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Right counters Labour's youth plan

The Government's plans for getting young people off benefits and into work have been attacked by a right-wing think tank as inflexible and bureaucratic.

Politeia, which is backed by former Conservative ministers Lord Parkinson, Peter Lilley and David Willetts, has put forward its own proposals for cutting unemployment. It has published a pamphlet in which Hugh Sykes, chairman of Sheffield Development Corporation, outlines how to put 200,000 unemployed people back to work in three years.

Politeia's Workstart scheme would involve paying employers a Pounds 60 weekly subsidy for hiring a person under 25 who has been unemployed for at least six months, followed by a Pounds 30 weekly subsidy for a further six months.

And under the Opportunity to Work scheme for the long-term unemployed, employers would be paid up to 100 per cent of the hourly pay rate, with a maximum of Pounds 4.

The proposals come as the Labour Government held its first Cabinet discussions of its "new deal" for under-25s.

The Government plans to offer four options to young people who have been unemployed for six months. They could take a private sector job with employers who would be eligible for a Pounds 60-a-week rebate or work with a voluntary organisation with a weekly wage equivalent to benefit plus a fixed sum. But both options will be limited to six months. Or they could take a job with an environment task force, or go on to a course of full-time study.

The Government plans to offer employers a Pounds 75 subsidy to take on people unemployed for more than two years, financed by the windfall levy on privatised utilities.

Speaking after the Cabinet meeting, Education and Employment Secretary David Blunkett said: "The aim is to help young people to find work and stay in work and to develop and improve their skills so that as a nation we become better able to compete. We have made a long overdue start to meet this challenge. "

In his pamphlet, Working for Benefit, Mr Sykes says the costs of Labour's plans are unclear andits schemes may be too short to help generate a real increase in employment. He says Politeia's schemes offer "the best, most realistic chance of helping large numbers of the unemployed and thereby both boosting the nation's economy and strengthening its social fabric".

Working for Benefit, Pounds 5, from Politeia, 28 Charing Cross Road, London WC2H ODB

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