He was responding to the disclosure by The TES that not all young unemployed people will be offered all the four options - work with an employer, the voluntary sector, an environmental task force, or full-time education. Ministers have told MPs that each young person will be offered a place "on at least one of the options".
Speaking at the TEC National Council conference in Birmingham last week he said it would not be possible to offer all the routes to everyone. "You cannot guarantee that in every place there will be a private-sector employer willing to offer a place," he said.
Everyone would be offered at least one of the options, after their needs had been assessed. "We do intend that there should be choice whenever possible within the options as well as between them. At the end of the day refusal of an offer has to be unreasonable to lose benefit - refusal of an unsuitable offer would not be unreasonable."
If a young person refuses the offer, the case will be referred to an adjudication officer, who will be independent of the Employment Service. The service is responsible for delivery of the so-called New Deal, which is part of the Welfare to Work programme.
Ministers have produced a sanctions flow chart for MPs to show how the appeals system will work. The independent officer will decide whether a young person had "good cause" to refuse an offer. If they do not they will lose benefits. A member of a "vulnerable group", such as an expectant mother, will have access to hardship payments during the sanctions period.
Mr Smith said that the full-time education and training option could last up to a year. There would be a #163;20 million discretionary fund to help meet some of the additional costs. All the four options would include training designed to reach accredited qualifications.
He added: "Just as those working for private employers will be paid a wage, we are keen to move wherever possible towards a position where the voluntary and environmental task force options can be regarded also as waged jobs. We are therefore keen to encourage organisations providing these options to pay wages to young people, and will reflect the fact that wages are being paid in the fee we pass over to them."
On the three options which involve work, the equivalent of one day's training a week on New Deal will be guaranteed, Mr Smith said, and funded at the rate of #163;750 a head. The training must lead to accredited qualifications. Young people would have the support of an adviser to guide them through the options.