Wise up Mr Grayling: youth unemployment is no mere distraction

18 November 2011

Could it be that Matthew Taylor, the RSA’s chief executive, is even more influential in
Downing Street today than he was when he was head of policy under Tony Blair? His latest blog
is certainly causing a huge stir. David Aaronovitch picked it up in yesterday’s Times and
put a rocket under it.

Matthew suggests a ‘bond for hope’ to fund a programme to tackle youth unemployment and I hear this has already caused a massive flurry of excitement inside Number 10. Here is the bones of the
suggestion in his own words:

‘The Government should create a "bond for hope". This would be a five year bond earning say 1% tax free interest (so, below inflation but above what banks are offering). To reduce
the worry that this is more Government debt liability, investors would have to carry the risk of Government taking up an option to roll the bond redemption date on by a further five years.

The bond would aim to make £2 billion pounds available immediately to fund roughly a quarter of a million one year jobs for young people costing £150 a week (say £125
weekly allowance and £25 employer admin fee). The bond fund would be financed equally by a direct grant from Government, by 100 companies with the largest current capital reserves, who
would be asked publicly to sign up or explain why not (after all, it would cost them less than £7 million each), and a public subscription made up of 660,000 individual investments of
£1,000. The public bond would be targeted at particular groups, for example well off pensioners. Those who bought the bond would receive a certificate and other forms of public
recognition. The bond would be overseen by an independent body of senior respected figures who would be charged with championing it among corporates and the public.’

Matthew has modestly invited other more clever folk (can there be such a thing?) to pick apart his argument. And he has now "">provided an update himself of the astonishing response the post elicited.

Matthew suggested three areas of work for young people: schools, old people’s homes and public space. Personally, I think this is where his argument falls down. These are the classic spaces of
state-driven work creation schemes. The finding of "">an evaluation for New Deal of the Mind’s
Future Jobs Fund scheme suggests that placements in the creative sector are the answer – something Matthew should be promoting as the head of the the Royal Society for the Encouragement of
Arts, Manufactures and Commerce.

There is now ample evidence that the government has lost its way on youth unemployment and needs some seriously imaginative ideas to dig itself out of a hole of its own making. Matthew Taylor has
now thrown them a lifeline, but there are others doing the thinking that is clearly not going on within government itself.

The IPPR has urged a return to the idea of a jobs guarantee for the long-term
unemployed and the Centre for Economic and Social Inclusion has published some excellent practical
suggestions for a youth employment scheme to provide 75,000 jobs.

Meanwhile, ministers stick to the Work Programme as a universal panacea when it was never designed to provide jobs for young people (its priority is people on incapacity benefit, ex-offenders and
people with substance and alcohol abuse problems). As Patrick Butler has taken pains to "">point out on his Guardian blog, the Work Programme is letting down young
people and the third sector organisations set up to help them.

It would be unfair to say that the government is in open panic about youth unemployment. After all, Chris Grayling thinks one million young people on the dole is a mere distraction. But ministers
need to start listening to people who have taken the trouble to do the work on the ground and to those, like Matthew Taylor, who have thought seriously about providing some solutions.

  • rndtechnologies786

    View is good.

  • Edward McLaughlin


    ‘…the hysteria that the young are somehow more disadvantaged than any other unemployed person’?

    But there is surely nothing hysterical about facing up to the fact that those entering the workplace, are up against a dreadful situation? Finding work is hard for anyone right now, but it is in fact more difficult for someone with no experience. How would it not be?

    Yes, some young people display a woeful absence of enthusiasm, but perhaps they have come to the conclusion that the battle to find a job is one they simply can’t win?

    They are our young and it is our job to pass on to them, the skills and the attitude which will allow them to function as we do now, when we have shuffled off. To castigate the whole generation might feel good but it will not get anything done.

    The education you rightly criticise, was not of their making was it? It was allowed to happen on our watch.

    We owe them and we can either recognise that and try to do better for them and those who follow them, or we will be treated a terrible future.

  • getyourfactsright

    The section in your piece covering the Work Programme is completely incorrect. The Work Programme was never touted as the universal panacea nor is it primarily focused on hard to reach groups such as those on Incapacity benefit and those with abuse issues. Work Choice covers most of that. Work Prog is designed to get anyone into work. To suggest that its not for young people is ill informed and adds to the hysteria that the young are somehow more disadvantaged that any other unemployed person. Viewing Newsnight and other recent programmes wringing their hands trying to come to terms with the poor young unemployed, would do well to examine the very poor quality of young people’s attitude and skills which contribute to their unemployment. The last couple of decades of educational delivery and parental responsibility have a lot to answer for. You are not owed a job, you go out and get it.
    Now do your job and get your facts right.

  • David Blanchflower

    This is not a crazy idea at all and I would support it. But one thing you could do is to issue the bond and have the bank of england buy it as part of QE. This essentially would amount to credit easing. But why stop at 2 billion pounds as you have a million unemployed. You probably would have to do fifty times that to make a dent in the problem.

    Helping the young is a priority given that youth unemployment rates (under age 25) are 21.9% compared with 6.5% for 25-49 year olds and 4.7% for those age 50+
    Danny Blanchflower

  • fergus pickering

    I think our senior citizens are working because the wreck of their pensions has left them short of money. In which case Gordon Brown, who did the wrecking, must shuffle up and take a bow. Many of the young people who are unemployed have no skills at all, not even the ability to get out of bed in the morning.

  • Yow Min Lye

    Or the Government could try lifting more young people out of tax and national insurance altogether – which, as Fraser Nelson points out elsewhere, has worked wonders for boosting the employment of our senior citizens.

  • Edward McLaughlin

    Good to see someone throwing a spotlight once again on this massive problem.

    I have before asked about what you mean by ‘the creative sector’. Once again I think it would be useful if you were to expound this so that we are clear about your intention.

    The phrase as it stands, tends to conjure images of batallions of meeja types, hauling the nation up by its bootstraps by means of photoshop skills and video installation – and frankly, it all sounds a bit limp.

    Can we not extend our idea of ‘the creative’, to include those who create in a wider sense? The joiners and bricklayers whose trades once aspired to great works and which now fail to attract young people due to the past thirty years or so, of teachers scoffing at the idea of little Darren going near such base things as saws and mixers.

    We need to return to the idea of the skilled craftsman and we need to have for the first time ever, ways of attracting craftswomen. Proper skills are what will bring success, and that means much more than ticking a box in a task book to say that we can work a photocopy machine.

Can't find your Web ID? Click here