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15 April 2011updated 18 Jan 2012 4:27am

New Statesman Jobs: Q&A

How to tackle current levels of unemployment.

By Staff Blogger

As the New Statesman launches its bespoke recruitment website, New Statesman Jobs, we ask leading politicians and thinkers for their solutions to the current unemployment crisis.

The panel

David Blanchflower: NS economics editor
Liam Byrne: Labour shadow secretary of state for work and pensions
Danny Dorling: Author of Injustice: Why Social Inequality Persists
Chris Grayling: Minister of state for employment, in charge of welfare reform (Conserv)
Mark Lovell: Executive chairman, A4e public service reform agency
Martina Milburn: Chief executive, Prince’s Trust
Jenny Willott: Co-chair of Lib Dem parliamentary committee on work and pensions

Q: Is Britain facing an unprecedented crisis of unemployment?

Chris Grayling: The coalition government inherited an economy teetering on the brink of bankruptcy, with unprecedented levels of debt, youth unemployment that had been climbing steadily since 2004, and a welfare system that paid people to stay on benefits. The recession clearly made the situation even worse but we can’t escape the fact that things were going badly wrong before 2008.

Jenny Willott: No. Unemployment, particularly among young people, is a major issue facing the UK economy, but we are not in the same sort of crisis as we saw in 1982. During the 1980s the government failed to bring in the investment and stimulus to boost the private sector and create jobs.

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Martina Milburn: Youth unemployment is at its highest level since records began. There are enough unemployed young people in Britain to fill every football stadium in the Premier League, with 200,000 left queuing outside. This untapped potential is a tragedy for our young people, but also for our economy.

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Danny Dorling: Britain is facing an unprecedented crisis of youth unemployment. Those categorised as Neets [“not in education, employment or training”] currently exceed those who could sign on under the age of 25 in 1984, the previous high.

David Blanchflower: Unemployment has not increased to the extent that many of us feared, and much less than in the United States. What has happened is that employers have cut wages and reduced hours. But unemployment is going to rise: the question is by how much. Youth unemployment is about to hit a million and unemployment rates even for recent graduates are around 20 per cent. The worry is that spells of unemployment, especially long ones, will scar them.

Mark Lovell: No. There are similarities and differences from the last two recessions. The scale is not dissimilar, but the pattern of job losses is new. This recession started in white-collar services before spreading to other parts of the economy. Coupled as it is with common global unemployment issues – among young people, for example – there is a very different dynamic at work.

Liam Byrne: It is a matter of huge concern that, 15 months after the recession ended, unemployment has hit a 17-year high, with youth unemployment at record levels. Unemployment should be falling. Instead, there are five unemployed people chasing every job vacancy that is advertised.

Q: What is the most effective strategy for tackling the current levels of unemployment?

CG We have to get the economy growing again, and ensure it is driven by the private sector. Only by creating an environment in which businesses can flourish and create opportunities can we really tackle this.

JW: Rebalance our economy so there is less reliance on the public sector, allow businesses to thrive by cutting unnecessary regulation, and provide training and skills for young people excluded from the job market.

MM It is hugely important to tackle entrenched youth unemployment. Government, charities and employers must work together to provide long-term support so that young people can escape unemployment for good.

DD: The most effective strategy is to reduce income at the top to free up money to employ more young people at the bottom of the pile. A maximum 20:1 pay ratio should be part of any public-sector contract with the private sector.

DB: Slow the deficit reduction; reverse the VAT increase; remove the National Insurance rise and introduce a two-year holiday for NI for anyone under 25; restore the Future Jobs Fund and the Education Maintenance Allowance; and increase the number of university places.

ML: Better integration of learning, skills, employment and welfare investment; a more coherent focus on job creation; and a plan to tackle levels of personal debt.

LB: Britain urgently needs a plan for jobs and growth. Without growth, the new welfare changes will push people not into jobs but on to benefits, and the welfare bill will rise. You can’t let youth unemployment take hold.