give it to me in a written answer at the end of November last year. I was told that in 2000, the earliest point for the data, the number of 16 to 24-year-olds not in employment, education or training was 629,000, or 12.3 per cent. In 2007, before the recession took hold, the figure was 782,000, or 13.1 per cent., a significant increase in both number and rate. That is the point that needs to be dealt with.
Jim Knight: I was coming to address the point of 18 to 24-year-old NEETs. I note that the hon. Gentleman chose yet again not to back the September guarantee. I am not surprised about that, as I have written many times to his colleagues on the Conservative Front Bench to ask them to do so.
The NEET figures are certainly of concern, but as I said to the CBI at a round-table meeting on Monday, many of us in the House support the flexible labour market in this country. We have a much more flexible labour market than the rest of Europe, although perhaps not as flexible as that in the United States. I think that we have got the balance right in this country. We have developed the right balance to respond to globalisation while my party has been in power.
A negative consequence of that flexibility is the number of people who churn in and out of unemployment, particularly young people. The detail of the NEET figures for 18 to 24-year-olds shows that very few are NEET for long periods. The vast majority have short spells of unemployment and inactivity. That does not diminish the importance of continuing to do something about the issue, but we should view whether this debate is about NEETs with caution. There is a wider story about young people and recession than just NEETs.
Young unemployed people can find it more difficult to find a new job. Higher levels of unemployment mean there is more competition for jobs. Given the difficult labour market conditions, people with more experience are willing to accept jobs at lower levels and receive less money, which pushes young people out of the jobs market. Perversely, the responsible actions of employers
and employees-shortening working hours and accepting pay cuts or pay freezes to reduce the number of redundancies- mean that as we move into the recovery, the additional work is likely to be taken up by existing employees first.
Without the additional support the Government have put in place, we would be in danger of once again losing a generation to long-term unemployment, as happened under Conservative Governments in previous recessions. Those long spells of unemployment knocked the stuffing out of young people, they lost their confidence and suffered the consequences for many years in the labour market. We are still dealing with the effects of the Opposition's policies when they were in power during the recessions of the '80s and '90s. Their deliberate approach of shifting thousands of people on to incapacity benefits to make themselves look better has devastated families. By moving people further from the labour market and suspending signing in some offices-in essence, removing the requirement to look for work-the Government of the day created a generation of long-term unemployed.
Mr. Clappison: As the Minister is moving on to the more partisan section of his speech, may I ask him a question? When his Government were elected in 1997, one of their five pledges was to get 250,000 16 to 24-year-olds off benefits and into work. At what point in the last 12 years-I hope that is a sufficiently long time-has that pledge been fulfilled?
Jim Knight: Part of that pledge was the new deal for young people. We funded it by ending the assisted places scheme, which helped some young people to access private education. The new deal was extremely successful in taking people off long-term unemployment. Indeed, current long-term unemployment rates show that considerably fewer young people are signing for more than 12 months. More than 250,000 fewer young people are doing so than in 1997. I do not know the exact date when that started to kick in, but we have a proud record of dealing with long-term youth unemployment. The rate is currently a 14th of what it was in 1997.
Mr. Clappison: There is an explanation for the claim about long-term unemployment in the new deal, which I will come to, but the pledge was to get 16 to 24-year-olds off benefit and into work. At what point did that figure fall by 250,000?
Jim Knight: I remember the pledge very well. We pledged to set up the new deal for young people, which would get 250,000 young people off long-term unemployment and into work. That has been achieved.
As I was saying, by suspending signing and moving people further from the labour market, the Conservatives created a generation of long-term unemployed. We know that many of those people have never gone back into work. A key aim of this Government has been to work through the 2.7 million people on incapacity benefit, identify those abandoned by the Tory Governments of the past and start to help them to return to work.
The effects of the Conservative policy remain. There are still 1.87 million children in workless households in this country, some of whom have grown up thinking
that being out of work is the norm. By massaging the figures, the Conservatives simply stored up problems for the future. That is why we are now assessing people not on the reason for not working, but on what they can do. That process is starting to work through new claimants for employment and support allowance. From October, we will start the migration of people from incapacity benefit to more active benefits.
Steve Webb: The Minister is being very generous in giving way-as we are here, we may as well have a debate.
The Minister has talked about massaging figures and I know that he would not want to do that. He talks about a fall in long-term youth unemployment. Will he clarify something I have never been sure about? When the Department says that someone is not long-term unemployed, is that because the clock starts again? If somebody is unemployed for 12 months and goes on a scheme, which does not count as being unemployed, does the clock start at zero if they do not get a job when the scheme finishes? Is it actually quite difficult to be long-term unemployed because once a person is in that category, they go on a scheme and the clock is reset? Is that what happens?
Jim Knight: Certainly it is the case that when people move on to the new deal for young people, they no longer count as claiming jobseeker's allowance. Because I do not want to mislead anyone by massaging figures, I have looked carefully at whether that accounts for the significant fall in long-term youth unemployment following the introduction of the new deal. Even though some people churn back into the system, it is nowhere near the number that would take it up to the level of long-term youth unemployment that we inherited in 1997.
Jim Knight: I am quite happy to write to hon. Members to furnish them with statistics on that matter.
We are investing £5 billion in helping people to get back into work and have maintained an active labour market policy with people signing on and getting professional, personalised support from Jobcentre Plus. That is why we are still getting about half of jobseekers back into work within three months and about 70 per cent. into jobs within six months. The turnaround is even faster for young people. We are getting young people into jobs every day. The long-term youth unemployment rate, as we have been discussing, is a small fraction of what it was during previous recessions.
The UK's flexible labour market means that people move in and out of work very quickly, as we have discussed. We have to keep an eye on that churn. That is one reason why we are looking to move to sustained employment outcomes as measures of success for Jobcentre Plus. Young people are coming back into the system through that churn, but it is good that they are continuing to get jobs and build their skills, experience and CVs.
How are we doing in statistical terms? The additional measures we have brought in and the additional staff we have recruited to deliver them mean that across all ages, there are about 450,000 more people in work today than experts were predicting there would be a year ago. About 2.5 million more people are in employment
than in 1997. We will never deliberately damage people's potential by moving them off jobseeker's allowance to make the figures look better. We will invest in potential-developing training, work experience and creating real jobs. When young people leave jobseeker's allowance today, it is because it is the right thing for them, not the right thing for us.
We will continue to invest in potential through education. Today, there are more young people in education than in 1997. Last September, an additional 55,000 places were created for the September guarantee. We are committed to a better education for all because we know the benefits it can bring, not only in improving job prospects.
Some young people look for part-time work to supplement their income while they study. As they are looking for work, they are identified on the International Labour Organisation measure as actively seeking work. They are therefore included in the unemployment figures. Of the approximately 950,000 young people who are counted as unemployed through the International Labour Organisation labour market survey, more than 250,000 are full-time students looking for a little part-time work to see them through. The headline figures therefore do not tell the real story. The figures are a useful comparator with the past and I do not duck them, but it is only the headline figures that interest the Opposition. They want the headlines; not the real story.
We have learned from the Conservatives' mistakes, so in addition to all the support we have introduced to help people get back to work quickly, we have created specialist help aimed specifically at 18 to 24-year-olds. That is on top of the help available to unemployed people during the recession; for example, pre-redundancy support, help for professionals, accelerated day one assistance and support for people who want to start their own business. All of that is equally accessible to young people.
In addition, there has been engagement from businesses, as I have mentioned, through the Backing Young Britain campaign, and help from Government in the form of the young person's guarantee in schemes such as the future jobs fund. All that support is funded from the £5 billion fiscal stimulus package, which, of course, the Opposition have constantly opposed. The inference is that they would not spend that money and would thus scrap the 170,000 jobs created for young people and those in unemployment hot spots through the future jobs fund. All that shows that the Opposition have still not figured it out-for them, unemployment still is the price worth paying.
The action that the Government have taken has kept unemployment below 3 million and has kept long-term unemployment lower. Incidentally, I need to clarify that when I talked about a 14th, I was making a comparison with the low point of the early '90s recession rather than with 1997. I apologise for having to make that clarification.
We have had a dramatic fall in gross domestic product during the global recession. Output has fallen by 6 per cent. All predictions based on previous recessions were that unemployment levels would rocket much higher, as they did in the '90s recession when output fell by 2.5 per cent. and unemployment rose by 3.4 per cent. The predictions that something similar would happen this time have not come true. Unemployment has risen, but nowhere near the levels anticipated.
Next Section | Index | Home Page |