The Labour party is finalising a proposal for a compulsory jobs guarantee, designed to get under 25s, who have been claiming Job Seeker’s Allowance for more than a year, into work. It will be paid for out of a cut in tax relief for those earning more than £150,000 a year from 45 per cent to 20 per cent. The estimated £1.3bn cash raised will go towards paying the salaries of long-term unemployed people.
The scheme also aims to help over 25s who have been out of work for more than two years, by giving them at least 25 hours a week of work at the national minimum wage, paid for by the government for six months.
Financed by the restriction on bankers’ bonuses and an increase in tax for high earners, the scheme would require job seekers to accept the offer of work and their JSA would cease. At the end of the six-month period, it would be up to the employer to decide whether to retain the worker.
A second proposal from Labour was to deliver both employment skills and health support to the unemployed and for the work programme to be delivered at a regional level.
Timms added that pay rises and bonuses have been so low over this Parliament, that the fall in the average wage had been the greatest for over 140 years.
He said Labour was calling for a national minimum wage of £8 per hour by 2020 and that the higher benchmark of the Living Wage should be the ultimate target, as the Exchequer recognised that it gained when wages rose.
Timms said: “Even if the employee does not stay after the subsidy has ended, they will have gained some work experience, a reference and more confidence to seek work elsewhere. For the employer, it represents a ‘try before you buy’ deal for recruiting a young person.”