Chancellor Rachel Reeves will today pledge to “abolish long-term youth unemployment” through a new scheme underwritten by the government.
Every young person who has been on Universal Credit for 18 months without earning or learning will be offered paid work through the Youth Guarantee.
The scheme will come with conditions that young people face having their benefits docked if they do not take up offers of a job or training. Further details will be set out in the budget in November.
It is the latest promise by Labour which is bound to draw scepticism after a series of failures to deliver on manifesto commitments such as reducing energy bills and powering economic growth.
She has also replaced her famed “£20 billion blackhole left by the Tories” with a £40 biliion blackhole largely of Labour’s own making.
Polling has found that Ms Reeves could face a severe backlash if she tries to balance the books at the budget on 26 November with more spending cuts and tax rises.
There will be close scrutiny of her conference address for clues as to her plans, which are said to include higher taxes on the gambling industry, excluding horse racing. There has also been talk of a tax on the banks.
Her jobs scheme will see participants receive support helping them transition into full-time employment.
One in eight 16 to 24-year-olds are currently not in education, work, or training, having risen by almost a third over the last four years under the Conservatives.
Ms Reeves will tell the Labour Party Conference in Liverpool that she believes “in a Britain founded on contribution – where we do our duty for each other, and where hard work is matched by fair reward.
“I believe in a Britain based on opportunity – where ordinary kids can flourish, unhindered by their background.”
The Chancellor will pledge to “nothing less than the abolition of long-term youth unemployment.”
She will say: “I will never be satisfied while too many people’s potential is wasted, frozen out of employment, education, or training. There’s no defending it.
“It’s bad for business, bad for taxpayers, bad for our economy, and it scars people’s prospects throughout their lives.
“Every young person will be guaranteed either a place in a college, for those who want to continue their studies or an apprenticeship, to help them learn a trade vital to our plans to rebuild the country, or one-to-one support to find a job.
“But more than that our guarantee will ensure that any young person out of work for 18 months will be given a paid work placement. Real work, practical experience, and new skills.”
The CBI and British Chambers of Commerce have welcomed the scheme. Rain Newton-Smith, CBI chief executive, said: “Rising youth unemployment holds back the future for young people and limits our economic potential.”
However, she added: “To deliver a comprehensive plan to support higher employment we also need to tackle increases in the costs of employment and ensure the Employment Rights Bill doesn’t discourage hiring.”
Shevaun Haviland, director general of the BCC, said: “Business will welcome the Chancellor’s ambition to get more young people into work. The BCC has been calling for this as a matter of urgency.
“The UK’s active workforce is rapidly ageing, so it’s vital for our economy that we plug into this fresh talent pool, who have so much to offer.
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