McFadden says some people will lose benefits in future as Neets review looms

Some young people will not receive benefits they are currently eligible for in future, Pat McFadden has said ahead of the publication of a major review aimed at tackling the rise in youth unemployment.

The Work and Pensions Secretary said a “complete reset” of the system was needed to help 16 to 24-year-olds not in education, work or training, the number of whom topped one million earlier this year.

Amid concerns among some backbenchers about the extent of future support, he urged MPs to view the changes as a “different proposition” to last year, when the Government abandoned planned welfare cuts in the face of rebellion.

It comes ahead of the release of Alan Milburn’s review of the so-called Neets – under-25s not in employment, education or training – on Tuesday, which is expected to recommend radical changes to reduce welfare dependency.

Mr Milburn has said some young people will receive less financial support under his proposals, which include moving them off some health-related benefits and onto a new “youth allowance” paid at the standard rate of universal credit.

Asked whether he agreed that some people should lose the welfare they currently receive, the Cabinet minister told the BBC’s Sunday With Laura Kuenssberg show: “There will be people in the future who will not get what they would get today.

“When people come up for reassessment, they go on to a new system but, as I say, people are reassessed today under the current system.”

He declined to say whether the overall working-age benefits bill would be lower by the next election, adding: “Look, I can’t say that – we uprate benefits every year, and I think it’s important to keep people up with the cost of living.

“These are some of the poorest people in the country, and the best way to get the benefits bill down is with the long-term reset that we are talking about.”

Alan Milburn said young people deserve a ‘legal guarantee’ of work, training or employment support (PA)

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Andy Burnham has called the politically sensitive report a “watershed” moment but stopped short of promising to accept its recommendations in full or provide a “blanket assurance.”

The Prime Minister also insisted paying for the reforms would not mean “more money” but “spending differently” in Government when pressed on the large upfront investment they are expected to require.

Amid questions about whether Government will be able to win the backing of its MPs over any changes it adopts, Mr McFadden argued ministers must make reforms not “in spite of being Labour people”, but “because we’re Labour people”.

“If you’re 20 right now and you sign on to long-term sickness benefits, you’ve got more chance of marking your 30th birthday and still being on them than having a steady job in between,” he said.

“And the reason we have to change that isn’t in spite of being Labour people, it’s because we are Labour people.”

He told Sky News’ Sunday Morning show: “It’s a different proposition from last year, and I hope that Parliament views it in that light.”

“We need a complete reset of the system in terms of what it offers young people to get these numbers,” he said.

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Mr Milburn said it would take 10 years to get to a “reasonable level” of Neets, arguing that moving faster or tougher would merely result in “crude cuts” that see young people showing up elsewhere in the Government ledger.

He said investment would likely run into the “billions” over this period, adding: “But what you get back is you get welfare savings back, and then you get the so-called fiscal benefits of young people not being reliant on a benefit but being paid a wage.”

The former Labour health secretary, who was commissioned by Sir Keir Starmer’s government to carry out the review after it was forced to water down its own welfare plans in the face of a backbench revolt, also said young people deserve a “legal guarantee” of a route into work.

The proposal was backed by the Work and Pensions Secretary, who on Sunday said employment support needed a “legislative underpinning” with people given “more certainty about what they’re entitled to.”

Asked this would result in young people having the right to sue if there were no opportunities available to them, Mr Milburn told the BBC: “We’re going to avoid that elephant trap, believe me.

“But we are going to have a duty on Government to provide opportunities.

“We’re calling it the opportunity guarantee, so there should be a guarantee for a young person because at the moment the only guarantee they’ve got is to a very simple thing, to get a benefit.”

Shadow work and pensions secretary Helen Whately tentatively backed other elements of Mr Milburn’s approach (Maja Smiejkowska/PA)

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Shadow work and pensions secretary Helen Whately said the creation of legal entitlement “might sound a nice thing to do” but “doesn’t make sense”.

But the Tory frontbencher tentatively backed other elements of Mr Milburn’s approach, saying his focus on moving away from “handing out cash for relatively mild conditions” and towards employment support was “the right direction of travel”.

“We think he should do it for all ages, not just under 25. You should not have a different system for a 24-year-old and a 26-year-old,” she told Sky.

Reform UK’s Danny Kruger similarly said he was “encouraged” by “the suggestion that we need to be much stricter about benefits for young people who should be supported into work or should be working”.

But he added that he did not expect Labour to accept this, telling the same programme: “There’ll be indications that they want to, but the fact is, as we saw with Keir Starmer’s rather weak attempt to make a couple of billion pounds of savings from the welfare bill last year, the backbenchers won’t take it.”

The MP added: “I expect Labour will end up taking the extra spending on support for young people, but they won’t do the cuts. What we actually need to do is to take a much more robust approach.”