The young face benefit cut under Labour

Youth unemployment: Under-25s would lose 40 per cent of payments unless they take training placements

COLIN BROWN

Chief Political Correspondent

Staying in bed and living on benefit will no longer be an option for young people under a Labour government, Gordon Brown, the shadow Chancellor, said yesterday.

Young people under 25 will lose 40 per cent of their benefit - as they may under the Tories - if they refuse to take up any of the schemes announced yesterday by Mr Brown in a pounds 1bn package of proposals to get young people off welfare into work. It will be funded by the windfall profits tax on the privatised utilities.

Mr Brown denied Labour was creating a "conscript army" or lurching to the right. But the party leadership clearly believes its attack on the young unemployed will prove popular with Tory voters. Young people refusing to take a job could have income support reduced from pounds 36 to pounds 22 per week.

Labour's four options are:

n Employers taking on a long-term unemployed young person will be offered a pounds 60-a-week tax rebate for six months for in-work training for at least one day a week;

n Young people taking a voluntary sector job will be paid a weekly wage, equivalent to their benefit plus a fixed sum top-up, for six months;

n Full-time study on an approved course, entitling them to keep their benefit, and relaxing the 16-hour rule which stops the unemployed from retraining.

n A place on an environmental task force which will work alongside Labour's proposed citizens' service, on a weekly wage, equivalent to benefit plus a top up, for six months.

Those who fail to find full-time work at the end of the six months will rejoin the system for another six months.

It is similar to schemes being tried in some regions, including Norfolk, but Mr Brown said the chief difference was the guarantee of proper training.

"The fifth option, simply remaining unemployed and permanently on benefits, will no longer be an option," Mr Brown warned. "With our proposals, young people will be in work and not as with the Tories on benefit. If we do not act a generation of young people will have been abandoned with social division, crime, alienation and all the consequent problems for the next 40 years," he said.

"One of the options would not be for them to lie in bed," said David Blunkett, Labour's spokesman on education and employment. "We have no choice because we have a ticking time bomb in terms of social cohesion that will cost us dearly if we don't act."

Young people will be given a month to decide whether to take up the job offers, and Labour would not delay in bringing in the proposals, Mr Brown said. Firms would not be allowed to shed older workers to make way for a subsidised workforce of young people, he added. They would only qualify for the tax breaks, if they offered new jobs.

The Economic Secretary to the Treasury, Angela Knight, said Labour was promising people a fresh start but would deliver a dead end.

"Gordon Brown's `make work' schemes won't create real jobs. It is businesses which create jobs, not governments. All that Labour policies on a minimum wage and the social chapter would do is add costs to businesses and destroy jobs, particularly for young people, by making it much more costly for companies to employ them."

Paul Convery, of the independent Unemployment Unit, said: "The evidence shows that coercing young people into training doesn't work. The vast majority of young people want to train, provided they know that training is going to lead to qualifications or to work."

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