Shadow work and pensions secretary Rachel Reeves says Labour would not consider scrapping out-of-work benefits for people under 25, after it was suggested by the IPPR think tank.
In a report from the Institute for Public Policy Research, a centre-left leaning think tank, it was suggested that unemployment benefit for people under 25 could be replaced with a means-tested “youth allowance”.
To claim the allowance, young people would need to prove they were in “purposeful training” or conducting an “intensive job search”.
IPPR said that the allowance would be set at £56.80, the same level as Jobseekers’ Allowance (JSA), and that young people with parents earning more than £25,000 a year could not claim it.
Our policy is a jobs guarantee for young people, not taking away benefits. Labour spokesperson
The report added that there should be an assumption that up to the age of 22, young people should be housed by their parents.
The Daily Telegraph reported that Ms Reeves was considering adopting the policy, amid hints that Ed Miliband is keen to take young people out of the benefits system.
But Ms Reeve rejected the suggestion. Tweeting in response to the report, Ms Reeves said: “This is not and will not be our policy”, “it’s not our plan” and “it is totally not my position!”
A Labour party spokesperson said: “Our policy is a jobs guarantee for young people, not taking away benefits.”
Prime Minister David Cameron indicated last month that, if he is re-elected in 2015, under-25s would be compelled to “earn or learn”.
The IPPR report suggests that the youth allowance would be away to save money spent on benefits for young people.
The number of Neets in the UK is a scar on our nation and represents our generations’ failure in its responsibility to the next. Graeme Cook, IPPR
It says that the UK should follow the example set by the Netherlands and Denmark in order to cut the number of young people in the UK classed as Neets (not in education, employment or training).
The report says that just four per cent of 15-24 year-olds are Neets in the Netherlands, and seven per cent in Denmark – compared with 14 per cent in the UK.
“The number of Neets in the UK is a scar on our nation and represents our generations’ failure in its responsibility to the next,” Graeme Cook, IPPR research director said.
“Our goal should be to effectively abolish Neets, as they have successfully done in the Netherlands and Denmark.”
Last year, the UK spent £2.5bn on out-of-work benefits for under-25s, the report said.