Labour did it before. Can it do it again, with things being so much harder now? New Labour’s new deal for the young unemployed levered large numbers of people into work, but in 1998 the economy was on the upswing. Now, economic stagnation has resulted in falling vacancies and rising unemployment. And Donald Trump’s war threatens much worse in the future. Today the Department for Work and Pensions secretary, Pat McFadden, promises “life-changing opportunities to young people” to “significantly reverse the increase we inherited in those not in education, employment or training”, now numbering nearly a million.
A major boost will be the greatly extended youth jobs guarantee, offering six-month-long subsidised-wage roles for unemployed 18- to 24-year-olds. And a youth jobs grant will offer employers a £3,000 subsidy to hire young people who are on benefits and have been out of work for six months. It mirrors the Future Jobs Fund that Labour brought in, after the financial crash, in 2009 – one of its most successful programmes, which boosted participants’ chance of employment by 27%, with a net gain per participant of £7,750 in increased wages and tax receipts and reduced benefit payments. (David Cameron scrapped it in 2010 without waiting to see those results.)
Labour will reform the apprenticeship levy, for too long used to invest in existing staff, and focus it on young people and new starters, with a £2,000 grant encouraging smaller employers to take on each of 50,000 new apprentices. All told, the government aims to create 200,000 more jobs.
That help is sorely needed. I was at the Tower Hamlets jobcentre in London last week, sitting beside work coaches in their weekly meetings with unemployed young people. I heard the rising desperation in the voices of those applying over and over again for jobs: they never even get rejections to their carefully honed CVs – just nothing.
Ayesha, at 19, has been out of work for nearly six months. Together she and her work coach look through jobs on the screen: there seem to be 30 vacancies for administrators and caseworkers, but her coach tells me that about 3,000 will be applying, instead pointing out courses offering her a level 2 certificate in caring for Send children, or for nursery work. She has six GCSEs and had been working in a pharmacy for a year, “but it turned toxic, really horrible,” she said, so she left. “I had no idea at all how hard it would be to get another job. I wish I’d never left.” Articulate, organised and keen, she seems a good prospect for any employer. But then so do all those I meet.
Ali has been looking for a job in accounts or payroll since taking his degree in maths, finance and accounting in 2024. “I thought that degree would get me a job,” he said. He has worked in temp jobs, in stock rooms. “I apply right away to any job, but they all turn out to be commission only, work from home, not real jobs.” He went to a job fair at Westfield shopping centre in west London. “But there weren’t jobs, just companies selling training courses.” He has signed up for a charity programme that finds work experience with employers and helps with CVs. “I am so bored at home!” he said.
Another young man named Adam says his “passion is IT”. He has a BTec level 3 in computing science (the equivalent to 3 A-levels) that he thought was a passport to employment. He did finally get one interview recently, but “I was very nervous. Maybe I messed up, with no confidence.” His coach arranges help with mock interviews. On offer are training courses and a revived national careers service (reduced from a one-on-one counselling programme to a phone service and website by Michael Gove in 2014). Youth hubs are opening – 360 of them to replace Labour’s previous Connexions agency – offering help with problems, alongside education and employment.
Talking to managers here, they say the old jobcentre stigma lingers. Iain Duncan Smith’s punitive days of severe sanctions in 2013 had staff under order to knock as many people off benefits as possible for minor infractions such as being a few minutes late for an appointment. Many are afraid on their first visit, as the Department for Work and Pensions has a malign reputation for benefit abominations such as its treatment of carers – which was subsequently exposed by the Guardian’s Patrick Butler.
But the unemployed are now likely to find more carrots than sticks, work coaches on their side, not enemies. Sanctions remain an essential backstop: 5.9% of claimants were sanctioned last year, many fewer than the 12% in 2017, when claimants could be struck off benefits for as long as three years. There was the misnamed Help to Work programme, which was used to force long-term claimants into doing 30 hours of unpaid community work, such as graffiti cleaning, to qualify for benefit. This punishment didn’t work, though its purpose may not have been effectiveness but a performative public gesture, matching George Osborne’s sneers about households asleep with the blinds down instead of working, or Duncan Smith announcing an end to the “something for nothing culture” as he warned claimants: “This is not an easy life any more, chum. I think you’re a slacker.”
Managers I spoke to regretted how those days continue to blight employers’ attitudes toward jobcentres. One said in frustration: “We can provide employers with exactly who they want. We have fantastic young people, we can create their perfect employee trained to their specification, ready to go in any skill. No need for advertising or agency fees.” But they said only 9% of employers nationally turn to jobcentres to recruit, their attitudes formed in the days when claimants had to prove they spent 35 hours making 30 applications a week, never mind how unlikely that might be. Flooded with useless applications, employers shunned jobcentres.
One manager had worked there for 35 years, throughout a rollercoaster of employment schemes – the successful and failed, practical and politically motivated, punitive and encouraging. He had operated through Labour’s new deal then seen it all dismantled, and is now beginning again with a new array of training and support. When I asked managers what they needed most to get young people into work, one said immediately: “Jobs, job, jobs!” That’s the challenge, far greater than last time around, as unemployment rises to 5.2%, 16.2% for young people, and higher in deprived areas; the Resolution Foundation says it would pause equalising the youth minimum wage in this crisis.
The hope has to be that these subsidised jobs and better targeted apprenticeships can prevent the kind of youth unemployment of Thatcher’s 1980s, which reached more than 20%, and under John Major, in the 1990s, that damaged those generations. This is not a good time to be young, but at least they have a Labour government.
Polly Toynbee is a Guardian columnist
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