Rachel Reeves to take away benefits from young people if they turn down offer of work

It's part of a 'youth guarantee'

Speaking at the Labour Party conference today, the chancellor is expected to announce a 'youth guarantee' with those refusing to take up the offer potentially being stripped of their benefits.

Reeves is set to promise "nothing less than the abolition of long-term youth unemployment" at the annual conference being held in Liverpool.

This morning, the chancellor told Sky News: "There are almost a million young people who are not in education, employment or training. 

"That has a terrible impact on them throughout their lives, there is loads of evidence that shows if you are out of work for long periods early on in what should be the beginning of your working life, then you’re more likely to experience other bouts of unemployment, lower wages, mental health problems."

This number increased a third during the last four years of the Conservative term although was also affected by the Covid pandemic.

The idea behind the new scheme is to help young people into jobs and avoid them falling into long-term unemployment.

Reeves told LBC that a funding structure for the scheme will be outlined in the upcoming Autumn Budget.

Reeves has reportedly said that the move has been “welcomed by business leaders”, and that the government has “not got to the stage” of signing up firms.

While the Autumn Budget will not be announced until November, the chancellor is set to outline her approach at today's conference.

Reeves faces the challenge of balancing her party's demands while sticking to promises made in Labour's manifesto before being elected into government last year.

These promises focus on not hiking income tax, VAT or employee contributions to National Insurance.

Meanwhile, calls to tax the super rich and large corporations continue to grow.

She is expected to say Britain must be built on the principles of doing “our duty for each other” and “hard work matched by fair reward”.

The chancellor is tasked with plugging a £30bn black hole, meaning changes will have to be made to balance the books.