If we needed more proof that plan A is on track then this week’s labour market statistics are it. The latest figures show that employment continues to rise, with more men and women in work than ever before. Furthermore, unemployment is down by 24,000 for May-July 2013, and July’s revised fall of 36,300 is the biggest fall since June 1997. The Government’s economic plan is beginning to bear fruit; we have repaired the damage inflicted by 13 years of Labour’s financial mismanagement, and our economy has started to recover. As the Chancellor, George Osborne, has stated, our welfare reforms are helping more people into work, and inequality is falling.
Yet as we carry on towards economic renewal it is important we pay special attention to young people, especially as yesterday’s jobs market analysis reveals that whilst the unemployment figures continue to drop, youth unemployment has not been following the overall employment trend in the UK. There are 960,000 unemployed 16-24 year olds, which is around one in five who are in need of a job. A Manifesto published this week by the Million Jobs Campaign, of which I am a founder, seeks to address this problem. The Million Jobs Campaign was established to address the problem of youth unemployment, and our manifesto sets out five key policies that will help young people across Britain move into jobs:
1) Get rid of employer National Insurance Contributions for unemployed under 25s.
2) Make sure school pupils know all about apprenticeships.
3) Get rid of rules that stop employers from giving honest feedback.
4) Encourage more companies to take on a young person.
5) Help every young person to find a mentor.
These policies build on the good work the Government has done since 2010 and seeks to advance an already improved economic outlook for young adults. Youth unemployment has not reached the devastating heights of Southern Europe, because the Government has taken the necessary steps to avoid the fate of countries like Greece (65 per cent), Spain (56 per cent) and Portugal (43 per cent) where youth jobless rates have sky rocketed.
Since 2010 the Government has set about making the changes to education and training that have been desperately needed for years, including the £1billion Youth Contract that will provide nearly 500,000 new opportunities for 18-24 year olds through financial support for employers and work experience placements. The Government has also taken steps to strengthen apprenticeships to make them more responsive to the needs of the modern workplace and the number of apprenticeships has doubled, with almost a million apprentices having started since the Government introduced the scheme.
As a result the number of young people not in education, employment or training (NEETs) continues to decline, with the number of 16-18 year old NEETs the lowest in a decade and the introduction of a pre-apprenticeship training programme, known as a Traineeship, will help the most vulnerable young adults access employment. Changes being spearheaded by Matt Hancock MP as Minister for Skills combined with an overhaul of welfare led by Iain Duncan Smith, the Work and Pensions Secretary, will help get to the bottom of many of the structural unemployment issues.
Yet things will not come right overnight and we need to mix various policy ingredients to get to grips with youth unemployment, and new policies should be explored to act as a catalyst for change. To this end, it is important that the Government draws on the Million Jobs Manifesto, which was written following months of conversations with young unemployed adults from across the country.
The first proposal urges the government to exempt the unemployed under-25s from employer National Insurance Contributions for a minimum of two years, a proposal that makes both economic and political sense. This youth and business-friendly move would be a particular boost to small businesses, saving employers £520 per year per young person hired, and sends a clear signal that the Government values young people and understands they need a hand to get their first job. At an estimated cost of £287million (assuming all one million found employment), this policy would be likely to pay for itself and the deadweight loss (the economic inefficiency caused by the removal of the National Insurance contributions) is de minimis.
Last year, youth unemployment cost the Exchequer billions of pounds and by moving young people into work, we not only set them up for a prosperous and happy future – but we safeguard our economy for years to come.
Our second proposal says we must ensure that apprenticeships are promoted in schools. After all, how will we make the most of our newly reinvigorated apprenticeship system if pupils do not know the benefit and variety of the schemes on offer? Only through our schools will we engineer the cultural shift towards vocational training that we badly need.
Our third proposal includes a thorough review of the Equalities Act 2010, which has fostered a “political-correctness-gone-mad” culture and discourages firms from being honest with job candidates. High profile cases of businesses being sued for discrimination have created a culture of fear and firms too often tip-toe around their rights. What’s more, businesses should be able to actively recruit school and university leavers. Inexperienced job hunters who often find themselves head-to-head with more skilled candidates would find it helpful to know exactly which jobs are suitable for them. A review of the Equalities Act would help us set the record straight, empower businesses to have necessary, frank conversations with job hunters and reach out directly to young school leavers.
Our fourth proposal would be to more proactively encourage companies to take on a young person. We would do this by, for example, encouraging the Federation of Small Businesses to get their members to give young people an opportunity to work, and I believe that the NI exemption would be one of the steps we could take to encourage this to happen.
Our fifth proposal is to ensure that all young people have access to a mentor in order to help them, and to discuss career paths and opportunities with them, as well as to enable them to ask for guidance when school advisors may not be suitable.
The Million Jobs Manifesto was created to try to crack the chronic problem of youth unemployment and should be part of a proposal for young people that we take to the electorate in 2015. The Government has done an excellent job creating over 1.4 million jobs in the private sector, enabling over 1 million apprentices to get a foot on the employment ladder and having more men and women in work than ever before. However, one of the remaining challenges in the job market remains youth unemployment and we hope the Government will listen to what young people want. If they do, they will reap dividends by enabling young people to get into work and make a positive contribution to society.