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Can Labour deliver on New Deal jobs?

The New Deal for the young unemployed deserves only a single cheer at this stage. That is despite the claim by the Chancellor of the Exchequer that the Government is moving from promise to achievement. Sceptics will believe there is more than rhetoric only when the figures for youth unemployment go down and stay down.

The sums of money to be spent across the United Kingdom are impressive. The Pounds 3 billion is to come from the windfall tax paid by privatised utilities on what the Government considers their excessive profits. So the aim is to fulfil a key election objective in education and employment on the back of a politically inspired levy popular with Labour voters. The question is whether the money will be well spent.

Scepticism - the reason for withholding a second cheer - is based on previous disillusion. Since the first days of the Youth Opportunities Programme there have been repeated, well intentioned attempts to reduce youth unemployment and increase the level of skills. Margaret Thatcher's favourite minister, Lord Young, was responsible through the Manpower Services Commission for the Youth Training Scheme to which was attached exactly the rhetoric and high-flown expectations accompanying this week's launch of the New Deal. YTS came to be derided as a way of massaging the employment figures and providing little permanent benefit to young people. At this week's launch of the Tayside Pathfinder pilot for the national New Deal and at ministerial visits to companies and a jobcentre in the area there were mutterings about lack of workplaces for young people and inadequate incentive for employers to hire them.

The New Deal can learn from experience. It is also fortunate in its timing: more employers are looking for trained workers than are shedding them. There is widespread concern about the narrowness of the skill base and the stuttering progress to national training targets. The reduction in payouts through the jobseeker's allowance, a reflection of economic buoyancy reducing youth unemployment, means that the Chancellor is considering extending the New Deal to the over-25s.

A third cheer is silenced by the Government's reluctance to establish clear water between its employment and training initiative and welfare proposals. The basis of the New Deal is that young people who refuse all the options get no benefit. That will be welcome to people fed up with publicity about able-bodied young men doing nothing but watch daytime television. The options on offer are probably comprehensive enough even in areas of high unemployment.

But if the New Deal is extended to single mothers and the disabled, as Gordon Brown proposes, would there be a benefit cut for those remaining outside? The Government's mishandling of welfare strategy undermines confidence in another of its ambitious aims.

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