Speech

National Convention on Youth Employment

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Speech by the Rt Hon Iain Duncan Smith MP

It is a pleasure to be here today.

And it is always a pleasure to be in Scotland.

There has - of course - been a lot of talk about independence recently.

But what we shouldn’t lose sight of in all the noise and clamour is that - while we might spend a lot of time talking about these issues in the media or the corridors of power - the UK and Scottish Governments have actually been getting on…in partnership…with delivering support to secure independence for young people.

We are working to secure the independence that work brings - and freedom from the dependency that is too often the product of a broken welfare system.

Yesterday we saw the latest jobs figures - and once again they paint something of a mixed picture.

While unemployment remains far too high, we do continue to see some encouraging signs of stability.

Employment is up by 9,000 on the quarter, with an increase of 45,000 in private sector employment outweighing a fall of 37,000 in the public sector.

That brings the rise in private sector employment in the last two years to over 600,000.

Unemployment is up on the quarter, though we shouldn’t lose sight of the fact that…though not quite as robust…the headline level is actually slightly lower than last month.

Moreover, the rise in unemployment on the quarter has to be seen in the context of falling inactivity, down another 27,000 on this quarter and, if students are excluded, now at the lowest level on record.

This is a sign that our welfare reforms are beginning to feed through, with more people coming off incapacity benefits and income support and so moving into the labour market.

Indeed, the number of people on out of work benefits since the election is actually down overall, by some 45,000. 

That’s what I mean when I talk about reducing dependency, and reducing the number of people who have been written off on the margins of society.

The fact is any Government can get unemployment down by putting people onto inactive benefits…but if we are serious about transforming our society we have to be focussed on getting inactivity down as well…tackling what I call the problem of the ‘residual unemployed’.

We are also seeing some stabilisation in the youth unemployment figures.

We shouldn’t forget that around a third of those described as unemployed in the headline figures are in full-time education.

Once you exclude this the level is essentially flat on the quarter.

I notice that there has been some talk of 100,000 young people unemployed in Scotland, but we should be slightly careful here - I think it is important that we separate out those who are in full-time education from those who are essentially NEET.

When we do that we find that there are just under 70,000 young unemployed people in Scotland who aren’t in full-time education.

This is not good enough, and we take it very seriously, but it is important that we agree the baseline of the problem we are trying to solve before we begin to tackle it.

This is the same for the UK as a whole - the headline figure is often cited as being just over 1 million unemployed young people, but once we take out those in full-time education the figure is around 731,000.

It is also interesting to see where we sit in relation to the rest of Europe - the UK’s employment rate remains well above the EU average…70.3% compared to 64.6%….and our unemployment rate well below - 8.4% compared to 10.1%.

So let me be clear: unemployment and youth unemployment are serious problems.

But I think it’s important that we put the figures in some context, and show that it is possible to make some progress even in an immensely tough economic climate.

And before anyone suggests that the UK-wide figures mask a much worse picture in Scotland, let’s consider the facts.

Unemployment is slightly higher than the UK average but - again - that has to be seen in context.

Scotland actually has a higher employment rate and lower inactivity rate than the UK.

That should be a wake-up call to anyone who tries to write Scotland off, stereotyping it as slower moving than other parts of the United Kingdom.

In fact, what has been particularly interesting in recent years is how little the regions of the UK have diverged compared to past recessions.

I do not mean to say that there aren’t differences.

Some areas are being hit harder than others, and we will do whatever it takes to respond to that challenge.

But the regional spread of the claimant count across the UK is much narrower than it used to be.

There will be a number of reasons for this.

But part of it will be the active labour market support which is available to young people across the UK.

Let us not forget that there is huge dynamism in the labour market - in the last 3 months alone some 900,000 people moved onto Jobseeker’s Allowance, but another 900,000 or so moved off.

That’s true of Scotland as well - in the three months to February of this year around 80,000 people started claiming Jobseeker’s Allowance, but another 81,000 flowed off.

A number of these will have found jobs under their own steam - but many will have benefited hugely from the employment support that the UK and Scottish Governments, working together…in partnership with the private and voluntary sectors…are delivering every day.

That includes helping young people get work experience.

I know there has been a lot said about this in recent weeks, so let me take this issue head on.

The Work Experience scheme is a programme I’m incredibly proud of.

What do young people need before they get a job?

Experience.

But too many are told they can’t get that experience before they’ve had a job.

When I came into office I met young people who had done the right thing…and managed to fix up a work experience place…only to find out that they would lose their Jobseeker’s Allowance if it lasted for longer than two weeks.

That didn’t make any sense, when employers were telling us that one of the main problems they faced when taking on young people was lack of experience.

So we extended the time that someone could do a placement - while keeping benefits - to up to 8 weeks.

Since then we’ve had more than 34,000 young people take part in the scheme.

The fact is it has been immensely popular with young people…we’ve got people practically queuing up to get involved…and some 50% of those taking part are off benefits 13 weeks after starting their placement.

I should also be clear that this is a voluntary programme - despite some of the nonsense talked in recent weeks.

Meanwhile employers continue to flood into the scheme - in recent weeks more than 200 employers have expressed their interest in getting involved, including major employers like Center Parcs, Airbus and Hewlett Packard.

Here in Scotland we’ve already seen more than 2,000 Work Experience places, and I would urge all employers here today to sign the pledge to deliver even more.

You will be catching the crest of a wave - in just a few weeks time we will begin the process of expanding the scheme as we launch the new £1bn youth contract.

From April we will be rolling out an extra 250,000 work experience and sector-based work academy places, meaning there will be a place for every young person who wants one before they enter the Work Programme.

We will also be introducing 160,000 new wage incentives, worth up to £2,275 each, to encourage employers to take on young people from the Work Programme.

This is about recognising that businesses take a risk when they employ a young person, and there are costs attached.

We want to ease that cost a bit so it becomes much more straightforward to give young people a chance.

And these incentives will be targeted at the private, voluntary, community and social enterprise sectors so that we create real, sustainable, jobs.

We now have hundreds of employers across Britain who have pledged their support for the Youth Contract.

These employers have not just committed to a Government programme - they have committed to saving our nation’s youth, and we should be immensely proud of them.

But Work Experience and wage incentives aren’t the only components of the Youth Contract.

When I was in Ayrshire last year for the launch of this conference series my speech focussed on a seemingly forgotten group - 16 and 17 year olds who had seen their employment prospects diminish dramatically over the last decade, long before the recession started.

The Youth Contract gives us an opportunity to renew our support for this group, with a new £150m programme to help disengaged 16 and 17 year olds move into full-time education, apprenticeships or work with training.

It will build on the work we’ve already done in the Work Programme, paying private and voluntary sector providers largely for the results they achieve in moving disengaged young people into positive outcomes and keeping them engaged.

The details of this at the moment apply to England only, but Scotland will receive additional funding under the Barnett Agreement and we are working with Scottish colleagues to understand how the new funding will be used.

This is part of a much wider positive engagement between the UK and the Scottish government at the moment.

We have Skills Development Scotland advisers co-locating in Jobcentres, able to offer advice and guidance to young people as they look for work.

We have Skills Development Scotland advertising their apprenticeship vacancies via the Jobcentre network.

And most recently we have seen the Scottish Government, Scottish Prison Service and Jobcentre Plus working together to roll-out ‘day one’ access for offenders to the Work Programme.

This is a relationship that is stronger by the day.

I believe we are at our best when we do this together - finding opportunities, joining up support, and delivering for young people.

Helping to achieve the independence that work brings and…in doing so…starting to change lives.

Let that be our joint ambition in the coming months and years.

To get young people engaging…to make sure they can access quality and personalised support, and…most importantly…to get them into real and sustainable work.