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Reeves Unveils Plan to Combat Long-Term Youth Unemployment

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Chancellor Rachel Reeves has announced a significant initiative aimed at addressing long-term youth unemployment. During her upcoming speech at the Labour Party’s annual conference in Liverpool, she will introduce a plan that guarantees paid work placements for young people who have been unemployed or out of education for at least 18 months. This new strategy could lead to sanctions for those who refuse the offer, potentially impacting their benefits.

The initiative builds on a “youth guarantee” introduced last November, which provided 18 to 21-year-olds with access to apprenticeships, training, education opportunities, or assistance in finding employment. Under the revised plan, every young person receiving Universal Credit for 18 months without engaging in “earning or learning” will be offered a paid placement. Those who decline the offer without a valid excuse may face penalties, including the loss of their benefits.

The placements are designed to equip young individuals with essential skills for securing full-time employment. Currently, approximately one in eight individuals aged 16 to 24, totaling around 948,000 people, are not in education, employment, or training.

Collaboration with Business Sector

While no companies have committed to the program as of yet, Reeves reported that several business organisations have expressed support for the initiative. The scheme will involve partnerships with private companies, with government subsidies allocated to cover a portion of the wages for participants. Funding for the initiative will come from existing budgets outlined in this year’s spending review, with comprehensive details to be released in the November Budget.

Reeves acknowledged the pressures facing the global economy, stating, “We’re not immune to any of those things.” In addition to the youth unemployment plan, she has also committed to funding a library in every primary school across England.

The announcement has been met with a positive response from the business community. Tina McKenzie, policy chair of the Federation of Small Businesses, remarked, “Reprioritising spending from employment programmes which aren’t working to this type of scheme is exactly the way to get much-needed bang for taxpayer cash.” This sentiment reflects a growing desire for effective solutions to tackle youth unemployment as the economy continues to recover from recent challenges.

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