The Queen's Speech: Drop in young jobless leads to a new deal

Some targets move too fast, even for a government that makes it clear it has hit the ground running.

The Labour manifesto pledge to help 250,000 young people unemployed for more than six months "break out of benefit" has evolved into a Queen's Speech promise of a "New Deal" for 250,000 unemployed young people. There are no longer enough of them who have been out of work for as long as six months.

Gordon Brown will have to hurry with his Budget - whose exact date next month still has not been announced - if the promised welfare-to-work package is going to keep up with the unemployment figures. Fresh statistics for April showed the total number claiming unemployment benefit fell by 59,400 to 1.65 million, the lowest for seven years and within a whisker of being the lowest for 17 years.

The speech set out the well-known options for taking the young and long- term unemployed off the dole. For 250,000 under-25s - including the 179,500 who have now been out of work for more than half a year - there will be four possibilities.

These are: a private-sector job with a pounds 60-a-week subsidy to the employer for six months; voluntary-sector work for benefit, plus an extra allowance for up to six months; full-time study on an approved course; or a job with the new Environment Task Force.

In addition, there will be a pounds 75 rebate for employers who take on someone who has been unemployed for more than two years. There were 359,600 people, mainly men between 25 and 49, in this position last month.

The schemes will be funded by proceeds from the windfall levy on privatised utilities to be introduced in the budget, and are expected to cost around pounds 3bn.

Their reaffirmation in the Queen's Speech was welcomed warmly across a wide spectrum of opinion. Victor Adebowale of Centrepoint, the homelessness charity whose Foyer scheme ministers have praised, said: "Youth unemployment is a national scandal which needs not one, but several sophisticated solutions."

Ruth Lea, head of policy at the Institute of Directors, said: "Making people more employable has to be the right way forward for coping with unemployment and poverty." However, she said the Government should focus its efforts on people who had been out of work for more than two years as so many of the others would find jobs anyway.

There were no clues yesterday about any surprise welfare-to-work measures that might be included in the budget. There has been speculation that the Chancellor wants to make an early start on more ambitious plans, such as a new tax credit for the low-paid to improve work incentives.