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20 September 2012

The coalition is wrong to be complacent about unemployment

The latest fall in unemployment becomes a rise if you take out the massive drop in London.

By Liam Byrne

The DWP select committee has given its verdict on the government’s much-heralded Youth Contract. And it’s not good news. The scheme compares poorly to previous projects and is in danger of missing its targets. You might not be surprised – after all there are still over a million young people out of work and long-term youth unemployment has more than trebled in the last year. You hardly need a report to tell you things aren’t going well.

So why is unemployment falling? What is going on behind the headlines? Well, closer study of the figures reveals that new employment minster Mark Hoban was perhaps a little rash to describe the state of the labour market as “very encouraging.” What we are really seeing is that in great swathes of the country Britain’s jobs crisis is becoming deep set. For Britain’s women, there has been no let up – women account for 80% of the rise in long-term unemployment since the election. And our construction industry, a sector we need roaring back to life if we are to rebuild Britain, has seen nearly 120,000 jobs wiped out since the election. Whilst in eight out of twelve regions across the country , unemployment is higher than it was in May 2010.

In fact, the latest fall in unemployment becomes a rise if you take out the massive drop in London as it prepared to host the Olympic Games. Even for those in employment, the glass is emptier than you might think. Two-thirds of the increase in employment since the election is due to a rise in people becoming temporarily employed, or working part-time – now at record highs. And that rise is almost entirely down to people who would rather be in full-time work. They are being forced to take part-time jobs because no full-time jobs are available.

So how do these figures square with ministers’ claims that their flagship Work Programme is doing the job? Well the signs aren’t good – earlier this year DWP downgraded its projection for their flagship scheme by almost half. The sad truth is ministers refuse to tell us how they are getting on. The figures remain tethered behind a depressingly familiar wall of secrecy along with the truth about their Youth Contract and the blueprints for the increasingly beleaguered Universal Credit. David Cameron once told us that sunlight is the greatest disinfectant, but if something is rotting in DWP, it seems ministers aren’t ready for the cure.

The time for secrecy and excuses has long past. Britain desperately needs a change of course. We are now in the longest double-dip recession since the Second World War,  the government’s failing economic plan has pushed borrowing up by a quarter already this year and programmes to get people off benefits and into work seem to be stuck in neutral. The select committee’s report should act as a wake-up call. Thanks to research done by Acevo we know that today’s youth unemployment emergency is set to cost our country £28bn in the coming decade – that’s money we can’t afford to waste.

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We now need decisive action – not more tinkering round the edges. Ministers should listen to the International Labour Organisation and urgently bring in a jobs guarantee, like Labour’s Real Jobs Guarantee. They should pay for it with a sensible tax on bankers’ bonuses and create a fund that’ll help us get 100,000 young people back to work.