Ministers will signal a fresh fight with Labour MPs over welfare reform on Monday, amid rising panic about the number of young people signed off sick.
Work and Pensions Secretary Pat McFadden will unveil a £1billion scheme designed to help 200,000 young people into work or apprenticeships.
But he will also warn Labour MPs that the Government can no longer afford to duck welfare reform.
Last year, Labour MPs forced it to abandon ‘cruel’ plans for £5billion in welfare cuts.
But Mr McFadden will call for a major shake-up of a system that ‘too readily funnels [young people] down a path labelled “unfit for work”‘.
He will cite shock figures showing that someone aged under 25 on sickness benefits is now less likely to find work than someone aged over 55 and in poor health.
Mr McFadden will warn that youth unemployment risks ‘lifelong consequences’ for those affected.
The warning comes as new figures reveal a sharp rise in the number of jobless young people citing health problems as the reason they are not working.
Work and Pensions Secretary Pat McFadden will tell Labour MPs the Government can no longer afford to duck welfare reform
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The share of 16 to 24-year-olds not in education, employment or training – known as Neets – who reported a work-limiting condition has surged by 70 per cent in a decade.
The trend is potentially putting this generation ‘at even greater risk of harm to their future opportunities’, the Health Foundation said.
Research by the think tank found that between 2015 and 2025, the share of Neet young people who reported conditions that stop them from working increased from 26 per cent to 44 per cent.
Last year, mental health problems and autism made up more than two-thirds of Neet youngsters who cited health issues as a barrier to employment.
According to the Office for National Statistics, the number of Neets aged 16 to 24 was 957,000 in the three months to December up from 946,000 in the previous quarter.
Mr McFadden will outline a string of initiatives designed to tackle the rise in youth unemployment since Labour came to power. The party has been blamed for fuelling the problem through a £25billion raid on National Insurance, increases in the minimum wage and the introduction of a wave of new employment rights, which have discouraged firms from taking on young staff.
Mr McFadden’s measures include a £3,000 ‘youth jobs grant’ paid to employers for every young person aged 18 to 24 whom they employ.
Small and medium-sized firms will also be offered £2,000 for each young apprentice they take on. And the ‘jobs guarantee’, which finds work for those who have been jobless for 18 months, will be extended to all young people up to 24. The number of apprenticeship places for older workers will be curbed to free up more for the young.
Mr McFadden said the plans offered ‘life-changing opportunities to young people’.
But shadow work and pensions secretary Helen Whately blamed Labour for the rise in youth unemployment, saying: ‘The best way to tackle this is to back businesses to create jobs, not tax them out of existence to fund benefits and subsidies,’ she said.
