Ministers to put up £1bn jobs incentive package as youth unemployment soars

Ministers say the “youth contract” programme will create at least 410,000 job opportunities for 16 to 24-year-olds by subsidising wages and providing work experience placements.

The scheme, to be introduced by Deputy Prime Minister Nick Clegg, comes the day after Government statistics revealed that 157,000 young people in the region are not in education, employment or training – the highest level since records began in 2000.

The number has risen by almost 50 per cent in four years, and only the North West has a greater proportion of 16 to 24-year-olds looking for jobs or course places.

Hugh Bayley, Labour MP for York Central, said they were grim figures and called on Chancellor George Osborne to announce more plans to stimulate the economy in his autumn Budget statement next week.

“The Government is running the risk of writing off a generation to a life on benefits just as happened in the 1980s,” Mr Bayley said.

“There has been some suspicion that the Chancellor will seek to bring forward capital works on roads and housing. That would be a very welcome lifeline for the construction industry which has been very badly hit by the Government’s cuts to school-building programmes.

“If the Government is encouraging private firms to build public housing, it should require companies to train and offer apprenticeships to young people.”

The youth contract plan bears similarities to the Future Jobs Fund – a £1bn scheme, controversially axed by Ministers last year, that rewarded firms for getting young people back into work.

The new programme intends to help 160,000 job seekers by offering wage incentive payments to employers. A further 250,000 work experience placements for up to eight weeks will be available.

Mr Clegg will say youth unemployment must be tackled. Employment Minister Chris Grayling said: “We are absolutely committed to making a difference to the life chances of young people.”