Best thing we can offer young people is a job, not benefits, says chancellor

• Published

The chancellor has warned against allowing Britain's benefits bill to balloon while not offering young people opportunities.

John Healey told Labour's annual conference in Liverpool that cutting welfare spending was "more than an economic must - it's a moral duty".

"The best thing we can offer a young person is not a benefit payment - it's a first job with training and a wage," he said.

He announced the expansion of a Local Apprenticeships Service for mayors in England, which he said would deliver thousands more apprenticeships for young people.

Healey's speech comes as he faces pressure to cut public spending or raise taxes ahead of next month's Budget to bring down government borrowing costs.

In an attempt to reassure the markets, he said all promises the government made would be "built on the rock of fiscal discipline" with him and Prime Minister Andy Burnham "united on meeting the fiscal rules".

Fiscal rules are the government's self-imposed constraints to manage decisions on spending and tax.

The Budget would "give families and businesses a bit of breathing space", the chancellor said.

And he admitted that "the money New Labour had in the '90s is simply not there now".

Healey blamed the Conservative Party's time in government for leaving Britain spending more on debt than on the Home Office, Ministry of Defence and Ministry of Justice combined.

Tory shadow chancellor Andrew Griffith said in response to the speech that "Labour MPs will never support cutting the out-of-control welfare bill" and "with Labour, it's always more taxes if you work and more benefits if you don't".

Healey praised young people as "digital natives, whip-smart, questioning, ambitious, brave" who could move from "generation jeopardy to generation hope".

But he pointed to the million young people not in education, employment or training - known as Neets - which he said created a necessity to make benefits a bridge into work, rather than a "trap".

"It is not progressive to allow a bigger and bigger benefits bill, and a system which offers an income but doesn't offer a future," he said.

Apprenticeships promise

The Local Apprenticeships Service was initially planned as a pilot in a limited number of areas but would now be available to any English mayor who wants it, he said.

Through the scheme, which the Treasury says will roll out across England from March 2027, local teams plan to match young people with employers, including small businesses that have never taken on a trainee.

The department said an extra £100m was going into the scheme, "fully funded" by savings from the Department for Work and Pensions.

Powers to implement the scheme will rest with mayors because "they know which firms are hiring, which colleges are delivering, which estates have been left behind," Healey said.

It comes as the final instalment of a major report by former minister Alan Milburn is expected to set out recommendations for tackling the one in eight people aged 16 to 24 in the UK who are Neets in the coming weeks.

Healey said these young people had been "signed off, written off" which the Labour government would address.

Helen Miller, director of the Institute for fiscal studies think tank, told the BBC that sticking to fiscal rules alone would not be enough to reduce debt because it is "basically a promise to get down debt tomorrow".

She suggested that reducing the benefits bill, including removing support from some people, could be one way of cutting the national debt sooner.

Elsewhere in his speech, Healey repeated his promises to re-industrialise the country and said Rolls Royce would invest £300m more into its British factories in Derby, Bristol, Glasgow and Rotherham.

He also said he was bringing back the Union Learning Fund in England, established in 1998 and abolished by the Tories, to help working people gain more skills in an age of artificial intelligence. It was initially unclear how this would be funded.

• Healey to promise 'new age of industrialisation' for UK in conference speech - Published7 hours ago

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