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Labour pledges 'jobs guarantee' for long-term unemployed Labour pledges 'jobs guarantee' for long-term unemployed
(about 1 hour later)
  
The Labour Party says it will guarantee a job for the long-term unemployed, if it is re-elected. Labour has said it would offer the long-term unemployed a guarantee of a six-month job if it was in government.
Shadow chancellor Ed Balls said the scheme would be paid for by restricting the tax relief on pensions for those earning over £150,000 a year, Shadow chancellor Ed Balls said the scheme would be paid for by restricting the tax relief on pensions for those earning over £150,000 a year.
The party has pledged £1bn to enable employers to meet the cost of hiring the 130,000 people who have been out of work for more than two-years.The party has pledged £1bn to enable employers to meet the cost of hiring the 130,000 people who have been out of work for more than two-years.
But David Cameron said the coalition's welfare-to-work scheme was "massive".But David Cameron said the coalition's welfare-to-work scheme was "massive".
And the Treasury said Labour was trying to spend the same money twice and that Mr Balls had already earmarked cuts in pension tax relief to reverse austerity measures. And the Treasury said Labour had already earmarked cuts in pension tax relief to reverse austerity measures.
Under Labour's plan, the long-term unemployed would be offered 25 hours of work a week at the national minimum wage for six months. Under Labour's plan, the long-term unemployed would be offered 25 hours of work a week in the private or voluntary sectors at the national minimum wage for six months.
Those who did not accept the offer of a suitable job faced having their benefits cut. Welfare debate
The opposition said 129,400 people would currently be helped by the plan and those who did not accept the offer of a suitable job faced having their benefits cut.
The scheme expands Labour's existing jobs guarantee proposal which has up to now only covered 16-24 year old job-seekers.The scheme expands Labour's existing jobs guarantee proposal which has up to now only covered 16-24 year old job-seekers.
Mr Balls said 129,400 people would currently be helped by the plan, which would be entirely paid for by limiting tax relief on pension contributions made by the 2% of UK earners with incomes of more than £150,000 a year. BBC political correspondent Vicki Young said Labour were setting out what should be done now rather than committing themselves to the measures if they were returned to power after the next election - scheduled for 2015.
But the government says its back-to-work plans are already helping hundreds of thousands of people get jobs. The initiative, she added, had to be seen in the context of the political debate over welfare reform and government accusations that Labour are not committed to reducing welfare bills and sanctions for those not prepared to look for work.
The BBC's political correspondent Iain Watson said: "Next week, Labour will vote against government proposals to cap the rise in most benefits to just 1%. Labour's shadow work and pensions spokesman Liam Byrne said the long-term unemployed needed to be "working or training and not just claiming".
'Tough and fair''Tough and fair'
"So they're keen not to be seen as 'soft on scroungers' and to show they have their own solution to bringing down the benefits bill." The job subsidies, he added, were an acknowledgement of the fact that businesses expected to make a profit and would not take on new staff "for nothing".
While the headline rate of unemployment has fallen in the each of the last seven months, Labour says the number of long-term jobless is more than it was a year ago and nearly 150% higher than at the same time in 2010. While the headline rate of unemployment has fallen in the each of the last seven months, Labour says the number of long-term jobless is nearly 150% higher than in late 2010.
Mr Balls' proposal would see subsidies for six-month placements in the private or voluntary sector, enabling firms and charities to take on staff on a temporary basis. At the end of Labour's six-month scheme, workers would have to find a permanent job or revert to claiming jobseeker's allowance.
At the end of the six months, workers would have to find a permanent job or revert to claiming jobseeker's allowance.
The £1bn cost of the scheme - which Labour hope could eventually be extended to those out of work for 18 months or a year - would be funded by introducing a 20% limit on tax relief on pension contributions for those earning £150,000 a year or more.The £1bn cost of the scheme - which Labour hope could eventually be extended to those out of work for 18 months or a year - would be funded by introducing a 20% limit on tax relief on pension contributions for those earning £150,000 a year or more.
Chancellor George Osborne announced plans in last month's Autumn Statement to reduce the annual tax relief on pension contributions from £50,000 to £40,000 and lower the amount of relief anyone is entitled to in their lifetime from £1.5m to £1.25m. Labour said the 50% limit on tax relief on pensions for the highest earners should be brought into line with the 20% level for basic rate taxpayers - a proposal which is similar to one announced in 2009.
But Labour said the 50% limit on tax relief on pensions for the highest earners should be brought into line with that for basic rate taxpayers, arguing it "cannot be right" that the top 2% of earners received more than twice the level of tax relief on their contributions.
The tax proposal is similar to one announced by Labour in 2009.
Labour has said ministers' flagship Work Programme has proved "lamentable" and that the government would not achieve its goal of reducing welfare bills if thousands of people were out of work for prolonged periods.
'One Nation approach''One Nation approach'
Mr Balls said: "A One Nation approach to welfare reform means government has a responsibility to help people into work and support those who cannot. Mr Balls added: "A One Nation approach to welfare reform means government has a responsibility to help people into work and support those who cannot.
"But those who can work must be required to take up jobs or lose benefits as a result - no ifs nor buts. Britain needs real welfare reform that it tough, fair and that works.""But those who can work must be required to take up jobs or lose benefits as a result - no ifs nor buts. Britain needs real welfare reform that it tough, fair and that works."
Ministers say the Work Programme, in which firms and charities are paid to help find jobs for the long-term unemployed, is "on track" despite opposition criticism.Ministers say the Work Programme, in which firms and charities are paid to help find jobs for the long-term unemployed, is "on track" despite opposition criticism.
Figures published in November showed only 3.53% of people on the scheme found a job for six months or more - against a coalition target of 5.5%.Figures published in November showed only 3.53% of people on the scheme found a job for six months or more - against a coalition target of 5.5%.
But the government insists progress is being made and that nearly 10% of the initial participants have got into work and stayed there for six months, while 50% of those who have taken part have come off benefits.But the government insists progress is being made and that nearly 10% of the initial participants have got into work and stayed there for six months, while 50% of those who have taken part have come off benefits.
In an interview with BBC 5 Live Breakfast, Mr Cameron said a million private sector jobs had been created since the coalition government came to power in May 2010. In an interview with BBC 5 live Breakfast, Mr Cameron said a million private sector jobs had been created since the coalition government came to power in May 2010.
"We are dealing with the deficit. We are cracking long-term problems that have faced the country for too long. We are seeing a rebalancing of the economy.""We are dealing with the deficit. We are cracking long-term problems that have faced the country for too long. We are seeing a rebalancing of the economy."
In contrast, he said Labour was "just not focused on the big challenges" confronting the UK such as the need to secure sustainable growth and reform welfare.In contrast, he said Labour was "just not focused on the big challenges" confronting the UK such as the need to secure sustainable growth and reform welfare.