The Tory Kickstart scheme is a joke. We need a real plan to beat youth unemployment

Johnnie Hunter, YCL General Secretary & Challenge Editor

The Tories’ flagship ‘Kickstart’ scheme isn’t a subject that has received a great deal of coverage either in the monopoly media or in the labour movement since it was launched as part of the Summer Budget in 2020.

This lack of coverage and awareness might be surprising given that it is being touted as the Tories silver bullet to spiralling youth unemployment resulting from the pandemic. In fact, it is really their only significant policy in terms of youth unemployment.

But there is a good reason you probably haven’t heard much about it since the scheme was launched. Despite all the government spin, it has been a complete failure.

The government boldly claimed a month ago, when questions were starting to be asked about the actual impact of the scheme, that 120,000 jobs had been created for 16 – 24 year olds through Kickstart.

Even if that number were true, which it isn’t, that would only be a start in addressing the scale of youth unemployment in Britain. In reality, Sunak’s scheme has only created 2,000 jobs since September, about 13 a day. The Tories claim there have been more than 100,000 “successful applications” under the scheme, but almost all of these are yet to translate into actual jobs. Whether they actually will very much remains to be seen.

At the same time almost 300 more young people are jobless every day. The maths aren’t hard – especially for an Oxford PPE graduate like Dishy Rishi.

So what’s wrong with the Tory Kickstart Scheme – and even more importantly what we can do about it and what should the left be fighting for?

Youth unemployment in Britain

Its important to remember that according to the government’s own statistics, UK unemployment has risen to the 5% mark, over 1.7 million people, but the Bank of England estimates the real figure is closer to 6.5%. Bourgeois economists all agree that we can expect this to increase markedly over the next few months, potentially to 8 – 10%.  Even these damning statistics are calculated in a conservative manner and the actual unemployment rate is liable to be higher.

Young people have been among the hardest hit by job losses during the pandemic. According to the most recent statistics, youth unemployment (16 – 24) specifically is sitting at just below 15%. We can expect this to have risen sharply in the recent period with seasonal workers being sacked. Based on the government’s own projections then, we could feasibly see youth unemployment hitting 20% in the next few months.

For everyone then, apart from Britain’s ruling class and their Tory Party it seems, its clear that youth unemployment is already at epidemic levels and is set to continue to spiral to rates not seen since the 1980s and perhaps beyond.

What is Kickstart?

So what does the so-called Kickstart Scheme actually involve? The £2 billion scheme offers employers funding to create job placements for 16 – 24 year olds on Universal Credit. Employers can apply for funding which covers:

  • a £1,500 lump sum for every ‘job placement’
  • 100% of the minimum wage (rates depending on the age of the participant) for 25 hours per week for a total of 6 months.
  • all employer national insurance contributions.
  • all employer minimum automatic enrolment pension contributions.
  • funding is also available for training and support.

Employers can spread the start date of the job placements up until the end of 2021. There is currently pressure from Labour and sections of business to extend this deadline.

Initially and importantly a Kickstart Scheme application had to be for a minimum of 30 job placements. So if a single employer couldn’t offer 30 job placements then they were forced to club together with other firms and organisations for a join application to make an application, or, as was more likely, not make an application at all.

With this requirement it became clear that the scheme was designed to be used and abused by big business and monopolies far more likely to be employing 30+ at one time. Rather than where it is actually needed, locally and regionally based small (less than 50 employees) and medium businesses (less than 250 employees) who employ over 60% of workers.

What stepped into this Tory made breach, as ever, were opportunist and even fraudulent so-called ‘Gateway’ firms who were allowed to charge a £300 fee plus up to a further £1,500 for each job placement – apparently for nothing other than grouping together applications. Amid the general failure of the scheme, it emerged that over 600 companies had registered as Gateway firms, some which had no trading history, were registered with a g-mail address, had accounts of less than £100 or were registered abroad.

It was only embarrassment at allowing apparent fraud and significant pressure from regional politicians and third sector groups that forced the Tories to remove this requirement. But even with the government concession the Tory scheme is still fundamentally flawed and is doing nothing to address the crisis young people are facing.

Will Kickstart help young workers?

Ideologically, Kickstart has got many of the hallmarks of David Cameron’s ‘Workfare’ Scheme in terms of the narrative of the poor and undeserving poor. Rather than a targeted investment in meaningful and sustainable work with a view to smashing unemployment, the Tory approach intends to see young people on Universal Credit being forced into whatever exploitative set up big business comes up with.

For the young people who take up these ‘placements’, the state funding only lasts for 6 months. After this point it’s entirely predictable that they will be sacked, probably to be replaced by a further taxpayer funded placement. The government haven’t produced any studies or evidence to the contrary or which support a long term positive impact from the scheme.

There’s no evidence that this will induce more people to start looking for work – they already are. The draconian sanction regime instituted by the Tories in the benefits system ensures that millions of workers young and old are desperately searching for jobs that aren’t there – a reserve army of labour.

The Kickstart Scheme won’t do anything to tackle this. It doesn’t address multigeneration unemployment and poverty in any way. Its not just an empty gesture given the scale of the problem of youth unemployment in Britain, a problem the Tories and Britain’s ruling class are unwilling and unable to address. KickStart also reveals the real priorities of this government: shoring up private profit by providing free access to labour for big business and international monopolies, reinforcing negative trends in employment, increased casualisation and unemployment as a means to keep wages down. And of course, corporate cash handouts wherever possible.

What else is wrong with Kickstart?

Much like with the Tory’s flagship apprenticeship scheme, the uptake has been pitiful. The Tories promised this would create 250,000 jobs but 6 months on we’ve seen only 2,000 odd jobs actually created.

When the scheme was launched last summer, the YCL pointed out that the £2 billion fund is less than a drop in the ocean compared to what is really needed. Let’s bear in mind that by comparison £1.3 trillion (£1,300,000,000,000) was paid to bail out the banks in 2008. Clearly the lives and futures of millions of young people are worth next to nothing for Britain’s ruling class.

At that point youth unemployment stood at least 10.9%. There were well over 500,000 unemployed 16 – 24 year olds. On those numbers the £2 billion fund amounted to less than £4,000 for each unemployed 16 – 24 year old in Britain. That would have scarcely covered the wage cost if every young worker employed under the scheme was paid the under 18 rate of £4.55 per hour – never mind those on the higher 18 – 20 and 21 – 24 year-old rates. That’s not even taking into account the £1,500 lump sum per job placement, all the other associated employment costs and the duration and cost of running the scheme itself.

Since then youth unemployment has increased by around half – up to 15% with scope to hit 20% in the near future – with no increase in funding. So to begin with the scheme is critically underfunded and dwarfed by the scale of the problem and the situation has only gotten worse since the summer.

The scheme rules say that it can’t be used to replace existing posts or planned vacancies or cause other employees to lose hours. That all sounds good and well. But there is zero explanation of how that will be policed. As we’ve seen with government’s furlough scheme we can expect a free-for-all from bad bosses with no oversight from the government or HMRC. You can guarantee that bosses up and down the country aware of this scheme will be eager to manipulate it to reduce overheads and attack pay and conditions.

So in addition to the obvious risk of corruption and fraud (not from the scheme itself by the lack of oversight), Kickstart, if it ever starts to create significant numbers of placements, will undoubtedly contribute to redundancies. It will undoubtedly be used to undermine pay and conditions for existing staff – pitting young against old. It will undoubtedly contribute to reduced growth of full time, well paid posts. It is absolutely disingenuous of the government and other advocates of the scheme to suggest otherwise and the labour movement has to call this out.

What should we be fighting for?

We need real policies to tackle the epidemic of youth unemployment we’re facing, an epidemic that’s only set to get worse in the coming months. The YCL’s Youth Charter has a clear set of policies to address this crisis and win a future worth living for for young workers and student in Britain. We’re calling for:

  • A new government backed apprenticeship system focused on real skills and real jobs with a real living wage and day one trade union and employment rights.
  • A statutory right to an apprenticeship or a two year work placement for all school leavers up to the age of 25 with a real living wage.
  • To make these new jobs possible we need public ownership and investment in utilities and key industries to rebuild Britain’s economy.

These bold policies would enable the creation of hundreds of thousands of quality sustainable jobs across Britain, with targeted investment to provide a bright future for young workers and their communities. We need the return of a genuine apprenticeship system which provides a real option for young workers in addition to further and higher education.

We need to beat the Tory tactic of using youth unemployment and desperation to undermine pay and conditions and the position of other workers in secure better paid positions. Bringing about the end of division and exploitation of workers based on age will make an immediate and substantial improvement to the lives of millions of young people, undermine the hand of the bosses and strengthening the ability of the trade union movement to fight for gains for all workers. That’s why we need to fight for:

  • A real living wage for all workers of at least £10 per hour plus a London weighting.
  • An end to pay differentials for workers under 25 and age discrimination in pay.
  • A ban on zero hours and non-permanent contracts, day one employment rights and the right to equal treatment with permanent and full-time workers.

These are bold, popular policies, proportionate to the scale of the crisis young workers and students across Britain face. These are the concrete policies we need to tie into the fight for full employment and a shorter working week.

How do we do it?

The trade union and student movements and the left have to completely break with neoliberal economic thinking. We’ve fallen into the trap of thinking that constantly have 2 or 3 million unemployed in Britain is a ‘normal’ state of affairs. Its not normal. Its inhumane and barbaric. It relegates entire communities and families to desperation, poverty and alienation.

The Communist Party and the YCL are determined to demand better and fight for a real solution to the crisis and for full employment in our communities.

The Communist Party’s Unemployment Fightback pamphlet sets out the demands of a People’s Plan for jobs and justice as we battle and emerge from this pandemic.  You can be certain the bosses and their Tory Party will seek to use the crisis to enforce further austerity and attack jobs and living standards. We need the left and the labour movement to rally around a radical programme for jobs and bring the fight to the Tory government.

In the first instance we have to win these arguments in our trade union branches and conferences and within university and national student organisations. We need to clearly articulate the arguments that these policies aren’t just possible, they’re desperately needed and in fact far more cost effective than the billions in corporate handouts the Tories are determined to dole out to their friends in big business.

Fundamentally, these arguments for full employment at a local and a national level lead to the broader questions about democracy, control and in whose interest the economy functions – or is supposed to function. Monopolies and big business or working people and the youth? The policies required to tackle epidemic youth unemployment and deliver full employment inevitably lead to the conclusion that we need to fight for the alternative economic and political strategy, outlined in our Party’s programme Britain’s Road to Socialism.

For our part, Britain’s Communists will be putting these policies front and centre in the electoral campaigns being fought all across Britain this spring. In elections to the Scottish Parliament, Welsh Senedd, Greater London Authority and English councils, Communist candidates will be fighting for a real strategy to beat COVID-19 now and for a post-pandemic recovery that prioritises working people and puts full employment first.

Each and every branch and member of the YCL will be putting the fight against unemployment at the heart of their community work. Campaigning in the so-called unemployment ‘blackspots’ across Britain, making the case for community led action and investment to create good jobs and strong communities.

The ruling class hasn’t lacked any imagination in terms of the attacks it has been prepared to make on working people over the last decade. It is time we took the gloves off and started our own fightback.

.

Johnnie Hunter
General Secretary
Young Communist League

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