While so far only 18- to 25-year-olds faced cuts in benefit for refusing options under the New Deal programme, from the autumn, jobless people over 26 will also be targeted if they refuse work placements or training and education.
In some areas it will affect those who have been out of work for 12 months or more, in others people who have been unemployed for 18 months or longer.
Yesterday the Government expanded the New Deal scheme nationally to include those over 25 who have been out of work for two years or more. However, ministersfought shy of extending full compulsion to this category. While these longer-term jobless workers will be forced to turn up for their New Deal interviews, they will not be forced to take up any of the options.
Those aged between 18 and 25 face cuts of up to 40 per cent if they refuse one of four options: a subsidised job, education and training, work on the Government's environment taskforce or a job with a voluntary agency.
Officials at the Department for Education and Employment indicated yesterday that older long-term jobless people might find it more difficult to take jobs in new industries. However, the Government is determined to see how far it can extend the principle of compulsion.
Meanwhile, ministers announced that several retailers and a power company have decided to back the extension of New Deal. Among those signing up to the initiative, which aims to help 200,000 extra jobless, are Sainsbury, Tesco, Asda, B&Q and the National Grid. The over-25s who have been out of work for longer than two years will be offered advice, help in finding a job, training and grants.
About pounds 479m from the windfall tax has been allocated for the extension to the scheme, which was officially launched yesterday.
David Blunkett, Secretary of State for Education and Employment, told BBC Radio 4: "We are talking about a very substantial investment in ensuring that people have jobs, that they contribute to a labour market that remains buoyant and therefore we hold down inflation while maintaining stable growth."
David Willetts, Tory spokesman on education and employment, cast doubt on Labour's proposed solution, saying: "Our fear is that here the focus is entirely on job subsidies."Reuse content