Share the blame if jobs plan fails

It was expensive, badly targeted and did not work.” Former UK prime minister David Cameron did not mince his words about the most recent youth employment scheme set up in a recession. That has not deterred the current Conservative government from the same gambit, only three times bigger. The success of the “kickstart” job scheme is far from assured. Business, which taxpayers have supported through the pandemic, will share the blame if it fails.

The £2bn initiative announced by chancellor Rishi Sunak on Wednesday will create six-month work placements paying the minimum wage for hundreds of thousands of people aged 16-24. Without this, youth unemployment is expected to reach record levels.

Will Sunak’s scheme work? The record of the 2009 Future Jobs Fund is more encouraging than Cameron implied. After two years, the participants were 11 percentage points more likely to be in unsubsidised jobs. The snag was that hardly any of these were in the private sector.

That feeble showing was not entirely the fault of companies. A government worried about EU state aid rules imposed rigid criteria. But employers do have a history of holding back, and they may plead other priorities, including the aftermath of Covid-19 and Brexit.

Moreover, the sectors most likely to employ young people have been hardest hit. A fifth of under-25s work in the accommodation and food sector or arts, entertainment and recreation. Sunak’s announcement of extra help for hospitality and tourism is well judged.

Such largesse underlines a broader point. The relationship between the government and business has changed. The exceptional support provided by the treasury during the pandemic has created reciprocal responsibilities. This time, the onus is on businesses as well as politicians to make the plan succeed. /London, July 8

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