Work and Pensions Secretary Pat McFadden has launched a £1 billion youth employment scheme, appealing to Labour backbenchers not to oppose fresh welfare reforms. The announcement is seen as a prelude to a renewed attempt to overhaul the welfare system after plans by his predecessor were blocked by a rebellion last year.
Under the new policy, companies will receive a £3,000 grant for each hire of an 18-to-24-year-old on benefits who has been jobless for at least six months, aiming to create 200,000 jobs. Additionally, small and medium-sized businesses will be paid £2,000 for every new employee aged 16 to 24 they take on as apprentices, with payments staggered from June.
McFadden signalled a fresh push for welfare changes, noting that the public wanted the system to promote work and value for money. Last summer, the government was forced to water down disability benefit cuts to avert a rebellion by over 120 Labour backbenchers, while 47 later rebelled against proposed welfare cuts. He said he saw 'no reason Labour MPs should not support welfare reform that puts work and opportunity at its heart.'
The government also granted the Low Pay Commission flexibility to recommend changes to the pace of minimum wage rises for younger workers, amid concerns over youth unemployment levels not seen in a decade. The proportion of young people not in education, employment or training (Neets) who are sick or disabled has doubled to about 45% of the total.
Shadow Work and Pensions Secretary Helen Whately criticised the plans, saying the best way to tackle youth unemployment was to back businesses, not tax them. McFadden defended the approach, stating the welfare state survives only with public support for promoting work and value for money.
