We need an enterprise revolution to tackle the scandal of youth unemployment

The coalition has failed to help would-be entrepreneurs innovate their way into work. Labour will show that we can do better.

Under this government, youth unemployment reached a staggering one million. Even more face the prospect of a low-skill, low-paid and insecure job. This has to change.

But we don’t just want to help people to get a job; we want to help those who want to create a job for themselves and for others. An enterprise revolution among our young people could help us tackle the scandal of youth unemployment – and help get our country back on its feet. And that’s what we’re setting as a Labour ambition today.

Today, Britain doesn’t do as well as it should in global enterprise league tables. In fact, if we had the same start-up rate as Germany or America, we could create another 200,000 new self-employment opportunities and businesses. That’s the conclusion of a brilliant new report written by Jamie Mitchell, former managing director of Innocent Drinks for Labour’s Youth Jobs Taskforce today.

The report is urgently needed. This week, we learned that the government’s much vaunted plan to help would-be entrepreneurs innovate their way into work is miles short of hitting its target. The New Enterprise Allowance was supposed to support 40,000 people set up shop. But it’s still 35% short of hitting its goal – and a measly 6% of young people have received help. We think we need to do better than that.

Jamie’s recommendations should be read and considered by anyone – and any party – who thinks that we can and should do better. Studying the pioneering work of Labour councils all over Britain, along with the great work of the Prince’s Trust and Young Enterprise, Jamie has handed us some big conclusions to think on.

First, we need to make sure enterprise isn’t just a bolt-on to careers advice. Enterprise needs to be recognised as a big option that’s open. There is no lack of talent, ideas or creativity among our young people. Our problem is that too much of this entrepreneurial energy is unrecognised or unsupported. Right now, JobCentres’ advice is mixed at best and what’s left of our careers service often gives enterprise only a fleeting mention.

Second, Jamie also encourages us to consider whether we could expand the Start Up Loan scheme, targeting young people aged 18-30, and how to put more emphasis on encouraging young unemployed people to consider the New Enterprise Allowance, which is on course to dramatically miss its targets. Local councils need to follow the example of trailblazers like Sheffield Council, which has built a team of school enterprise champions, academies like the Peter Jones Enterprise Academy offering enterprise qualifications, business networks offering advice, and universities offering incubator space, advice, training and even grants – all dedicated to boosting the ranks of local young entrepreneurs.

Next, we have to look at enterprise in schools. Young Enterprise for example, reckons that 42% of their alumni start a business during their career. That’s nearly twice the rate for those who join their programme. And finally, we need to think about how we measure outcomes a little better so that we know what works and what doesn’t.

This is a big ambition. It is to the next generation of entrepreneurs that we will look for the businesses that will help our nation thrive in a fast changing world, drive the innovation that will improve our lives, and create the decent jobs we need.

Jamie’s report is about putting entrepreneurship at the heart of our national story and builds on our ambition to make this happen - from our plans for a proper British Investment Bank with a network of regional banks to help businesses get the finance they need, to a revolution in skills giving firms the support, funding and responsibility to make this happen.

Our challenge is to open the floodgates of opportunity, giving our young people the chance to turn their good ideas into successful businesses.

Liam Byrne MP is a former technology entrepreneur and shadow work and pensions secretary

Chuka Umunna MP is shadow business secretary

Unemployed young people stand in line outside a job centre in London. Photograph: Getty Images.
Grant Shapps on the campaign trail. Photo: Getty
Show Hide image

Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.