Monday 31 August 2009

And you thought the Tories won't be as bad as the other lot ...

From Sky News, Sunday Live

CHRIS ROBERTS: Labour at the moment are promising, and there is a big announcement on this coming up I think this week, that every young person aged between 16 and 24 who has been out of work for at least ten months I think it is, will be guaranteed a job.

THERESA MAY: What they are going to do is guarantee them a place in training or in work of some sort for a short period of time. Now what we want to do …

CHRIS ROBERTS: So it’s a con are you saying?

THERESA MAY: Well no, what I’m saying is I hope it won’t be, I hope that what it will be is something that will help those young people then get in to sustainable work.

CHRIS ROBERTS: So what could you guarantee all those 16 to 24 year olds, how many of them, 17% of them out of a job isn’t it, something like that?

THERESA MAY: Yes, well one of the things we’d do for example is introduce a 100,000 new apprenticeships each year, that would be providing opportunities for those young people. We would set £100 million aside as a fund for the NEETs, the young people not in education, employment or training, specifically to be supporting them to get them into the work place.


How on earth is the government, of whatever party, supposed to "introduce apprenticeships"? They seem willing to chuck another £100 million of taxpayers' finest at it, but wouldn't it make a bit more sense to take a step back and look at what caused the problem first?

1. The whole welfare and tax systems are geared up to discourage this sort of employment, i.e. you lose Child Benefit (£13 a week for second and subsequent child) and Child Tax Credits (up to £43 a week) and the Education Maintenance Allowance (up to £30 a week) unless your child is in a certain narrowly defined type of training, which makes the whole exercise pointless for a proper NEET from a low income or workless family.

2. Maybe "apprenticeship" will be on the list of jobs which don't make you lose these benefits - in which case I see massive opportunities for fraud. Why not have apprenticeships in shelf-stacking or table-wiping? If the employer knows the market rate is £120 a week but if they fill in all the forms properly, they can get away with paying £34.

3. The whole PAYE system and Elfin Safety malarkey discourages employers from taking on low paid employees, of course, but for low paid apprenticeships, the actual tax wedge is probably not that big.

3. I suppose we ought to mention immigration at this stage - the wages that e.g. East Europeans are prepared to accept is often lower than what native Brits demand, firstly because they look at the value of those wages in terms of what they can save up for and buy once they return home; and the wages that native Brits demand are inflated by the fact that basic welfare is so generous and so harshly means tested, that as a rule of thumb, you have to earn at least £15,000 gross to be better off taking a job.

4. And right now, the immediate problem is that we are in a recession and unemployment is rising anyway, and until they are prepared to be honest about the root causes of the recession and deal with them accordingly, there's not much point tinkering with "apprenticeships".

Just sayin', is all.

5 comments:

Tim Almond said...

Apprenticeships belong with the same muddled-headed love for Manufacturing Industry.

Apprenticeships worked quite well when each town had t'factory, t'mill, private sector trade unions and employers had far more rights than they do today.

Quite a lot of apprenticeships used to involve someone actually paying an employer to give them an apprenticeship*. Now this worked out as a good deal for the employer. While it cost them in training costs, these got covered by the apprentice. Or in some cases, people would get the apprenticeship, get paid, but be expected to stay for a certain period of time. Or because you were the only employer with those skills in the town, you couldn't take them elsewhere.

We no longer live in an era of job from cradle to grave. And we are largely past the era of corporate time serving and into the era of self-improvement. It's so alien to everything that is big government that they can't make any difference.

The only 2 things government can help with adult education and skills and to give people back their taxes to give them more room to improve themselves.

Mark Wadsworth said...

OC, "The only 2 things government can help with [are] adult education and skills and to give people back their taxes to give them more room to improve themselves."

Amen to that!

Lola said...

It's just another weary 'oh my God' moment isn't it?

marksany said...

Benefit withdrawal rates is the issue keeping the jobless jobless. How do we get that through Ms. May's head?

Lola said...

...and don't forget the negative effect of the minimum wage.