June 20, 2014 by Paul Goldsmith
Yesterday, Ed Miliband announced a new plan to tackle youth employment that addresses the short term problems of youth unemployment whilst encouraging a long term solution that will increase the UK’s productivity, enabling us to become more internationally competitive, and young people to make more use of the opportunities they could get. It is a plan that makes economic sense, and is also politically coherent with what Miliband has been saying over the past few years about in-work poverty.
What Miliband wants to do is to offer a “youth allowance” to those aged between 18 and 21 who are out of work, which will only be paid to them if they engage in training. The reasoning behind this is that if these young people do not improve their skills, they end up in an endless cycle of unskilled, dead-end, low paid jobs followed by periods out of work. Miliband’s plan tries to make sure that the next time the young person applies for a job, they can apply for a more “decent” job with higher pay. It means that they spend their time on when they are on the job market making themselves more employable, with long-term benefits for the whole economy. In the short term, it will give those young people something to do when they are out of work, keeping them off the streets. In the long term, it could mean a generation of young people will be more productive, with benefits for them and the economy. This is a plan which may cost a little bit more in the short term – but in the long run it will save a lot on benefits, and the tax credits the government needs to pay to top up low-wages.
I have been asking for a while what answers political parties have to the concerns of those on a lower income who are worried about immigrants coming from the EU, prepared to take low-paid jobs in this country – which can stop young people in this country from getting on the job market. Well, here is something – ensure our young people get the skills to mean they can not only compete on a surer footing for those jobs, but also they can have the skills to get higher paid jobs, which means they have less to worry about.
I always have a way of telling that Ed Miliband has done the right thing. I wait for the reaction of Grant Shapps, the Conservative Party Chairman. If Miliband has done something that doesn’t make any sense – Shapps will point it out. That’s fine. If Miliband has simply got something wrong, or there is a good counter-argument – Shapps will point out where it is wrong, or what the counter-argument is. If Miliband gets it right though – the script that Shapps reads out is now a broken record – “This is just a recipe for more spending on welfare, more borrowing – and more taxes to pay for it. That’s exactly how Labour got us into a mess in the first place. Ed Miliband has no economic plan. All he offers is more of the same old Labour, and Britain would have a less secure future as a result.” Which is what Shapps said yesterday, which is why I know Miliband is onto something.