(Updates with comments from Clegg in ninth paragraph.)
Nov. 25 (Bloomberg) -- Britain pledged 1 billion pounds ($1.55 billion) to tackle youth unemployment after the number of jobless 16-24-year-olds passed 1 million for the first time in 19 years.
A “youth contract” starting in April 2012 will provide 410,000 work places over three years for young people, including wage subsidies for 160,000 jobs and 250,000 work-experience placements, Deputy Prime Minister Nick Clegg told students in Leeds today. There will also be payments to employers to encourage 20,000 apprenticeships under the program, which will be included in Chancellor of the Exchequer George Osborne’s economic statement on Nov. 29.
“Youth unemployment is an economic waste and a slow-burn social disaster,” Clegg said. “We want to give every young person a reason to get up, a reason to go out, and a reason to feel great at the end of the day.”
Employers will be paid 2,275 pounds to cover half of the youth minimum wage for six months in return for taking on 18-24- year-olds as part of the program, Clegg’s office said.
Liam Byrne, work and pensions spokesman for the opposition Labour Party, questioned how the plan would be paid for, describing it as “a back-to-work scheme on the cheap.”
Clegg told BBC radio that Osborne will set out details of both spending commitments and savings and they will “balance out.”
He added that he wanted the cost of reducing the deficit to fall hardest on the wealthiest. The government has increased capital-gains tax, imposed a levy on bank balance sheets and closed tax loopholes used by the rich “and you will see more of that in the future,” Clegg said. “The broadest shoulders will bear the greatest burden.”
Unemployment among 16-24-year-olds in the third quarter increased by 67,000 to 1.02 million, the highest level since comparable records began in 1992, the Office for National Statistics said on Nov. 16. The jobless rate in that category was a record 21.9 percent. More than a quarter of young jobseekers had been out of work for more than a year.
“We won’t allow the children brought up in the boom to bear the brunt of the bust,” Clegg said in his speech. “The next generation must not pay the price for my generation’s mistakes. So the coalition government won’t sit on our hands and let a generation fall behind.”
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