Chancellor promises to end long-term youth unemployment through subsidized work placements, with sanctions for those who refuse
Tens of thousands of unemployed young people in Britain face losing their benefits if they turn down job offers, Chancellor Rachel Reeves will announce Monday.
In a keynote address to the Labour Party conference in Liverpool, Reeves will pledge to “abolish” long-term youth unemployment through a new “Youth Guarantee” scheme targeting 18 to 21-year-olds who have claimed Universal Credit for 18 months without working or studying.
Under the program, eligible young people will receive subsidized paid work placements along with support to access education, apprenticeships, or employment opportunities. However, those who refuse offers without valid justification could face sanctions, including complete loss of benefits.
“I will never be satisfied while too many people’s potential is wasted, frozen out of employment, education, or training,” Reeves is expected to say. “There’s no defending it.”
The scheme will guarantee every young person either a college place, an apprenticeship, or one-on-one job support. Those unemployed for 18 months will receive paid work placements offering “real work, practical experience, and new skills.”
Work and Pensions Secretary Pat McFadden will reinforce that young people have a responsibility to seize these opportunities, stating: “With that opportunity comes responsibility, too – to take up the training, the apprenticeship or the work that is offered.”
The Treasury will subsidize positions under the Youth Guarantee, with major retailers expected to be courted for participation. Currently, one in eight 16 to 24-year-olds are classified as NEETs – not in education, employment, or training.
The Federation of Small Businesses welcomed the proposal, calling it “exactly the way to get much-needed bang for taxpayer cash.”
However, Shadow Chancellor Sir Mel Stride criticized Reeves for policy contradictions, pointing to her October 2024 budget’s National Insurance increase for employers. “She introduced a £25billion Jobs Tax that made it more expensive for businesses to hire, especially young people,” he said. “Since Labour came to power, unemployment is up. Business confidence is down.”
The announcement comes as Reeves faces mounting pressure to eliminate the two-child benefit cap. Housing Secretary Steve Reed acknowledged the goal but said any changes must wait “until we can afford it.”
