Nine years ago, Tony Blair and Gordon Brown promised “work for those who can (and) security for those who cannot”. Since then, record numbers of people have found that they can work, and are working. Increasing numbers of young people, however, are not. Within the latest official data there is troubling evidence of a long-term failure of policy that has left the number of all young unemployed three times higher than in 2001 and has driven up unemployment in the critical 16-17 age range again by a factor of three in five years. In parts of inner London, 42 per cent of these school-leavers are out of work.

The figures present the Prime Minister and his putative successor with a question that would be awkward for any progressive politician, never mind two who have already spent billions trying to answer it: how to motivate young people who can work but show no serious inclination to do so despite myriad costly inducements?

Small wonder that the Chancellor resorted recently to visions of an aspirational X Factor Britain. It was brave, as metaphors go, but it was not convincing and it will not be enough. Politically, the number of young people out of work is especially embarassing for the Government given new Labour’s relentless focus, when in opposition, on the “tragedy” of youth unemployment under the Conservatives. Those who choose to leave school at 16 will always have fewer choices in the labour market than those who stay in education to 18 and beyond. Nonetheless, the failure to prepare 16-year-olds better for the world of work is partly a failure of this Government’s education reforms, and partly, as we argued this month, of the so-called New Deal launched specifically to help the young.

This demographic is also uniquely vulnerable to competition from migrant labour. Youth unemployment reached its lowest point in a decade in the summer of 2004 and has risen since the accession of ten Eastern European and Mediterranean states to the EU. It is no mystery that highly motivated — and often highly educated — newcomers to the British labour market who are willing to turn their hand to anything to get on the employment ladder have tended to impress employers more than British school- leavers with a handful of GCSEs at best. Nor should Mr Brown be surprised if the new influx has held down wages in certain sectors, reducing incentives to work for some British jobseekers.

But setting artificial limits to legal migration is emphatically not the solution. The challenge is more complex — to motivate the unmotivated, not simply to help them to compete in a tougher job market, but to give the broader labour force the skills that it needs to have a hope of fulfilling Mr Brown’s dream of Britain as a world-beating “knowledge economy”.

There is no shortage of practical steps he could take. He should, first, restructure a benefits system that can penalise jobseekers who accept minimum and low-wage work. Secondly, he should lobby vigorously for a relaxation of European employment directives that can put employers in the absurd position of being unable to offer short-term contracts to young people who seek precisely the flexibility that such terms would afford. Thirdly, he should accelerate the introduction of a vocational diploma equivalent to A levels, without which plans to raise the school-leaving age would achieve little. The Government’s youth unemployment crisis is real. Without realistic policies, it will not go away.