RUTH SUNDERLAND: Youth job crisis a product of de-industrialisation of UK
Alan Milburn, whose interim report on Neets last week laid bare the scandal of a million young people on the scrapheap, now must turn to solutions.
Government measures so far, such as providing subsidised six-month jobs for those who have already been out of the labour market for a long time, are well-meaning but not the answer.
For that, there needs to be deeper and broader thinking about education, about post-pandemic working practices and about the kinds of jobs we want to create for future generations.
Neets – those not in education, employment or training – are a product of the de-industrialisation of the UK. We are making young people pay the price for the foolish belief that manufacturing doesn’t matter and the delusion that the economy can prosper on services alone.
The country needs to re-industrialise. Making things is the cure for Neets.
Not through a futile attempt to go back to some mythical pre-Thatcher golden age – her medicine was necessary, though harsh – but by focusing on modern manufacturing, where the high-value jobs of the future will be created.
What’s in a name?: The country needs to re-industrialise – making things is the cure for Neets
Defence should be at the core. Along with other European nations, we urgently need to invest much more in being able to protect ourselves, now that President Donald Trump has made clear the US is an unreliable ally.
The Government behaves as if defence is a cost to be minimised or avoided, which is absolutely the wrong approach.
Investing in defence is not only necessary to keep us safe, but it could be a powerful generator of jobs for young people, both at big players such as BAE Systems and in the supply chain. Broader manufacturing and specific industries, such as steel, should also be viewed in that context.
The production of virgin steel is loss-making in isolation, but the case for it looks very different when it is seen as part of a value chain.
The AI revolution will demand vast amounts of energy and Big Tech has vast amounts of money. We should get our hands on some of it.
Unfortunately, Energy Secretary Ed Miliband is a one-man damage machine for the economy. Look no further than OpenAI’s decision to shelve its Stargate data-centre project here due to high energy costs, largely driven by his Net Zero drive.
Rachel Reeves’s ‘Buy British’ initiative, encouraging government departments to favour domestic suppliers in procurement, is very much needed, but its effectiveness is doubtful given the existing culture.
One example: the long-drawn out international competition set up by the Government for the contract for small modular reactors, before it was eventually awarded to FTSE 100 champion Rolls-Royce, was a charade that would not be seen in any other country.
Any sane nation would have given the contract to their flagship domestic supplier without ado.
There also needs to be a big rethink of work from home (WFH).
Recent research by two London School of Economics academics, Peter Lambert and Yannick Schindler, suggests WFH is a major disincentive for employers to take on a raw recruit.
Firms obviously need to invest more time and effort in a youngster than they would in a more experienced hire. WFH makes that process slower and more difficult.
Young people miss out on mentoring and have less opportunity to absorb skills by osmosis. What was meant to be a pandemic-era emergency measure has become entrenched as an entitlement. Older employees may be reluctant to give up WFH privileges, but they are unwittingly hurting the prospects of younger workers.
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