Coalition is cavalier on unemployment
The government says we can't afford to provide training and job schemes for young people. But we can't afford not to
o Chuka Umunna
o guardian.co.uk, Wednesday 30 June 2010 17.00 BST
So now we know: the action being taken by this Lib-Con government in the name of deficit reduction will cost at least 1.1m jobs across the public and private sectors. How do we know this? Because the Treasury says so, hence today's big story.
But far from the media circus, a new deficit is growing. Not a fiscal deficit, but a generational one. It takes the form of the thousands of young people who will leave school this September with no prospects of work or training and who risk slipping into a crippling cycle of long-term unemployment. It is a debt that the new government is racking up in order to fund a macho, ideologically motivated drive to slash government spending deep and fast. And unlike the fiscal deficit, it will not take four or six or 10 years to pay down; it will take a generation.
The cause? The cavalier approach of this government to youth unemployment. After less than three weeks in, the coalition announced it would be abolishing Labour's £1.2bn Future Jobs Fund (FJF), substituting it with apprenticeship funding worth some 12% of the original total. This move ditches the 100,000 jobs for 18-24 year olds funded by the FJF this year alone.
In my neck of the woods, the FJF has provided £1.2m to support 200 posts for local young people who, otherwise, would be in the dole queue, losing hope and motivation with every passing month. Instead, it has given them valuable new skills, self-esteem and a sense of structure and purpose – all of which stimulates the local economy, cuts crime and makes everyone healthier and wealthier.
A cursory glance at Labour's budget in March shows the FJF was entirely compatible with the goal of reducing government debt. It has helped boost the fragile recovery and, in the medium term, will actually reduce government outgoings. Research by the Treasury has shown that every £1 invested in similar schemes in the past saved the taxpayer £3 in benefits. It's no-brainer, but Britain's new chancellor doesn't get it.
And the similarities between his emergency budget and Geoffrey Howe's budgets in the early 1980s are deeply worrying when one considers the civil unrest which followed then. It is all the more worrying given that Howe sought to reduce spending by 4% and George Osborne now seeks to do so by a whopping 25%. Then, as now, the government cut too soon and too deep, with no effectual schemes to keep young people active.
It sends a shiver down my spine to reflect on the effect this had on my area – riots in the north of my constituency in the 1980s tore my community apart. On one occasion, my mum was out shopping with my sister and me when unrest broke out. She had to drop the shopping, grab us and run. Yes, police racism was a big cause of the trouble but those riots were also rooted in the deprivation and despair of long-term youth unemployment. The Scarman inquiry, which followed the riots, was clear: "There can be no doubt that [unemployment] was a major factor."
Today, once again, we witness a Conservative government abandoning young people – this time abetted by the Liberal Democrats. In the long term, this will increase pressure on welfare spending and reduce economic growth, a debt that will cost future governments many billions when the brewing "generational credit crunch" hits. The government appears to suggest we cannot afford to provide the training, employment schemes and apprenticeships needed. They are wrong – we cannot afford not to do so.
Coalition is cavalier on unemployment | Chuka Umunna | Comment is free | guardian.co.uk
Coalition is cavalier on unemployment
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