Labour’s flagship jobs guarantee would be in place throughout the next Parliament, paid for by a bank bonus tax and a squeeze on high-earners’ pension pots, the party said.
The pledge to include a five-year help package for the long-term unemployed in the 2015 General Election manifesto comes less than a month after it said it was only being promised for one year.
Under the scheme, under-25s on Jobseeker’s Allowance for more than a year, two years for others, would have to take a taxpayer-subsidised job for six months or risk losing benefits.
Firms and voluntary sector groups would provide 25 hours’ employment a week over six months at the national minimum wage – with the Government paying the wages and employers’ National Insurance.
Another £500 per employee would be supplied towards training, which would be compulsory for participants – and administration costs.
Labour said only firms that could show they were not using the scheme to replace existing workers or reduce their hours would qualify for funding.
Last month the party confirmed reports that funding, also including the proceeds of restricting pension tax relief for high earners, was only in place for 2015/16.
Now it says the scheme, estimated on present claimant levels to cost £1.9 billion in its first year and £900 million a year thereafter, is affordable right through to 2020.
A “cautious estimate” put the revenue from a fresh raid on annual City payouts at between £1.5 billion and £2 billion, with £900 million to £1.3 billion a year brought in by the pension switch, it said.