Election '97: Labour to put 400,000 back to work

Labour plans to get 400,000 young people off benefit and into work in its first year in government, senior officials from the party said last night.

Details of plans to find jobs for 18 to 24 year-olds who have not worked for six months were released as the Conservatives went on the offensive, claiming the proposal would not work and would be far too costly.

Until now, Labour has promised that its scheme, funded through a windfall tax on the privatised utilities, would help 250,000 people over five years.

But the costings for the scheme, which Labour says have been audited by academics, are, in fact, more ambitious. They show that the party plans to spend pounds 1bn of its planned windfall tax, believed to be around pounds 3bn, in its first year on getting 400,000 people into jobs. A further pounds 500m would be spent in each of the following four years.

As the Conservatives pointed out yesterday, the number of 18 to24-year- olds has fallen to 198,000 from 280,000 since November 1995, when Gordon Brown first made the promise.

However, Labour says that each month 27,000 more young people reach the stage where they have been unemployed for six months. So, although the total number is not going up, a rolling programme is needed to reduce it.

Last night a party official said the pledge to offer jobs to 250,000 young people over five years was very conservative. In fact, a Labour government should be able to help far more people than that. The party says independent costings by other academics have also shown benefit savings will ensure the programme will pay for itself after the first five years. Labour said as many as 550,000 18 to 24 year- olds were not in work, education or training.

The Tories claimed the plan would cost pounds 1.6bn per year, and a pounds 3bn windfall tax would run out in less than two years.

However, Labour countered that the Conservative claim did not take into account the savings that would be made through getting people off benefit.

"The whole point about this is that in the first couple of years you have to deal with the stock of people who are unemployed for over six months, plus all the new people who are coming on," the party official said.

"Our pledge is a cautious and conservative estimate of what we can do."

Earlier, Gillian Shephard, the Secretary of State for Education and Employment, had said the policy was incorrectly costed, and, coupled with the minimum wage and the Social Chapter, would mean more unemployment, not less.

"When will Labour learn that you cannot place extra taxes on business in the form of a national minimum wage and the Social Chapter, and at the same time introduce subsidies for businessmen to take on the long- term unemployed?" she asked.

"In contrast to Labour's plans, we have in place a costed and coherent programme of training measures for young people. Are you aware of this, Mr Brown? Obviously not."