Work experience dropouts won't lose benefits after all

Ministers made a crucial concession yesterday to critics of their work experience programme in an attempt to prevent a collapse in support for the controversial scheme.

Chris Grayling, the Employment Minister, said jobless youngsters on the unpaid schemes would not lose their benefits if they dropped out before the end of their placements. His move comes after a succession of high-profile employers, including Poundland, TK Maxx and Matalan, pulled out of the "workfare" initiative because of the threat of benefit sanctions.

They had also faced an aggressive Right to Work campaign – including brief occupations of stores that joined the programme – from critics who claimed the scheme amounted to cheap labour. The Government described the protesters as unrepresentative extremists. Previously, youngsters who left the voluntary programme after more than a week ran the risk of seeing their benefits cut, prompting charges that it was a British equivalent of US-style workfare programmes.

Following a meeting with employers yesterday, Mr Grayling said participants would in future only lose benefits in cases of gross misconduct, such as theft or racist abuse. David Cameron mounted a strong defence of the scheme, telling MPs the Government had received "expressions of interest" in it from 200 small and medium-sized employers. He added it was time for everyone in Britain to "stand up against the Trotskyites of the Right to Work campaign".

Iain Duncan Smith, the Work and Pensions Secretary, said he was proud of the scheme and attacked protesters as out of touch. He said: "The kids love it, the public love it, companies love it and we love it."

Anne Marie Carrie, the chief executive of Barnardo's, which had expressed worries about the "punitive" nature of the scheme welcomed the Government's move. She said: "My main cause of concern with this scheme has always been the sanctions that young people faced if they decided after a week that the placement wasn't for them."

Ms Carrie, who attended the meeting with Mr Grayling, also disclosed that it had discussed limiting the work experience placements to four weeks rather than the current eight weeks.

Liam Byrne MP, the shadow Work and Pensions Secretary, accused ministers of making up policy on the hoof.

* Mr Cameron announced a Whitehall inquiry into why information about allegations of fraud at the company A4e were not passed to him before he made its boss, Emma Harrison, a Government adviser. He told MPs he had asked the Cabinet Secretary, Sir Jeremy Heywood, to investigate the episode.

Workfare farce: Who's dropped out?

Tesco Now paying people on work experience and guarantees a job when placements go well.

Matalan Has suspended involvement pending internal investigation.

Arcadia Group Has just ended its involvement at its BHS Stores.

Poundland Withdrew after saying it took "very seriously" the mandatory element of the scheme.

Waterstones Pulled out. Does not approve of work without pay.

TK Maxx Quit two weeks ago, saying it did not back "compulsory non-paid work experience".

Sainsburys Has own scheme "always linked to an actual job vacancy".

Burger King Last week said it was pulling out.

Shelter Offered work experience under a separate scheme, but withdrew last year.