Labour defends plans to deprive the long-term unemployed of benefits if they refuse to take job offer

Labour today defended its plans to deprive the long-term unemployed of their benefits if they refuse to take up the offer of a “guaranteed” job.

Liam Byrne, the shadow Work and Pensions Secretary, said: “For some people, I accept that will be a culture shock, but for many more it will be a lifeline.” He added: “the best way to bring the welfare budget down, is to push people into work.”

Under the proposal, likely to feature in the party’s manifesto at the next election, a Labour Government would guarantee six months’ work to the 130,000 adults over 25 who have been unemployed for two years or more. They would be paid at least the minimum wage for 25 hours a week, leaving them time for training and searching for a permanent job.

The £1bn cost would be raised by cutting the tax relief on pension contributions for people earning more than £150,000 a year from 45 per cent to 20 per cent.

Labour’s “compulsory jobs guarantee” is designed to show the party is keen to tackle unemployment and is not “soft” on welfare claimants, as the Conservatives claim. Its policy was announced ahead of a crucial Commons vote next Tuesday on George Osborne’s plan to impose a one per cent cap on rises in most benefits and tax credits for the next three years. Labour will vote against the move.

Ed Balls, the shadow Chancellor, said: “A One Nation approach to welfare reform means government has a responsibility to help people into work and support those who cannot, but those who can work must be required to take up jobs or lose benefits as a result – no ifs or buts. Britain needs real welfare reform that is tough, fair and that works, not divisive, nasty and misleading smears from an out of touch and failing government.”

The Coalition Government has already announced plans to cut the amount that high earners can put into a pension and attract tax relief from £50,000 to £40,000 a year. Conservatives accused Labour of allocating money Mr Balls had previously earmarked for reversing cuts to tax credits. A Treasury aide said: “Ed Balls is trying to spend the same money twice. That means more borrowing and more debt - exactly how Labour got us into this mess in the first place. Labour have learnt nothing from their mistakes.”