Labour to pay for graduates on benefits to do work experience
Graduates claiming benefits will be offered work experience in bars and on building sites under Labour plans to reduce youth unemployment.
Hundreds of thousands of young Universal Credit claimants will be offered work experience in construction, health and social care and hospitality after an £820m funding package was announced on Saturday.
Struggling graduates who fit the age criteria will be included, The Telegraph understands, with more young jobseekers set to be offered help with CVs and mental health advice to get them into work.
The Government will also subsidise jobs for 55,000 18 to 21-year-olds who have been on benefits for more than 18 months, providing 25 hours of work a week for six months.
The jobs will pay the minimum wage, and claimants who refuse the opportunities offered will see their benefits cut.
Pat McFadden, the Work and Pensions Secretary, said: “Every young person deserves a fair chance to succeed. When given the right support and opportunities, they will grasp them.
“This funding is a downpayment on young people’s futures and the future of the country, creating real pathways into good jobs and providing work experience, skills training and guaranteed employment.”
Close to one million young people aged between 16 and 24 are considered “Neets”, which stands for “not in employment, education or training”. This number rose significantly in the aftermath of the Covid pandemic, mainly because of illness
It is not only school finishers facing a difficult jobs market. A poll of 2023 graduates found that 6.2 per cent of leavers – or 56,900 – were still out of work 15 months after finishing their degrees, up from 48,700 the previous year.
Business leaders have warned that subsidising work experience is not enough after tax rises included in both of Rachel Reeves’s Budgets so far had made it more expensive to employ young people.
Graduate vacancies advertised on the Reed job site have dropped from 180,000 to 55,000 in three years, according to James Reed, the chief executive, writing in The London Standard last month.
Kate Nicholls, of the industry body UK Hospitality, said: “Hospitality has always been a vibrant and dynamic route for people to get their first taste of jobs, to gain transferable skills, and to get their foot on the career ladder.
“A hand-up is really helpful for young people, but we want to be able to afford to employ them, and to have sustainable businesses and to give people the dignity of work. What we really want is for the Government to back hospitality, to be able to be that engine of growth and to generate the jobs that we need.”
‘They should start by reversing the damage’
Andrew Griffith, the shadow business secretary, said the Government needed to “start by reversing the damage done to businesses”.
He added: “This announcement is not a plan for youth employment. It is an attempt to push young people towards sectors the Government has already crippled. If ministers want hospitality to offer real careers, they should start by reversing the damage they have done to the businesses expected to provide them.”
More than 100,000 jobs have been lost in hospitality since the October 2024 Budget, analysis by UK Hospitality found, when the amount of National Insurance employers pay was increased from 13.5 per cent to 15 per cent of pay.
Small venues, such as cafes, pubs, bars, and restaurants, face an extra £318m in business rates bills over the next three years. Those with a rateable value of less than £51,000 will weather a 13 per cent rise.
The higher tax bills come on top of increases in the National Living Wage. From April next year, the wage will rise by 4.1 per cent to £12.71, the Treasury confirmed earlier this week, with the minimum wage for those aged between 18 and 20 jumping by 8.5 per cent to £10.85 an hour.
Last month, government figures revealed that the number of benefit claimants who did not have to work had reached more than four million. This was 50 per cent above the 2.7 million level in July last year, when Labour came to power.
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