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Credit to young workers

We’re getting a few hints of what to expect in the “Back to Work” White Paper due to be published along with the Chancellor’s pre-Budget report on 9 December. Yvette Cooper, Work and Pensions Secretary, told Andrew Grice of the Independent that the new package will offer those signing on the dole improved incentives to become self-employed. At the moment, someone has to be unemployed for six months before getting the chance to apply for a £50 a week self-employed credit which they can claim for 16 weeks. The new plan is to offer this from day one of signing on. Alas, it’s not quite as good as the headline on Andrew Grice’s piece suggests.

There is no £800 lump sum and the claimant will get just £50 a week as now, and only for 16 weeks.

The credit was first introduced in April 2009 as part of the “Six Month Offer” and New Deal of the Mind questioned then whether this was sufficient time for someone to get a small business up and running. Now it seems the Secretary of State has been hearing from claimants, women in particular, that they have been reluctant to embark on freelance or small business ventures until the six months dole period is up. Fewer than 1500 had taken up the credit by October. Cooper has also indicated that the new arrangements would include better help and advice on becoming self-employed.

I’m not convinced that there is sufficient change here to have any great impact on the apalling youth unemployment figures. It would be good to see the DWP go much further on 9 December, for example for the cultural sector by specifically encouraging young artists, musicians, designers to get going with small business start-ups. And by offering genuine incentives for young people to try setting something up for themselves. There seems no reason for the weekly payment to the would-be self-employed to be pitched at less than the weekly dole (18-24 year olds get £50.95, 25+ get £64.30) especially if there is to be no up-front payment. Secondly, the scheme needs to be widely popularised and advertised. In NDoTM’s July 2009 report to the Arts Council Creative Self-Employment in Hard Times we noted that though it was too soon to judge its success, the self-employed option had “not enjoyed a high profile and there is virtually no public awareness that this option exists”. (This remains the case: try searching for “self-employment credit” on the DWP site).

We hope the Culture Secretary will put pressure on his cabinet colleagues to make sure that Job Centres are geared up to help young people with their sights set on careers in the creative sector. What Government does now will have long-term consequences. All the evidence points to the dependence of the UK economy on innovation and creativity. Both are crucial to all business, as Nesta’s recent report on innovation demonstrated. With one in five 16-24 year olds seeking work, vital talent is being squandered. The self-employment arrangement must not be a mere ruse for reducing dole numbers. It has to be part of a joined-up strategy for getting young people innovating, inventing and creating.

Last Saturday, 1,000 young men and women marched through London to protest about government inaction over the high rate of youth unemployment. The demo was organised by Youth Fight for Jobs, which campaigns for a government job creation programme, a minumum wage of £8 an hour and an end to cheap or unpaid apprenticeships. Sean Figg, spokesman for the group, said on the demo: “There’s all sorts of socially useful work that could be created and that’s why we are here today.” He’s right but it’s not just a question of creating jobs. If today’s new graduates are given the chance to get started on what they really want to do, they will repay the “debt” many times over.