8. Statement by the Minister for Economy: The Young Person’s Guarantee

Part of the debate – in the Senedd at 5:13 pm on 16 November 2021.

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Photo of Luke Fletcher Luke Fletcher Plaid Cymru 5:13, 16 November 2021

As I've said before, the young person's guarantee is a welcome scheme. Plaid Cymru proposed a very similar offer during the election, so we have been keen to know further details to ensure it upholds young people's rights and promotes sustainable growth in the Welsh economy. It's good to hear as well that young people will be able to feed into this directly. I can't say it any more, I can't say, 'Do it with us', because, as of recently, I'm no long considered 25 and under. Sorry, Dirprwy Lywydd, I couldn't help but drop that one in there. But it's good that the Welsh Government is keeping to the principle that it's about doing it with young people and not to young people.

While the statement today appears to cover a variety of funding and investment into the guarantee, I am interested to have some further information from the Minister on the details of delivery. Firstly, the pandemic has disproportionately affected young workers in Wales. In 2020, under-25s made up a third of new universal credit claimants in the UK, and 47 per cent of jobs filled by under-25s were furloughed between March and June 2020, compared to an average of 32 per cent overall jobs. These figures confirm that younger people across the UK are in more precarious work than the general population. The Welsh Government should strive to change this through the young person's guarantee. How exactly do the Welsh Government plan to ensure employment offers within the guarantee have fair pay that matches levels seen before the pandemic and accounts for the rise in inflation? And while the statement, of course, suggests that the Government is increasing its focus on fair work and jobs, how will they work with businesses, trade unions and other bodies across Wales to ensure that the young person's guarantee is truly delivering high-quality fair work and awareness of employment rights amongst young people?

The young person's guarantee should provide economic opportunities for young people across Wales, while also serving local communities and small businesses. In 2019, small and medium enterprises accounted for 99.4 per cent of total businesses in Wales. If the Welsh Government delivered the young person's guarantee through the 'think small first' model, where local small businesses provide the jobs, apprenticeships and training opportunities to young people, then the wealth and wider societal and economic benefits generated by higher youth employment and improvements in human capital and knowledge can remain in Wales to the advantage of local communities, rather than being extracted elsewhere. SMEs and local businesses play a vital part in fostering a Welsh economy that works for all, which is why the Welsh Government should prioritise these types of businesses when matching young people to opportunities through the scheme. Would the Welsh Government consider implementing a 'think small first' model within the young person's guarantee and prioritise reaching out to SMEs?

I was also wondering if the Minister could provide some clarity as to how training and jobs-matching services in the scheme will work to target skills gaps and labour shortages and how this will tie in with promoting a greener economy and reaching net-zero targets. The Federation of Small Businesses have noted that a chronic skills shortage over recent months has impeded Wales's economic recovery. Labour shortages and skill gaps are prevalent through the Welsh economy, but are particularly prominent in sectors such as construction and hospitality. The FSB reported that 50 per cent of construction businesses have been struggling to recruit staff in trades like carpentry and bricklaying, while the Construction  Industry Training Board's labour market intelligence report estimated that an extra 9,250 workers would be needed in Wales between 2020 and 2025 without taking in net-zero considerations. Meanwhile, since 2016, we have seen the available construction workforce declining. How will the pathways and programmes within the guarantee, such as ReAct+ and Jobs Growth Wales+, target advice and training towards sectors experiencing these shortages while balancing out a variety of opportunities for all, and how will net-zero skills training and apprenticeships be prioritised within the guarantee to ensure opportunities provided are in line with the future generations Act?

And finally, and, unfortunately, as I highlighted with the Minister last week, between 2020 and 2021, the gender pay gap has actually worsened in Wales. According to figures from this period by Chwarae Teg, the Welsh gender pay gap increased by 0.7 per cent to a total gap of 12.3 per cent. This has resulted in there now being not a single local authority area in Wales where women earn more than men. To reiterate, women now earn less than men everywhere in Wales. Over the same period, men's hourly pay increased by 49p, while women's pay only increased by 34p. These figures go to show that progress towards economic gender equality is not guaranteed and Government intervention is needed to ensure women get a fair stake in the Welsh economy. With this in mind, how will the Welsh Government be working with businesses involved in the young person's guarantee to ensure young women are being offered opportunities with equal pay, and how will training and education in the guarantee support women to enter high-paying sectors where they are currently under-represented?