Jobless figures show the real risk of creating a lost generation

Last week, George Osborne said: "Some 500,000 new private-sector jobs have been created in the last 12 months."

A nice soundbite - but wholly misleading. You'd think that was down to government policy but, in fact, most of these jobs were created in early 2010, before his spending cuts had made any impact. Now the cuts are biting and today figures show unemployment has risen.

But, thanks to the UK's flexible labour market, the impact of the recession on jobs has been much less than some feared. This is especially true in London, which continues to outperform the rest of the country. There are actually 70,000 more people in work in London than three years ago, while employment has fallen in the UK overall in that period.

Sadly, this is not true of London's young people; 40,000 fewer are in work than three years ago. In many of the hardest-hit boroughs the number who've been on the dole for more than six months has more than doubled since 2008.

Slowing the cuts would improve prospects for growth and jobs. Even the International Monetary Fund has woken up to this; its Managing Director Christine Lagarde argued just yesterday that "there is scope for a slower pace of consolidation combined with policies to support growth".

She's right. Helping disadvantaged young people move into work would be good for both the economy and society. The Government should reverse its decision to cancel EMA (Education Maintenance Allowance), which will hit kids in disadvantaged areas of London hard; extend the Work Programme; and consider cutting National Insurance contributions for young, low-paid workers.

And it should allow immigration policy to be driven by economics rather than arbitrary targets.

The Government's own estimates show that its new restrictions will reduce growth, productivity and exports. This is an anti-growth and anti-London strategy.

Most of our young people are doing well. We are not talking about a lost generation. But the risk is that a significant minority of disadvantaged youths will be excluded from the labour market and hence from broader society.

The 1980s should have taught us - even before the events of last week - of the resulting long-term social and economic damage this would cause.

If we act now, that need not happen this time.