Chancellor Rachel Reeves will announce a bold plan to end long-term youth unemployment by offering guaranteed paid work placements to young people who have been out of education or employment for 18 months.
Speaking at the Labour Party Conference in Liverpool, Reeves will promise “nothing less than the abolition of long-term youth unemployment,” pledging that every young person on Universal Credit for 18 months without “earning or learning” will be offered a placement.
Those who refuse without a reasonable excuse could face sanctions, including losing their benefits.
Labour’s Youth Guarantee Expanded
The scheme builds on Labour’s “youth guarantee,” launched last November, which gave every 18 to 21-year-old access to an apprenticeship, education, or training. Under the new plan, young people will have a pathway into work designed to equip them with skills to transition into full-time jobs.
An estimated 948,000 people aged 16 to 24 in the UK are currently not in education, employment, or training (NEET), according to official data. The numbers reached an 11-year high of nearly 987,000 last year.
Business and Funding Details
Although no companies have formally signed up yet, Reeves confirmed that several business organisations support the initiative. Employers are expected to cover part of the wages, with the government providing subsidies funded through existing budgets. Full details will be unveiled in November’s Budget.
The Federation of Small Businesses welcomed the announcement as “hugely important,” but warned that small firms must be enabled to play a full role and that young people with health challenges should not be excluded.
However, questions remain over whether businesses can absorb new hires amid pressures from rising National Insurance Contributions, the National Minimum Wage, and falling job vacancies.
Balancing Growth with Public Finances
Reeves faces a difficult Budget, with economists warning of possible tax rises or spending cuts to meet her self-imposed borrowing rules. She insisted Labour will keep its manifesto pledge not to raise VAT, income tax, or National Insurance for working people.
Defending Labour’s record after 15 months in government, Reeves pointed to achievements but admitted “there is more to do.” She linked her agenda to the idea of a “Britain founded on contribution” – where hard work is matched by fair reward.
Additional Pledges: School Libraries
Alongside the youth unemployment scheme, Reeves will pledge funding for a library in every primary school in England, addressing literacy inequality. Currently, one in seven state primary schools lacks a library, rising to one in four in disadvantaged areas.
In her speech, Reeves will say:
“I will never be satisfied while too many people’s potential is wasted, frozen out of employment, education, or training. Just as the last Labour government abolished long-term youth unemployment, I can commit this government to nothing less.”
