How Labour would solve the youth unemployment crisis

The government's approach has utterly failed. We need a revolution in the way businesses, ministers and schools work together to get young people into work.

Today, the government finally admitted the truth. Its Youth Contract has utterly failed to get our young people back to work. The flagship scheme is now on course to miss its target by more than 92% - no wonder there are still almost a million young people out of work. The benefits bill for young people is now more than £3.6bn a year.

Today, Labour says we simply can’t go on like this. The system is broken and its needs to change, and one of those changes has to be a revolution in the way small business, government and schools work together to get our teenagers job-ready. That’s the conclusion of a radical report by Labour’s Youth Jobs Taskforce, led by Alan Buckle, deputy chairman of KPMG, which we publish today.

We asked Alan to spend six months talking to business about just what they can do to help tackle Britain’s youth unemployment crisis. We found some stark conclusions. British business is ashamed of the UK's sky-high youth unemployment – and champing at the bit to help – but all too often the system is getting in the way.

Look at Westfield’s work in east London to make sure Newham residents were first in line for work at the new retail park. Look at the National Grid’s programme to employ young ex-offenders. It’s a scheme that’s helped over 2,000 young people get a job. And look at the way that Labour councils like Liverpool, Sheffield and Manchester are creating Apprenticeship Agencies to forge a new partnership with small business to get young people onto the first rung of the careers ladder.

Businesses small and large want to join forces in tackling this crisis. But the government is letting them down. Our report finds that Britain’s small businesses have all but given up on the Work Programme and the Youth Contract which are respectively, abysmal and anonymous. Even Nick Clegg admits the system isn’t working.

But what the report exposes is that the problem now runs much deeper. Careers services have become all but extinct and young people now lack any independent advice on what skills to develop to land a local job and a local career.

The world of work is changing all the time, yet our young people have no guarantee of independent careers education and guidance at school, and the government has scrapped the right to work experience. No wonder six in ten firms say school and college leavers have not developed the self-management skills they need for work. Education and work are just too far apart and the result is a situation where we have nearly a million young people desperate for work at the same time as  business is reporting skills shortages that are getting worse not better. We can’t go on like this. Our report suggests some big changes.

First, we have to find a new way to harness small business. According to the Federation of Small Businesses, nine out of ten unemployed or inactive people who move into jobs do so with small businesses. So we have to revolutionise the way apprenticeships work for SMEs. Liverpool, Leeds and Sheffield are creating apprenticeship training agencies to make it easy for an SME to say 'yes' to a young apprentice.

Second, it means exploring how small business, government and schools can come together to rebuild Britain’s careers service. Labour pioneers like Manchester City Council are piloting UCAS-style clearing houses for apprenticeships to help small businesses find the recruits they need.

Third, we should look at opening up access to job outcome data for schools, so parents can get a much better idea of how well local schools are preparing their children for the world of work.

Fourth, we have to multiply the ways we bring businesses and schools closer together. At the best primary schools today, pupils are offered 'work discovery' to inspire them about the world of work. That’s especially important for opening male-dominated professions, like engineering, to women. For older pupils, employers should accredit rigorous vocational qualifications as part of our Tech Bacc alongside a work placement. And why not encourage more business people to sit on governing boards? We would give all schools the freedom to innovate with the national curriculum, so they can work with local businesses to tailor courses for local labour market.

Finally, we need to look into ensuring that young people leave school with a plan for their future careers, whether that’s a university, apprenticeship or employment offer. No one should feel undersupported when they move into the working world.

For three years now, this government’s policy has been one effort after another to divide and rule. To find one 'welfare dividing line' after another. When did we ever achieve anything by turning on each other? We have only ever achieved great things when we’ve pulled together. That’s what needs to happen now. We can end the crisis of youth unemployment. Business is up for it. Schools and colleges are up for it. We’re up for it. We just need to get the Conservative Party out the way.

Liam Byrne is shadow work and pensions secretary; Stephen Twigg is shadow education secretary

Two youths sit on a bench in Corby, Northamptonshire. Photograph: Getty Images.

Liam Byrne is shadow work and pensions secretary; Stephen Twigg is shadow education secretary

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Chuka Umunna calls for "solidarity" among Labour MPs, whoever is voted leader

The full text of shadow business secretary Chuka Umunna's speech to Policy Network on election-winning ideas for Labour's future, and the weaknesses of the New Labour project.

There has never been an easy time to be a social democrat (or “democratic socialist” as we sometimes call ourselves in Britain). Whereas the right can demonise the poor and extol the virtues of the market, and the hard left can demonise the market and extol the role of the state, our position of constraining the domination of markets and reforming the state is, by definition, more complex.

It is nonetheless the case that social democracy has a historic responsibility, in every generation, to renew democracy and preserve a civic culture. This is achieved not through soundbites and slogans, but through the hard-headed development of a progressive politics that reconciles liberty and democracy, new comers and locals to our communities, business and workers, in a common life that preserves security, prosperity and peace.  This historic mission is all the more urgent now and my determination that we succeed has grown not weakened since our election defeat last May.

But, in order to be heard, it is necessary to make balanced and reasonable argument that both animates and inspires our movement, and which is popular and plausible with the people.  The first is pre-requisite to the second; and there is no choice to be made between your party’s fundamental principles and electability. They are mutually dependent - you cannot do one without the other.

We are in the midst of choosing a new leader and it is clear to anyone who has watched the UK Labour Party leadership election this summer that amongst a significant number there is a profound rage against Third Way politics – as pursued by the likes of Bill Clinton, Tony Blair, Gerhard Schröder and others - as a rejection of our fundamental values.

In the UK there is a view that New Labour accepted an uncritical accommodation with global capital that widened inequality, weakened organised labour and we were too close to the US Republicans and too far from the European left.

I do not believe this is fair, not least because we rescued many of our public services from the scrap heap when we came to office in 1997 and there were very significant achievements  we should celebrate.  New Labour renewed our National Health Service in a fundamental way; we built new schools and improved existing ones; we set up new children’s centres all over the country; we brought in a National Minimum Wage; we worked with others to bring peace to Northern Ireland; we introduced civil partnerships.  Just some of our achievements.

However, though we may take issue with the critique, I do not think we can simply dismiss out of hand those who hold critical views of New Labour. Like any government, the New Labour administration made mistakes - it could and should have achieved more, and done more to challenge the Right’s assumptions about the world. In the end, it is not unreasonable to be ambitious for what your party in government can achieve in building greater equality, liberty, democracy and sustainability. It is far better we acknowledge, not reject, this ambition for a better world, as we seek to forge a new politics of the common good fit for the future.

Realising our values in office has been disrupted by globalisation and the surge of technological forces that are displacing and reshaping industry after industry.

Some argue that globalisation as an ideological construct of the right. But we must recognise that we live in an increasingly integrated world in which markets have led to an unprecedented participation of excluded people in prosperity, a rise in living standards for hundreds of millions  of people and a literacy unprecedented in human history – this is particularly so in emerging economies like my father’s native Nigeria. And the internet has led to a level of accountability that has disturbed elites.

Yet, this has been combined with a concentration of ownership that needs to be challenged, of a subordination of politics that requires creative rather than reactive thinking, and these global forces have exacerbated inequalities as well as helped reduce poverty.

So it is important that we understand the sheer scale and impact of new technologies. At the moment we are engaged in a debate about Uber and its threat to one of the last vestiges of vocational labour markets left in London, those of the black taxi cabs and their attainment of 'The Knowledge'. But the reality is that within the next decade there will be the emergence of driverless cars so we have to intensify our exploration of how to support people in a knowledge economy and the realities of lifelong learning, as well as lifelong teaching. As people live longer we will have to think about how to engage them constructively in work and teaching in new ways.

Once again, I'm addressing all of this, Social Democracy requires a balanced view that domesticates the destructive energy of capital while recognising its creative energy, that recognises the need for new skills rather than simply the protection of old ones. A Social Democracy that recognises that internationalism requires co-operation between states and not a zero sum game that protectionism would encourage.

Above all, Social Democratic politics must recognise the importance of place, of the resources to be found in the local through which the pressures of globalisation can be mediated and shaped. Our job is to shape the future and neither to accept it as a passive fate nor to indulge the fantasy that we can dominate it but to work with the grain of change in order to renew our tradition, recognising the creativity of the workforce, the benefits of democracy and the importance of building a common life.  Sources of value are to be found in local traditions and institutions.

This also requires a recognition that though demonstration and protest are important,; but relationships and conversations are a far more effective way of building a movement for political change.

One of the huge weaknesses of New Labour was in its reliance on mobilisation from the centre rather than organising. It therefore allowed itself to be characterised as an elite project with wide popular support but it did not build a base for its support within the party across the country, and it did not develop leaders from the communities it represented. It was strong on policy but weak on strengthening democratic politics, particularly Labour politics.

Over half a million people are now members, supporters or affiliated supporters of our party, with hundreds of thousands joining in the last few weeks. Some have joined in order to thwart the pursuit of Labour values but many more have joined to further the pursuit of those values, including lots of young people. At a time when so many are walking away from centre left parties across the Western world and many young people do not vote let alone join a party, this is surely something to celebrate.

So it is vital that we now embrace our new joiners and harness the energy they can bring to renewing Labour’s connection with the people. First, we must help as many them as possible to become doorstep activists for our politics. Second, I have long argued UK Labour should campaign and organise not only to win elections but to affect tangible change through local community campaigns. We brought Arnie Graf, the Chicago community organiser who mentored President Obama in his early years, over from the U.S. to help teach us how to community organise more effectively. We should bring Arnie back over to finish the job and help empower our new joiners to be the change they want to see in every community – we need to build on the links they have with local groups and organisations.

I mentioned at the beginning that in every generation Social Democracy is besieged from left and right but the achievements of each generation are defined by the strength of a complex political tradition that strengthens solidarity through protecting democracy and liberty, a role for the state and the market and seeks to shape the future through an inclusive politics. Solidarity is key which is why we must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office.

Yes, these are troubled times for social democrats. All over Europe there is a sense among our traditional voters that we are remote and do not share their concerns or represent their interests or values.  There is surge of support for populist right wing parties from Denmark to France, of more left wing parties in Greece and Spain and in Britain too. There is renewal of imperial politics in Russia, the murderous and abhorrent regime of ISIL in the Middle East, volatility in the Chinese economy and in Europe a flow of immigration that causes fear and anxiety.

But, the task of Social Democracy in our time is to fashion a politics of hope that can bring together divided populations around justice, peace and prosperity so that we can govern ourselves democratically. We have seen worse than this and weathered the storm. I am looking forward, with great optimism to be being part of a generation that renews our relevance and popularity in the years to come.

Chuka Umunna is the shadow business secretary and the Labour MP for Streatham.