Nick Clegg: 1bn youth jobs fund to prevent lost generation
Scheme includes job subsidies and apprenticeships
500,000 unemployed youngsters included over three years
Cuts in family tax credits will pay for scheme, says Labour
Nick Clegg has announced 1bn of new funding to help prevent another lost generation of young jobless people.
The deputy prime minister said the initiative was designed to ensure those born in the boom do not "bear the brunt of the bust" and that helping young people find jobs was a matter of "generational fairness".
The money to be spent over three years will provide opportunities including job subsidies, apprenticeships and work experience placements for 500,000 unemployed people.
Labour said the move represented a U-turn and was in effect a revised version of its future jobs fund, cancelled by the coalition government when it came to office.
But speaking during a round of interviews on Friday, Clegg said his youth contract scheme was very different and on a scale not seen "for a very long period".
The initiative comes as figures show that almost one in five 16- to 24-year-olds (1,163,000) are not in education, employment or training an increase of 137,000 on this time last year.
The government will subsidise 160,000 work places by providing 2,275 to any private sector business willing to hire an unemployed person aged 18 to 24 years old.
Any young person taken on will have to complete the placement or be refused benefits. Each subsidy will last for six months, and will be available to all young people who have been on jobseeker's allowance for nine months. All employers will be expected to pay at least the minimum wage, and the subsidy will more than cover the cost of an employer's national insurance.
The Liberal Democrats said the scheme was different from the future jobs fund because it will not operate in the public sector, provides a smaller job subsidy and may lead to permanent jobs.
Clegg said the scheme under Labour had failed because it had! created "here today, gone tomorrow" jobs.
"They basically subsidised jobs primarily on the government payroll, in the public sector," he told BBC Breakfast News. "What we're doing is something completely different.
"When myself and my team were designing this scheme we looked very closely at what employers said, and they said: 'If you give us a bit of help at the beginning to employ the start-up costs of employing a young person, then invariably we stand a good chance of giving that young person a job.'"
The coalition refused to specify the source of the 1bn, but did not deny reports that the funding might come from a freeze in tax credits. The chancellor, George Osborne, will set out the source of the funding in his autumn statement on Tuesday.
Liam Byrne MP, the shadow work and pensions secretary, said: "You couldn't make it up. This Tory-led government has put up unemployment and is now proposing cuts to working families' tax credits to pay for a back-to-work scheme.
"But it's bankers' bonuses that should be paying to help get young people back to work, not working families."
Asked where the money to fund the initiative would come from, Clegg told the BBC Radio 4 Today programme it would not come from "one particular saving".
"The only thing I can rule out is that this 1bn isn't paid for by one particular tax change or one particular welfare change," he said. "That's not the way it works.
"What you will see on Tuesday [in the chancellor's autumn statment] and the chancellor of course will make it all clear then is that you make some spending commitments and some saving commitments and they balance out."
Asked whether the money would come from squeezing the tax credit, Clegg said: "I'm not denying for one minute there will continue to be difficult choices to be made, and they will be spread as evenly as possible."
He said he was trying to highlight what t! he gover nment was doing to provide hope for many young people and was not going to "get diverted into a discussion about government accountancy".
The 1bn will fund a further 250,000 work experience places over the next three years, adding to the 50,000 places announced so far.
A further 50m programme will target 16- and 17-year-olds who are not in education, employment or training. The scheme will focus on the 25,000 most disengaged young people.
The TUC general secretary, Brendan Barber, said any significant moves to help young people into jobs were "long overdue", but expressed concern about the expansion of work experience amid reports of the exploitation of young people.
"It may be late, but the TUC welcomes elements of the plans being announced the job subsidy, training and extra help from jobcentres effectively recreate the most positive elements of the last government's new deal for young people, which the TUC strongly supported.
"But the massive expansion of the work experience scheme is much less positive, unfortunately. There are already widespread reports of young people on the programme being exploited. Keen unemployed youngsters desperate to find work shouldn't be conscripted into edging out other workers who should have been paid the going rate for the job."
The Liberal Democrats have highlighted the "scarring effect" of youth unemployment. The government cited academic research showing that someone who suffers unemployment at the point at which they enter the labour market suffers lower wages for 20 years.
In a speech in Leeds later, Clegg said: "The aim of the youth contract is to get every unemployed young person working or learning again before long-term damage is done. Youth unemployment is an economic waste and a slow-burn social disaster.
"If people are out of work when they're young, they bear the scars for decades. If they have a false start, they might not ever fully catch up. These are tomorrow's mothers, fathers and taxpayers. If they end! up fall ing behind, our whole society pays the price."
Liberal Democrats said it had been a battle to persuade their Conservative partners to back a wage subsidy scheme, saying it was "like getting a vegetarian to go and buy a kebab on a Friday night".
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