Give the young jobs, Clegg begs businesses

By Alex Stevenson

Nick Clegg is appealing to Britain's businesses to take on more young people as the coalition continues to face a bleak economic outlook.

The current quarter is set to be the most difficult for the jobs market since the recession, the Chartered Institute of Personnel and Development (CIPD) has warned, on the day the deputy prime minister asks UK firms to sign up to the government's youth contract programme.

Mr Clegg's letter to British companies asks them to take on more 18- to 24-year-olds in return for cash. Employers will receive £2,275 for every unemployed young person they add to their books.

But they will have to wait six months before accessing the cash. Only smaller firms will be able to receive initial payments after just eight weeks.

"Getting young people earning or learning is my top priority, and that's what the youth contract is going to do," the deputy PM pledged.

"This is a long-term boost to help business get young people into jobs before long-term damage is done.

"This is a significant moment and a call to arms for businesses to offer long-term opportunities to young people who are out of work."

Ministers will be hoping their £1 billion youth contract programme can make a difference to the jobs market, which saw overall unemployment rise to its highest level since January 1996 in the three months to November last year.

The CIPD's labour market survey blamed falling private sector confidence for worsening overall employment prospects.

It said its prediction that unemployment could reach 2.85 million by the end of 2012 had only been reinforced by the findings.

"Whereas employers were in 'wait and see' mode three months ago, more private sector firms, particularly among private sector services firms, have decided to push the redundancy button in response to worsening economic news," the CIPD's public policy adviser Gerwyn Davie said.

"This will exert yet more pressure on a jobs market that is buckling under the strains of contractions in economic growth and public sector employment.

"The fear is that these existing pressures, which include a widening chasm between the employment prospects of those in the north and the south, will become greater still if business conditions do not improve in the next few months."

Influential employers' group the CBI offered a note of optimism that the economy would improve.

It said the UK would avoid a double-dip recession by registering positive growth of 0.2% in the first and second quarters, before seeing further improvements in the second half of the year.

Despite its upbeat assessment it predicted that unemployment would peak at 2.9 million in 12 months' time, however.

"Although risks remain we expect growth this year, improving modestly in 2013, primarily driven by positive net trade and business investment," CBI director-general John Cridland said.

"The pressure on household incomes will also ease slightly in the second half of this year as inflation falls, resulting in a slight increase in consumer spending.

"But weak wage growth and high levels of unemployment will continue to be a brake on household spending."

Government officials hope the 'wage subsidy' offered by its youth contract scheme will make a difference. The initiative is creating at least 20,000 extra incentive payments worth £1,500 for each young person taken on as an apprentice and a 'wage incentive' of £1,137.50 for young people employed for between 16 and 29 hours a week.

"Our primary goal is to get young people into employment," employment minister Chris Grayling explained.

"With the wage incentive we are encouraging employers to take a chance on a young person who otherwise may have been looked over for a lack of experience or skills."

The government is also offering weekly sign-on meetings, rather than fortnightly sessions, and offering more time to talk to advisers.