Rishi Sunak Isn’t Interested in Helping Young People – Free Labour Is Good for Business

by Ellen Clifford

22 July 2020

The chancellor’s mini-budget 2020 pledged billions for paid work experience, traineeships and apprenticeships for under-25s. But it isn’t what it seems.  

Under the pretext of helping unemployed young people into work, Rishi Sunak has placed a chain around their necks.

Ahead of the official announcement, the press was full of Sunak’s plan to invest billions “to create more jobs for young people”. Only hardened campaigners against welfare reform seemed to notice – or care – that the measures include the expansion of existing workfare schemes, where unemployed people are forced to work in exchange for benefits, severely undermining workers’ rights in the process.

As with almost every measure the Conservative government has implemented since the onset of the pandemic, businesses will benefit under Sunak’s new measures, while positive outcomes for benefit claimants and workers hit by the economic consequences of Covid-19 are far less certain.

Moreover, the proposals can be seen as a response to Black Lives Matter, a global protest movement that has in part been made possible by the large number of young people out of work, who, perhaps for the first time ever, have had adequate time to engage in politics.

The sharpest ever rise in unemployment.

A recent report by the Learning and Work Institute found the recent rise in unemployment to be the sharpest ever seen and suggested it could reach its highest level since the Great Depression of the 1930s. One in three working-age adults is now either unemployed, furloughed, or supported through the self-employment income support scheme, according to the report. The gradual withdrawal of the job retention scheme could also prompt a ‘second wave’ of unemployment, with as many as 8.9m furloughed workers unable to go back to their jobs.

A number of recent reports suggest that young people are likely to bear the brunt of Covid-19’s economic impact. Before the outbreak, young workers were more likely to be employed in sectors such as hospitality, retail and leisure, which have been badly hit by the lockdown. Young people are more likely to have been furloughed than older employees, and a quarter of a million more people aged under 25 claimed unemployment benefits between March and May 2020. The Resolution Foundation suggests the pandemic could push youth unemployment over 1m.

In this context, it is easy for Sunak to carefully frame his measures in terms of ‘job creation’. But a more accurate description would be the provision of free labour in the interests of business.

Empty promises.

At the centre of Sunak’s measures is a £2bn ‘kickstart scheme’, which will create hundreds of thousands of six-month work placements for those aged 16-24, who are on universal credit and judged to be at risk of long-term unemployment. Placements arranged through the kickstart scheme will be paid, the chancellor was keen to point out, with the government covering 100% of the national minimum wage for 25 hours a week per placement, plus employer national insurance contributions.

The key thing that differentiates the kickstart scheme from workfare is that participants will be paid. But we have no information yet as to whether take-up of placements will be mandatory; in other words, if claimants will have their universal credit benefits stopped if they opt-out. 

The chancellor also stressed that placements will be ‘good quality’ but will not be in addition to existing jobs. The extent to which it is possible to be sure of this is questionable. In the current economic climate, it seems likely that employers will let more jobs go if they can replace them with government-funded labour. Furthermore, placements paid at the minimum wage could undermine workplace victories where workers have fought for and won a living wage.

History tells us that placements will not lead to permanent jobs. The kickstart scheme is essentially a re-run of New Labour’s ‘future jobs fund’ launched in 2009 to address unemployment following the financial crash. Employers were paid £6,500 for each long-term unemployed worker they took on for a minimum of six months. The experience of many claimants was to find their positions terminated as soon as they reached the six-month mark.

Meanwhile, less attention has been directed towards the rapid expansion of existing DWP initiatives. £111m has been pledged to triple the number of traineeships for young people aged 16-24, and £17m to almost triple the number of work experience placements in ‘sector-based work academies‘.

Unlike kickstart placements, traineeships are unpaid, but employers will receive a cash incentive. As welfare reform blogger Frank Zola comments: “For the first time, employers will not only get free forced-labour, but they will get £1,000 per trainee”.

The government has now enlarged the criteria to include claimants with a university diploma or an “advanced apprenticeship”, which sits oddly with the purported aim of traineeships, of “[getting] you ready for work or an apprenticeship”.

Work academies placements are also unpaid. Claimants will have their benefits sanctioned for not attending ‘training’ elements or for behaviour judged to constitute ‘misconduct’. This can be particularly problematic for disabled claimants, whose impairment-related behaviours and support needs are not understood.

Ideology and Resistance.

Throughout the pandemic, the Conservatives’ primary economic concern has been how to support business, with little to no regard for public wellbeing. Loans for businesses were announced in early April. It was only under pressure that the government followed up with the job retention scheme in mid-April and finally the self-employment income support scheme on 30 April.

The Tories’ current drive to tackle youth employment lacks any explanation of how the newly announced measures will produce new jobs. Meanwhile, there are clear benefits for employers, to the detriment of paid workers who will potentially lose out.

There is another angle to this sudden concern for young people. The vibrant Black Lives Matter movement that has swept the globe during the pandemic is testament to the energy that can be put into political activism once the shackles of the daily grind are removed.

Young people are also statistically far less likely to vote Conservative. Conditionality and sanctions are favoured by the government, not because they have any discernible impact on employment outcomes, but because they are a way to discipline workers both in and out of work at the same time.

What better way to tame the militant spirit of Britain’s youth than to tie them into enforced labour in minimum wage jobs that may be a mile away from their dreams for the future? Research shows that around half of those in low-quality jobs get stuck in them. The mental health risks of low-quality jobs are also well known.

Reactions to the mini-budget from Labour and the Trades Union Congress have been disappointing, calling for greater action while taking the government’s empty commitments towards young workers at face value.

The Coalition government’s workfare programme was left in tatters by a co-ordinated resistance. Once again, it looks as though it will be left to grassroots activists to expose the spin and stop the profiteers from exploiting free labour. 

Ellen Clifford is a disabled activist and author of The War on Disabled People: Capitalism, Welfare and the Making of a Human Catastrophe.

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