“Nothing less than the abolition of long- term youth unemployment”!

We don’t have much in the way of detail for Rachel Reeves Labour conference commitment of “nothing less than the abolition of long- term youth unemployment”. But based on what was announced it’s going to be nothing like that.

According to Reeves, every young person who has been out of work or education for 18 months will be given a mandatory paid work placement (the length of time wasn’t specified). Reminiscent of American ‘workfare’ schemes, those who refuse will lose entitlement to benefits.

Yet statistics available from the Department for Work and Pensions show there are only about 40, 000 18- to 21-year-olds actively seeking work who have been receiving jobless benefits for more than 12 months. This is a very small fraction of the total number of NEETs (around 5%!) 

Even if the proposed plans (part of Labour’s wide Youth Guarantee plan) were extended to those under 24 this would still be the case. Only 40% of nearly a million NEETs are categorised as ‘unemployed’. The remainder are ‘economically inactive’ and technically outside of the scheme and large numbers of these are in receipt of sickness payments.   (In fact only about a third of all NEETs claim any form of universal credit, a sign of their complete alienation from the current economic system.)                

Labour has tried this before. But Reeves’ proposals don’t really compare with the Future Jobs Fund introduced towards the end of the Blair/Brown governments.  Under this scheme, which was beginning to show (some) signs of success, before being axed by the Tories on the grounds that it was too expensive, the qualifying placement was only six months, and participation was voluntary.

FJF was heavily subsidised, though subsequent analysis showed that significant amounts of the initial outlay came back to the Treasury in the form of extra tax revenue. While young workers’ long-term employment prospects were also significantly enhanced.

Without financial incentives and with so many graduates available, employers are not going to hire school or college leavers independently – most don’t want apprentices. If the current Labour government was seriously committed to reducing the number of NEETs, they’d have to pay for it big time. The narrowness of Reeves’ plans means this won’t really be an issue.