Budget 1999: New Deal - Grants will help put `lost generation' back to work

THE GOVERNMENT reinforced its flagship Welfare to Work strategy with three new initiatives aimed at the over 50s, the under 25s and lone parents.

The Chancellor decided to employ a "carrot" approach to the over 50s and single parents, but will try out a "stick" approach for some young people.

Under the proposals, unemployed people over the age of 50 who move into a full-time job will enjoy a guaranteed minimum income of pounds 9,000 a year for the first 12 months.

This adds to the pounds 750 training grant they will receive in full-time jobs and pounds 300 in part-time and help from a personal adviser for those who want it.

The Department for Education and Employment also disclosed that the over 50s would now be eligible for the New Deal unemployment scheme after just six months out of work rather than the two years.

They will receive pounds 60 a week "employment credit" for a year while they are on the programme.

Andrew Smith, employment minister, said the measures would be a big help to those over 50 who have been unemployed and "despaired of finding work again".

The department announced a pounds 5m pilot scheme to beef up the "Gateway" process for young people joining New Deal. The DfEE argued that some young people would gain from a more intensive induction on the programme aimed at injecting greater "pace and purpose" in their job-seeking activities.

The pilots would introduce a tougher attitude to those who enter the final month of the four-month Gateway process, reinforcing the message that they would have to take one of four options and that there was no "fifth option" of continuing on full benefits.

Mr Smith welcomed the proposal that lone parents entering work should be able to benefit from a two-week run of income support in order to help ease them through the transition period.

He said it would represent a big boost to what could be offered on the New Deal for Lone Parents.

Workers will also be able to boost their qualifications under new Individual Learning Accounts aimed at encouraging people to take responsibility for their own training.

John Monks, TUC general secretary, welcomed the jobs package for older workers. He said it went some way to strengthening the New Deal.

"However, many of the problems encountered by older people are directly attributed to the long term decline in manufacturing, so the Government needs to take urgent action to stem the current escalation of job losses in this sector."