James Max - James Max is a broadcaster, columnist and business expert

We must solve the problem of youth unemployment

Youth unemployment has hit 991,000 in the UK. It’s very bad news. However politicians of all sides should stop the rhetoric and start with action.

Before we can work out the right plan to get people back to work, we had better understand what’s going wrong.

You cannot put every youngster who is out of work into the same box. Some are highly articulate individuals with drive and motivation, skills and ambition. Perhaps without experience. Some have aspirations beyond their capabilities. Others have been let down by the educational system, or perhaps their families and, dare I say it, by themselves. However this is not a blame game. I don’t really care if Labour built schools but failed to worry too much about what was going on within their walls. I cannot even be fussed to argue about the higher educational system that pretended to educate people to a higher level but in some instances merely delayed the inevitable. In general terms we have an educational system that works and a university system that, in the large part, is excellent. Six in seven youngsters have work. One in seven do not. It would seem, therefore, that perhaps one seventh of our system is broken – rather than the whole lot. However that’s merely an observation and not the solution.

Of course there are educational and social issues to tackle. Unemployment is here now and longer-term policies, whilst important must be supplemented by short-term measures.

We are where we are.

So. What’s to be done? The most immediate battle is to assist the private sector to generate jobs and take on more staff. They will only do that if incentivised to do so. A radical reform of work based legislation needs to be undertaken immediately. A removal of the shackles of employing people needs to be put in place. We also need to have a more fluid workplace so that those who don’t perform are easier to remove. Sounds harsh but if we want to reduce our unemployment levels, tough decisions have to be taken.

Yet that’s only the first step. Tax breaks for those seeking employment. Not only do we need to be harsh on those claiming benefits unnecessarily, but also we need to ensure that it pays to work. How about tax breaks for companies sponsoring apprenticeships and education? What about travel benefits for those who are on a training course or apprenticeship? All these measures, if put in place and simple to administer will actually cut government spending.

In essence we are going to have to become used to higher levels of unemployment. At least in the medium term. Particularly in the months following the summer when so many leave school or university. Lower wages and less money in our pockets will punctuate this decade. It’s not the kind of economic outlook that I would wish for. However if we want to generate new economic activity, private business is the place to start. Of course self-employment, entrepreneurial spirit and other incentives would help. Spending on government initiatives and jobs won’t. To spend and tax our way out of this mess isn’t the answer. To undertake social reform and radical, ideologically driven and centralised policies won’t work either. They never did work

in anything but the short term and it’s about time we learnt from mistakes made in the past.

In essence the longer-term solution will be to fix the educational system where it has broken. That will take time. University courses will require more vigour and determination to ensure that they deliver to students real and tangible skills, knowledge and expertise. Employers require legislation that encourages them to employ people and train their staff.

In the short term we need radical action. Temporary but meaningful tax breaks and experimentation with legislative changes combined with the cutting of red tape and bureaucracy.

Yet there is more to all of this. Britain has lost its way. We have some incredible companies and talent. Yet we don’t celebrate successes. Profit and reward appear to be dirty words and companies are so bogged down in the quagmire of compliance and regulation that an ability to be entrepreneurial and invest has been extinguished.

We are in a global marketplace. We will have to work harder, study harder and invest more if we are to emerge from this recession. Yes, pay down debt but also invest in the future. Investment isn’t just money either. It’s about confidence and sentiment too.

We can work our way out of recession. Government doesn’t need to have all of the solutions but it must allow and encourage private enterprise to do the work for them.

At the moment it’s too complicated and too expensive to take a risk. Risk takers require reward and not punishment.

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