Brooks Newmark MP is MP for Braintree and a member of the Treasury Select Committee. Follow Brooks on Twitter
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:
rid of employer National Insurance Contributions for unemployed under 25s.
sure school pupils know all about apprenticeships.
rid of rules that stop employers from giving honest feedback.
more companies to take on a young person.
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.
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.