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23rd October 2020

Gordon Brown proposes £100-a-week subsidy to combat youth unemployment

Former PM, Gordon Brown, has proposed an urgent plan to tackle alarming youth unemployment caused by the pandemic
Gordon Brown proposes £100-a-week subsidy to combat youth unemployment
Gordon Brown. Photo: World Economic Forum @Flickr

With the furlough scheme due to end this month, former prime minister Gordon Brown has urged the government to give employers a wage subsidy of £100-a-week to help workers under 25 find employment.

Young adults are being dubbed the “Lost Generation” or the “Covid Generation”, as research conducted by Bath University professor and leading labour-market specialist, Paul Gregg, has revealed that around 700,000 young people in the UK were struggling to find work this summer.

This figure includes 500,000 recent school leavers and university graduates, as well as a huge number of under-25s who lost their jobs as the result of the furlough scheme ending and widespread small business closures.

According to the former Labour leader, there are predictions that, in the coming months, unemployment could exceed 20 per cent in certain regions of the UK, such as the Midlands, Scotland, Wales, and Northern Irelands.

Brown cited the alarming results of Professor Gregg’s research, which showed that job losses as a result of the coronavirus pandemic were concentrated particularly among under-25s, as the grounds for his £100-a-week wage subsidy proposal:

“This report charts the arithmetic of deprivation and desolation as youth unemployment gets out of control and this will alarm every parent in every region and nation of Britain. Today we are dealing with a far bigger challenge than in the 1980s and it needs a UK-wide jobs summit bringing together the regions and nations with the prime minister.

“Some will say this is too difficult to organise given the current breakdown in relationships between No 10 and the regions and nations but if we do not listen to what is happening on the ground and mobilise all the resources of the whole of the UK – local and national – and work together to coordinate our response we will fail a generation of young people as surely as we did for too long in the 1980s.”

The former prime minister said the elements of a plan to tackle youth unemployment should include the following:

  • A wage subsidy for employers of £100 a week for six months to take a young person on full-time.
  • Provision of good quality work experience.
  • Training geared to new jobs, in sectors such as care, IT and logistics, jobs linked to the recovery from lab technicians and contact tracers, to care workers and teaching assistants, not training for continued unemployment.
  • Help with job searches – which Brown said were a vital element of getting into work, as demonstrated by Labour’s 2009 future jobs fund.

Gregg’s report indicates that up to 1.5 million young people could need help to find employment over the coming year, as youth unemployment levels approach highs not seen since the 1980s.

The former PM also claimed that the government’s £2bn ”kickstart” scheme would not be enough to overcome the all barriers for young people in the face of rapid job-losses during the pandemic.

The “kickstart” programme, was announced in September by Rishi Sunak and aims to create thousands of new jobs for 16- to 24-year-olds who are currently claiming universal credit. As part of the scheme, employers will be able to offer a six-month, government funded work placement for young people.

Mike Cherry, national chairman of the Federation of Small Businesses (FSB) said urgent action was needed to support employers to prevent a “lost generation of young people”:

“More must be done to ensure small firms have all the support they need to survive and then thrive after this pandemic.

“If more small businesses are unable to afford an apprentice, without the means to offer an industry placement for T-level pupils or provide a traineeship or kickstart role, we will be letting down the next generation.”

T Levels are an alternative to A-Levels which consist of 80% classroom work and 20% practical, including a 45-day industry placement.

When announcing this “kickstart” programme in summer, which would see £2bn of funding given to businesses to create 350,000 work placements for young people, Rishi Sunak said: “Young people bear the brunt of most economic crises, but they are at particular risk this time because they work in the sectors disproportionately hit by the pandemic.

“We also know that youth unemployment has a long-term impact on jobs and wages and we don’t want to see that happen to this generation.”

Brown claimed that the government’s current scheme would not provide high-quality work experience and would only help those who had been out of work for six months and were on universal credit, missing out a large proportion of recent graduates or the recently unemployed.

Anja Samy

Anja Samy

Editorial Advisor and Head of Manchester Media Group.

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