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20 November 2013updated 26 Sep 2015 10:31am

What Labour is really proposing for under-25s on benefits

The party isn't planning to "scrap benefits for under-25s". It's planning to guarantee them work or training.

By George Eaton

There’s been much outrage this morning at a report in today’s Telegraph that Labour is planning to “scrap benefits for under-25s”, with party supporters accusing it of entering a race to the bottom with the Tories. But the reality is more complex than the fury suggests. 

The first point to note is that the idea is contained in an IPPR paper due to be published later this week; it isn’t, contrary to what the Telegraph suggests, party policy (yet). The second is that the report itself doesn’t even propose scrapping benefits for the under-25s. Rather, it calls for a new means-tested “youth allowance” for 18-24-year olds who are not in work or education. This would be set at £56.80, the same level as the youth rate of Jobseeker’s Allowance, and would be conditional on participation in “purposeful training” or “intensive” job hunting. This might seem objectionable but it’s some distance from abolishing all benefits for the young. 

But there’s another important detail that’s been missed entirely. Were Labour to adopt the plan (with an announcement likely to be made in Rachel Reeves’s first speech as shadow work and pensions secretary in January), it would do so only on the basis of guaranteeing all-under 25s a job (paying at least the minimum wage), or a place on an approved training scheme. The upfront costs will be high, but so will the long-term savings. (It’s odd, incidentally, that some on the left seem to think it’s better to pay young people just £56.80 a week than to guarantee them a job paying the minimum wage.) This enlightened approach contrasts with that of the Conservatives, who have proposed removing all benefits from under-25s who aren’t “earning or learning” but haven’t offered anything resembling a jobs guarantee. 

As Labour a spokesperson told me: “Labour policy is a jobs guarantee for young people.

“Ed Miliband has talked about making the welfare system work for young people, with a compulsory jobs guarantee, to sustainably bring down the social security bill.

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“Compare that with Cameron’s simplistic attempts to take benefits from all young people, which would harm the severely disabled, which were drawn up on back of a fag packet to try and please Tory conference.”

There are plenty of questions that remain for Labour. How will these jobs be created? Party sources suggest that companies will sign up to the scheme voluntarily but it isn’t clear what incentives will exist for them to do so. Will jobseekers be offered a choice of posts are be forced to accept one unsuited to them? And how will it all be paid for? 

But to one question at least – is Labour planning to scrap benefits for under-25s? – there is a definitive answer: no. By promising to guarantee them work or training, it’s actually planning to increase them.