A Labour government would spend £5.5 billion to guarantee a job for every young person who has been out of work for a year and every adult unemployed for two years, the party will announce on Monday.
Labour will pledge that its “compulsory jobs guarantee scheme” will be included in the party’s manifesto at the general election next year. It will also promise that the programme would run for the five-year parliament, rather than the one year announced previously.
It would be funded in the first year by a tax on bankers’ bonuses to raise between £1.5 billion and £2 billion. To answer criticism from the Conservatives that Labour has already promised to spend this money on several different projects, Ed Balls, the shadow Chancellor, will say that this tax would be used solely for the jobs guarantee. In future years, the scheme would be financed by reducing the tax relief on pension contributions for people earning over £150,000 to 20 per cent, to raise between £900,000 and £1.3 billion a year.
Speaking in London today, Mr Balls will say: “It will mean paid starter jobs for more than 50,000 young people who have been left on the dole for over a year.” Unemployed 18-24 year-olds and adults aged 25 and over would lose their Jobseeker’s Allowance if they refused to take up the job offer.
A Labour government would pay the wage and employer’s National Insurance contribution for 25 hours a week for six months at the national minimum wage, and would give the employee £500 towards training and administration costs.