Clegg recycles job scheme as youth unemployment gets toxic

THE GOVERNMENT has announced a £1bn scheme to tackle youth unemployment. Deputy Prime Minister Nick Clegg says the 'youth contract' will create 400,000 work and training placements over three years by offering subsidies of £2,275 to employers to take on young people. But is this just a recycled job scheme, and where is the money coming from?
 
Real private sector jobs
The scheme tackles job creation on a scale Nick Clegg says the country hasn't seen for a long time. He told BBC News: "The key thing is to make sure young people aren't left isolated, cut off, sitting at home wondering what's going to happen to their future."
 
Apprenticeships or work experience help break the cycle of being demoralised and cut off, said Clegg. And the subsidy of up to half the basic wage (for six months) "will last, because they are jobs in the private sector".
 
Cut the minimum wage
Clegg is concerned that more than a million 16-24-year-olds are not in employment, education or training. "So am I," says Eamonn Butler on Adamsmith.org, "but another Gordon Brown-style government initiative is not the way to get young people into work."
 
What we need, says Butler, is to reduce the cost and the risk that employers face when taking on young people. "We need to get rid of the minimum wage, which is pricing young people out of starter jobs."
 
It's the Future Jobs Fund revisited
A year ago, the coalition scrapped the Future Jobs Fund, says Patrick Butler in The Guardian. "Axing the £1bn scheme, ministers derided it as an outmoded, expensive vanity of the Big State."
 
Why is a similar scheme being resurrected a year later, asks Butler. Because headline figures of 1 million young people out of work are becoming an embarrassment for the coalition. "The pressure on ministers to address - or being seen to address - this increasingly toxic issue, is becoming difficult to ignore."

Where's the money coming from?
How will the scheme be paid for, asks Gavin Kelly in the New Statesman. Assuming the rumours are correct, then the money will be found by the decision not to up-rate tax-credits in line with inflation. "Which is odd, iniquitous, and revealing all at the same time."
 
The knee-jerk response of ministers when pressed to find resources for a new funding pressure is to take it from families getting tax-credits, says Kelly. But there are alternatives, such as Labour's suggestion of a tax on bankers' bonuses, or reductions on affluent pensioner subsidies. "Youth unemployment could be tackled without a further unnecessary squeeze on low-to-middle income Britain."
 
When forced to choose between squeezing the rich and squeezing the poor, the Chancellor squeezes the poor, blogs George Eaton also for the New Statesman. Clegg's jobs scheme, which is just the Future Jobs Fund with minor differences, "will be balanced on the backs of the least well-off". ·