Observations On Wage subsidy plan for young workers brought forward

Wage subsidies for firms hiring out of work 18 to 24-year-olds are to be triggered early in 20 deprived areas.

Deputy Prime Minister Nick Clegg has announced that payments will be paid when young people have been out of work for six months instead of nine.

The initiative is part of the government’s £1bn Youth Contract which was announced in November to tackle record youth unemployment.

It is hoped the cash will create around 400,000 work and training placements.

The subsidy, of £2,275, would cover six months of employment and is equivalent to half the UK’s youth minimum wage paid by firms.

The number of jobless under-25s rose to 1,040,000 in the three months to April.

‘Sharp divides’

Mr Clegg made the announcement at a jobs summit being held by the CBI employers’ association in London.

CBI director-general John Cridland told delegates: “Youth unemployment has been rising since 2004, so it’s clear that a return to growth alone will not be enough to tackle the underlying causes of the problem.

“Today’s young people are entering a complex world. We ask a lot more of them in making their way in the world than was asked of previous generations.

“The result is sharp divides between the haves and have-nots, and across generational lines. As employers, we can and should step up to give all of our young people the support they deserve.”

The latest figures show one in five young people available for work were still looking for jobs in the three months to April.

The unemployment rate for 18 to 24-year-olds is 19.9%, compared with a jobless rate of 5.4% for people aged 35 to 49. The average unemployment rate for people aged 16 to 64 is 8.2%.

The government’s scheme will also target the regional divide in employment prospects.

According to the Office for National Statistics, jobless rates in the north-east and north-west of England, Yorkshire and Humberside, and Wales are much higher than the UK average.

Within these regions, the government has listed 17 youth unemployment “hotspots”, including Blaenau Gwent, Hartlepool and Wolverhampton, where help for young people will be brought forward.

It has identified a further three hotspots in Scotland: Clackmannanshire, North Ayrshire and West Dunbartonshire.

‘Sticking plaster’

The Labour Party said the initiative was “much too little and much too late”.

The shadow work and pensions secretary, Liam Byrne, said: “This is a sticking plaster solution for what is now a national crisis.”

Labour favours a tax on bank bonuses to finance what it calls a Real Jobs Guarantee, which would pay £4,000 per person to fund six-month work placements for young people who have been out of work for 12 months.


Nick Clegg says that it’s imperative to solve the crisis in youth unemployment before permanent damage is done, which draws the question: “What planet is this idiot living on?”

Hasn’t he been around for the last year or, more to the point, hasn’t he been awake?

It’s just two days ago that official figures revealed a record 1,163,000 16 to 24-year-olds not in education, employment or training.

The number of people in this age group who are looking for work increased by 67,000 to 1.02 million, the worst total since comparable records began in 1992.

Simple maths, Mr Clegg. Just simple maths. That’s around 200,000 people’s working weeks lost for every day youth unemployment continues at that level.

“Before permanent damage is done,” Mr Clegg? You’re having a laugh.

Your government’s policies are doing damage every day its anti-working class policies are implemeted.

And its too-little, too-late strategy for youth unemployment isn’t likely to make much difference.

It’s difficult to see the point of handing wage subsidies worth £2,275 to employers to take on young workers for six months if the work isn’t there for the employers to offer.

Except of course if the idea behind the scheme is to use young workers to undercut and undermine existing staff’s rates of pay.

And while government contracts are offered to foreign firms rather than British-based ones as in the case of Bombardier, the work won’t be there.

The European Union rules that militate against British firms don’t help either, especially when foreign firms are allowed to import their own workforces on their own pay scales.

However, at least there’s some positivity in attempting to encourage job creation, even if it is being mishandled.

But that’s about the best you can say.

As TUC general secretary Brendan Barber comments: “The massive expansion of the work experience scheme is much less positive, unfortunately.

“There are already widespread reports of young people on the programme being exploited.”

The scale of the government’s response gives cause for concern as well.

The obvious lack of quality in a scheme which seems to have been planned without reference to the real world is joined by a distinct lack of quantity.

All over the country, over a million young people and their families will be wondering why the job creation part of Mr Clegg’s scheme, even as inadequate as it is, should be restricted to 400,000 places.

They are going to wonder whether they will get an opportunity for a job or will be part of the majority bunged into a “work experience placement.”

Young people aren’t stupid, Mr Clegg, and they can see as clearly as us that work experience placements are no substitute for a real job.

And they can see that there’s very little hope for them if the government continues to add to the pool of unemployed every month by laying off more and more public sector workers.

There are real answers available.

In construction, for example, a planned programme of housebuilding by local authorities offering tradespeople and a full quota of apprentices work in replenishing the housing stock would bring a huge change in the industry.

But not when all the government can offer is a miserly £400 million to replace the £4 billion it had already cut from the housing budget and not while housing completions dropped from 39,136 between October 2010 and March 2011 to 1,746 from April to September this year.

Once again, Mr Clegg. Young people need real jobs. They aren’t stupid, so stop trying to con them.

Nothing worse than working with a very small company who cannot deliver anything in a nutshell there is more to come from this coalition  who are afraid to implement the 3p charge on the petrol because of people power instead we have a Prime Minister who knew before hand by forcing a vote in parliament over the 3p petrol vote the coalition will not be popular.

On 26 Jun 12 News night had a junior minister instead of George Osbourne to answer questions regards to the chancellor 3p increase plan. I’m thinking send a replacement instead everything will be okay er no it’s not.  As much as I do not vote Tory or Fibdems I could not help to agree with a Tory member who can only describe as a coded message “You Can Run But You Can’t Hide George Osbourne.

Nadine Dorries, who has spoken out against Mr Osborne in the past, tweeted that Ms Smith “did not deserve” to face such an interview, adding that if he had sent her on to the BBC programme “he is a coward as well as arrogant”.

Her comments were repeated at Prime Minister’s Questions by Labour leader Ed Miliband, who accused the chancellor of refusing to justify the change of mind over fuel duty himself.

The Labour leader claimed Mr Cameron and Mr Osborne had failed to inform ministers and MPs of the change and called it “another case of panic at the pumps”.

Road users’ groups, the Sun newspaper, opposition parties and several Conservative MPs had been pushing for the fuel duty change, amid concerns that prices at the pumps were squeezing living standards.

Last week Prime Minister David Cameron said the planned duty rise would be “looked at”, but held out little hope for a delay, saying: “I think people sitting at home know that the government doesn’t have a bottomless pit of money.”

Speaking on the BBC’s Newsnight programme, Ms Smith, economic secretary to the Treasury, was asked a number of times when she was told of the decision to postpone the rise.

PMQs: Miliband accuses Cameron of ‘panic at pumps’

She said: “As a minister in the Treasury I’ve been involved in discussions for some time. The chancellor and the prime minister take those decisions.

“I’m not going to be able to give you a running commentary on exactly who said what and when.”

Ms Smith said the freeze would be funded by underspends in government departments but would not say from which ones.

“It is not possible to give you a full breakdown at this point because the figure is evolving somewhat,” she said.

Ms Smith’s appearance has attracted a large amount of comment on Twitter, with Labour MP Ben Bradshaw and former deputy leader Lord Prescott among those criticising Mr Osborne’s decision not to appear himself.

Conservative MP Louise Mensch said: “Anybody can have a tough time with Paxman… while the bubble (Westminster) has a go over one TV appearance… she is well respected, excellent in the chamber as a minister”.


In an interview with the Daily Telegraph on Monday Transport Secretary Justine Greening seemed unaware of the forthcoming change.

She said she supported the rise as part of the government’s deficit-reduction plan and would instead challenge petrol companies to cut the cost of fuel.

She said: “The taxes that we get in fund the public services that we all rely on. Surely it’s better to challenge the petrol retailers to pass on reductions to motorists, and actually I think that’s probably the most important thing to do.

“I absolutely think that the Treasury need to deliver on their deficit reduction plan. You see what’s happening in countries across Europe [and] I think you realise why having a credible deficit-reduction plan has been so important for this country, and we’re certainly not going to move away from that,” she added.

Some Tory MPs were said to be furious that they had been told to defend the government’s decision not to delay the fuel rise until a few hours before it was reversed.

One told the BBC: “It was absolutely bloody stupid, treating us like idiots.”



One response to “Observations On Wage subsidy plan for young workers brought forward

  1. This subsidy gfor companies to employe long term unemployed young people will probably just be used like the YOP, YTS and TfW programmes of the previous Tory administration were. Get a young person in for 6 months on minimum wage in a low skill job, half of which is claimed back, then once the period they can claim back for is over dump the young person and get the next long term unemployed young person in. Rinse, lather, repeat. If the work is there then the employers will take people on to do it. To create jobs we need to have demand for goods. If no-one has money to buy goods then they cannot demand them to the jobs to make them cannot exist. Get cash in to the hands of consumers and you will create jobs.

    When the bank bailouts were first going on a contractor who sat at the next desk to me suggested an alternative that sounded much better than giving money to the bankers. He suggested picking a group of people, say public sector workers between 35 and 55 or people with a degree who are in work but had an average household income of less than £50k pa for the past 3 years (the important thing is to give it to people who aren’t already rich and balance the size of the group so the individual’s sum is large enough that it will make a difference to their spending but not so large that it creates a new elite), and divide the money up between them. They would have a year to spend it and could only spend it in this country (no foriegn holidays, no putting it in savings, no buying shares or other investments) or use it to pay off debts (e.g. mortgage, personal loans, credit cards, student loans &c), maybe instead of cash give them a pre-paid debit card. The banks would still get the money eventually (repayment of debts, dividends from shares in the manufacturers of the goods bought and the retailers who sold them &c) but in the process jobs would have been kept open and the money would have moved through the economy offsetting the contraction from the banking collapse and reducing company needs to borrow as they can fund growth from profits. With the next tranche do over but with a different group (maybe people whose last name begins with the letter B and have an average income of less than £50k for the last 3 years).

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