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An emergency £500 million plan to help the long-term unemployed back into work will be outlined today as employers, trade unions and ministers try to soften the impact of the growing jobs crisis.
People unemployed for more than six months will be guaranteed more intensive and personalised support to find work as the Government strives to prevent the inevitable surge in unemployment becoming permanent.
Gordon Brown and other ministers will announce “golden hellos” worth up to £2,500 for employers to recruit and train the long-term unemployed; 75,000 training places for people out of work for six months; and cash help for jobless people to set up businesses.
The moves will come at a “jobs summit” in Central London attended by 100 executives from Britain’s biggest companies, welfare providers, unions and employer organisations.
It takes place after predictions that unemployment could reach well over three million next year, and a CBI report that Britain’s financial services sector, which employs one million people, is to cut up to 15,000 jobs over the next 12 weeks.
Last night it emerged that Vauxhall workers are to be saved from compulsory redundancies but will be forced to concede both reduced working hours and cuts in pay, according to the car maker’s American parent.
Speaking at the Detroit Motor Show, Hans Demant, the managing director of GM Europe and a main board member of General Motors, said that the company and unions had agreed to a deal that will protect workers across Europe, including those at Britain’s two Vauxhall plants, from forced redundancies.
The jobs summit today comes amid growing concern that employers, rattled by the grim economic news, will step up redundancies in anticipation of a long, deep recession.
Unemployment grew rapidly throughout most of last year and in the first two weeks of the new year blue-chip companies, including Marks & Spencer, Barclays, Nissan UK and Bovis Homes, have announced job losses.
Economists say that there is a danger of a vicious circle in which job losses and fear of job losses reduce spending by consumers, forcing employers to cut back still further on staffing.
Plunging house prices and share prices have made the problem worse, making people feel poorer.
The overall value of Britons’ accumulated wealth in the fourth quarter of last year fell by about 17 per cent from its level a year earlier, the sharpest drop for more than four decades, according to research by Michael Saunders, the chief European economist for Citigroup.
Ministers insist that the mistake made in previous recessions was not to act to ensure that unemployment was temporary. As a result the downturn was longer than it needed to be and governments faced huge benefit bills.
James Purnell, the Work and Pensions Secretary, will say today that the Government has chosen to invest millions now rather than pay out billions in the future to those on benefits.
Mr Brown will say that the Government will do everything to help those losing their jobs to find work again quickly or to get a new skill.
“We cannot always prevent people losing the last job but we can help people get the next job,” he will say. “Because we are determined to prevent short-term unemployment leading to long-term unemployment with all its consequences, and because we know that the risk of long-term unemployment increases as skills and confidence depreciates, we are setting out a new guarantee of intensive support for anyone still unemployed after six months.”
The sweeteners to employers will be similar to those already offered under the Government’s “new deal” scheme for the unemployed, but it will be tied to particular job-seekers.
A Jobcentre adviser would tell a company that, if it took on an unemployed individual, it could receive an incentive worth £1,000 or so and up to £2,500 if it trained that person as well.
The Government announced an extra £1.3 billion in the Pre-Budget Report to help all unemployed people, including taking on 6,000 extra front-office advisory staff in Jobcentres, and reversing the closure of some centres.
The £500 million released by the Treasury today is specifically targeted at the long-term unemployed.
John Denham, the University and Skills Secretary, will announce the extra 75,000 training places costing £83 million.
Vauxhall employs about 5,000 workers in Ellesmere Port, Cheshire, and in Luton.
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Here we go again! Another new "initiative" from McLabour. Not an update on the magnificent progress made on previous ones - because there wouldn't have been any. We have to wait for the media to confirm things are going nowhere or backwards. Watch for more announcements tomorrow, next day, zzzz.
Padraig, Perth, Australia
So employers will just favour an applicant who qualifies for the £2,500 subsidy above another.
Yet another nu-labour scheme where the main beneficiaries are those employed on bloated salaries to administer it.
It wont create jobs but will just increase government spending even more.
Tom Brewer, Slough, UK
I returned to Canada in 2007 after my hopes of earning a living in England (my birthplace) didn't pan out. If anyone is thinking about their lives in terms of (early) retirement, I wouldn't mind doing some interviewing for my website: www.DiversityinRetirement.net
Sue McPherson, Oshawa, Ontario, Canada
@brimel, montignac
Brimel, please do your sums correctly!!!!!!!!!!!!!!!
Darren Ward, Manchester, UK
A time of rising unemployment is not the best moment to launch a campaign like this one.
Martin, Newmarket, Suffolk
BrummyDoug - I couldn't agree more
Mullarkian, York,
Brown is finding out the hard way that a Soviet-style centrally planned economy doesn't work. If he wants to create sustainable employment in the UK, he needs to unpick much of the regulation introduced over the last ten years, especially the 'skills' quangos which have completely failed.
MarkS, Leeds,
Where are the jobs? And the cost to the tax payer of administering such a scheme? More fiddling while the UK burns. Labour, you need to WAKE UP. People are worse off working 40 min. wage hr weeks than they are on benefits. The jobs don't exhist. We dont manufacture we service. The UK is finished!
Chris, Notts,
Digging one hole and filling the old one is no answere?
All jobs must have a reason for their existance, the shops and
factories must produce needed goods, per consumers needs.
Cllr Ken Tiwari (Independent), oxford, United Kingdom
All these billions been borowed by the government to keep people in work will have to be paid back by our children.
When is the government going to learn, that they and the people have to live within there means. only then will we begin to build a stable economy. out of bancrupt britain now exists
armstrong, derby,
This is yet another gimmick from Nu Labour. Frankly, most businesses will be hard pushed to retain their own staff during the crisis, let alone start someone new.
Davi, Newcastle,
And just what jobs are these people going to do? And if there were any jobs half of Eastern Europe would be working in them.
Mark, Leeds,
£500 million! How far will that go when unemployment is rising as rapidly as it is! Brown et al are running round like headless chickens desperate to save their own jobs when they finally decide to go to the polls. Its far too late though. Depression here we come!
sophie smith, london, uk
How can people get a job where there are hardly any jobs?
It does not add up.
If companies are cutting back where is the incentive for them to employ?
Apprenticeships schemes should have been put in place years ago.
Too little too late .
And i am not aiming this at the Labour government ...
Adam Ball, London, England
so basically the government have been reduced to wasting even more public money bribing employers to hire british workers, it's only because of their disaterous immigration policies that they need to do this in the first place.
mark, bury st edmunds, uk
New Labour call it training. I call it, fiddling the unemployment figures before a general election to make the economy look not as bad as it actually is.
David, Harwich, UK
Do the Employers have to repay the money if they don't keep the Employee; or can they just get rid of them after a few months and claim another "bounty" for the next one; as happened last time a UK Government did this.
Martin, Poole, UK
When Gordon is going to create 100,000 new jobs, how does this tie in with the 70,000 civil service jobs he was going to cut during the 2005 election?
I find it staggering to think that some people still believe things that this government says.
Tom Mein, Chania, Crete
So the jobless must stay out of work and claiming Job Seekers for a full sixh months. That is quite a target to aspire to bearing in mind if you are not at the front of the queue at the Job Centre in time you lose it and start again at week one. My son has been trying to achieve that for 5 years now
Sue Doughty, Twyford, UK
More money wasted by grasping at straws!
The number of jobs available is FALLING! This is like trying to swim against the tide. It just won't work! No jobs = more unemployed. Accept it! Get on with it!
Of course this means more money will have to be available for benefits. From where?
Oh dear.
Darren Ward, Manchester, UK
"£2500 to get the jobless back to work". Yet another predictable Labour kneejerk reaction to events! It appears they never learn! Welcome Britain to 'Third World' status, thanks to New Labour. Mark my words, civil unrest is looming!
Rod Ballard, Leicester,
Labour could have invested this kind of money wisely in providing increasing the quality of the Jobcentre Plus service over the last decade, for example they could have provided better support, more incentives and initiatives and of course proper training programs. More soundbites....
AJ, Hove,
Hardly an adequate incentive when employees can cost employers thousands in spurious sick leave and threatened employment tribunals.
Present employment legislation is so weighted in favour of employees that it is mad to employ anyone at all that you absolutely do not have to.
BrummyDoug, Birmingham, England
Dear Gordon, why don.t you give the 65,000,000 inhabitants of the once great UK, £ 1,000,000 each!. that would only cost £65,000,000, a real bargain. We may even be willing to pay the tax on it, and vote for you next time. Sorry , delete the last remark, silly me !!!!.
brimel, montignac de lauzun, france
How much of the £2,500 "incentive" will be swallowed up in increased employer's NI contributions? Brown's panicking - and true to form he's throwing money at the problem, hoping some will stick.
Ian, London, UK
Firms only employ people if they generate more income than they cost (including significant NI costs ) # 2,500 is insignificant in this calculation especially given the cost of dismissal if things don't work out.
R James, Bristol,
Graham, Shaun,
The £2,500 is paid to EMPLOYERS - not to employees.
John, Bognor Regis, UK
I have been out of work for 2 years but can't claim Job Seekers Allowance.
Will I be entitled to the same 2500 pound incentive that an officially jobless person will get??? Yes we all know its NO.
Its looks as though its going to get even harder for me to find work, thanks to social engineering.
Graham, St. Albans, uk
There are those who want to work, Those who won't work and.. Those who pretend to look for work. Which ones will get the £2,500?
As Meatloaf once sang.... Two out of Three aint bad!!!
Last one to leave England, please turn out he lights!!
Shaun, Newcastle, Tyneside
With Respect the biggest Barriers I faced seeking work and keeping it were the negative and derogatory attitudes of Employers and the work force there was so much stigma/ discrimination going on regardless of how well I did the job, however keen I was to get the job stop the stigma first please.
Paul Davidson, Gateshead, England