By Maximilian Clarke

Nick Clegg this morning announced a £1bn youth contract scheme to get employers hiring from the pool of 1 million jobless youth in a move that was widely welcomed by business lobbies and by the trades unions.

But Eamonn Butler, author on economics and social issues and director of the the Adam Smith Institute, has voiced scepticism about the scheme's proposed benefits. Writing for the libertarian think-tank’s blog, Eamonn argues that “another Gordon Brown-style 'initiative' is not the way to get young people into work.”

“We need 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, and radically cut back workplace regulation.”

Employers, Butler explains, are being deterred from hiring by widespread skills shortage coupled with robust labour laws which make it difficult for employers to fire unsatisfactory workers. The result is a fear of taking on staff without prior experience that has led to an employment crisis that cannot be addresses through cash investment alone.

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