Firms to be paid to hire unemployed young people

Companies are to be paid grants to hire more young people under new government proposals to tackle youth unemployment.

Ministers want to create 200,000 jobs and are pledging £1bn in funding for several initiatives.

Businesses will receive £3,000 for every person between the ages 18 and 24 that they employ who has been searching for a job for six months or more, while small and medium firms will be paid £2,000 for every new apprentice they take on.

Labour has faced criticism from the Conservatives over "disappearing" work opportunities. In the final quarter of last year, the number of young people not currently in education, employment or training - also known as Neets - neared one million.

Work and Pensions Secretary Pat McFadden is set to announce the Youth Jobs Grant on Monday.

Some 60,000 people are expected to be supported by the proposals.

An existing jobs guarantee assuring young people a six-month job if they are on Universal Credit and have been looking for work for 18 months will also be expanded from the current age range of 18-21 up to 24-year-olds.

McFadden said the new measures would giving "life-changing opportunities to young people" that will "significantly reverse the increase we inherited in those not in education, employment or training".

"We are focusing funding where it's needed most and giving employers the flexibility and support they've asked for," he continued.

Prime Minister Sir Keir Starmer said "these reforms underpin our ambition to create an economy that works for everyone, closing the skills gap and supporting more young people into meaningful employment".

Michelin star chef Tom Kerridge gave his backing to the scheme, saying "these incentives will give our industry a great boost".

The Conservatives have claimed the government's Employment Rights Act and hike in national insurance contributions on employers has had an impact on young people looking for work.

Shadow work and pensions Secretary Helen Whately said "the best way to tackle youth unemployment is to back businesses to create jobs, not tax them out of existence to fund benefits and subsidies".

The Conservatives say they would cut business rates for "thousands of high street businesses" and "roll back" the legislation coming into effect later this year.

Under the act, which applies to England, Scotland and Wales, workers will have the right to claim unfair dismissal from six months into their employment. Currently, there is a two-year qualifying period.

Labour had pledged to offer all workers the right to claim unfair dismissal from their first day in a job as part of their election manifesto.