Unemployed 18 to 21-year-olds without basic maths and English will only get benefits if they undergo 16 hours of training a week.
Unemployed teenagers who leave school without basic English and maths will be forced to go back to the classroom for 16 hours a week or lose their benefits under new rules announced by George Osborne.
The chancellor said he wanted to get rid of a “culture of worklessness” among some school-leavers, as he unveiled a package of measures to get some of Britain’s one million unemployed young people into jobs.
Among the changes, Osborne said he would gave a tax break to companies that hire under-21s, create another 20,000 apprenticeships, fund more training for 16 to 17-year-olds and bring in elements of an “earn or learn” system to stop 18-year-olds going straight on to the dole.
The principles of “earn or learn” have been hotly debated within the coalition, after David Cameron used his conference speech in October to float the idea of taking away housing benefit and jobseeker’s allowance from under-25s who were not in work or training.
The Liberal Democrats have not agreed to all those ideas but appear to have relented on some elements of “earn or learn”, as Osborne announced that 18 to 21-year-olds without basic skills would only get their benefit if they undergo 16 hours of training a week.
On top of this, all 18 to 21-year-olds who are unemployed for more than six months will have to undertake compulsory work experience, a traineeship or a full-time community work placement.
The measures appear to be an extension of the government’s controversial “workfare” schemes – or mandatory work activity – where jobseekers are forced to go on a month of work experience in order to qualify for their benefits.
Senior Lib Dem sources said the policy had been significantly watered down by Clegg’s party and agreed on the condition it will only be rolled out in pilot areas.
In his speech, Osborne said the government “will not abandon those who leave school with few or no qualifications”.
“Without basic maths or English, there is a limited chance any young person will be able to stay off welfare,” he said. “Starting in some areas at first, anyone aged 18 to 21 signing on without these basic skills will be required to undertake training from day one or lose their benefits.
“If they are still unemployed after six months, they will have to start a traineeship, take work experience or do a community work placement – and if they don’t turn up, they will lose their benefits.
“A culture of worklessness becomes entrenched when young people can leave school and go straight onto the dole, with nothing expected in return. That option is coming to an end in our welfare system.”
The Social Market Foundation thinktank said the new policy should help young people in spite of Osborne’s tough rhetoric designed to appeal to the right about cracking down on their “worklessness”.
Its director, Emran Mian, said: “Getting young people without qualifications to go into training is very much a sheep in wolves’ clothing. Despite being couched in the rhetoric of a benefits clampdown, it is a sensible policy that could improve people’s skills and employability.”
Osborne also said the job market for young people would be given a further boost by scrapping National Insurance contributions for companies when they hire under-21s.
This move is the second policy designed to encourage firms to take on young people, on top of the struggling £1bn Youth Contract programme championed by Nick Clegg, the deputy prime minister.
That scheme offers businesses a subsidy of up to £2,275 for taking on a young person who has been out of work for at least six months but figures released earlier this year showed it had only helped 4,700 in its first year out of its target of around 50,000.
Getting rid of National Insurance for hiring under-21s will provide a further incentive, effectively meaning an employer could hire two young people for the price of a 50-year-old, according to Sian Steele, a partner at accountancy firm PwC.
“Dissolving employment taxes for under-21-year-olds is a welcome and sensible move to get employers to give jobs to young people,” she said. “The worry for older workers is that it makes them less attractive in real cost terms.”
Source: The Guardian