By Judith Ugwumadu | 10 March 2014
Labour’s job guarantee for young people will be fully funded for the duration of the next Parliament through a levy on bankers’ bonuses and a cut in pension tax relief, the party said today.
The Compulsory Job Guarantee would see people aged between 18 and 24 given a tax-subsidised job that they will have to take up or risk losing their benefits. The scheme will also apply to adults aged 25 or over who have been claiming Jobseeker’s Allowance for two years or more.
Funding for the policy will come from a tax on bankers’ bonuses, which, on a ‘cautious estimate’ would raise between £1.5bn and £2bn, and fund the first year of the scheme. Thereafter, funding will come from a reduction in pensions tax relief for high-earners to 20%, the same rate as basic-rate taxpayers. The House of Commons Library has estimated that this will raise £900m to £1.3bn each year.
No other policy will be funded by the bank bonus tax and the proposed changes to pension tax relief, Labour added.
Shadow Chancellor Ed Balls said: ‘It’s shocking that the number of young people stuck on the dole for more than a year has doubled under David Cameron. For ten years of thousands of young people who cannot find work this is no recovery at all.
‘We’ve got to put this right. So if Labour wins the next election we will get young people and the long-term unemployed off benefits and into work.
‘The government will work with employers to help fund paid work with training for six months. It will mean paid starter jobs for over 50,000 young people who have been left on the dole for over a year by this government.’
