The Labour Party’s economic stance took centre stage in Liverpool today as Rachel Reeves, the Shadow Chancellor, announced a new Youth Guarantee scheme. Aimed at tackling youth unemployment and long-term joblessness, the proposal includes funded job placements and stricter conditions for receiving benefits.
Reeves’ remarks mark a sharp intervention in the welfare debate, highlighting her intent to reform support systems and ensure every young person is either in work, training or education. She stressed that benefits should not be seen as an “alternative” to employment, as the party seeks to distance itself from policies perceived as overly lenient.
Paid Work Placements and Sanctions for Young People
The core of the new proposal is a guarantee for all unemployed young people to receive either a place in college, an apprenticeship, or one-on-one employment support. For those still out of work after 18 months, the scheme promises a paid work placement. According to Reeves, this initiative is designed to “end the waste of potential” among Britain’s youth.
Addressing the conference, she stated: “I will never be satisfied while too many people’s potential is wasted, frozen out of employment, education, or training. There’s no defending it.” She added that this exclusion damages individuals and weakens the economy over time.
The Youth Guarantee comes with a strong incentive structure. As Reeves explained during a morning interview with Sky News, claimants who decline reasonable offers will face sanctions. “It’s not the case that unemployment benefits or Universal Credit are an alternative to work,” she said. “You can’t say no, I don’t fancy doing that, I’d rather stay on the benefits.”
Tackling Inequality and Positioning Labour on Fiscal Discipline
Beyond youth unemployment, Reeves used her platform to reaffirm Labour’s broader economic message—centred on discipline and equality of opportunity. She emphasised a vision of Britain “based on opportunity”, where “ordinary kids can flourish, unhindered by their background”.
The Chancellor also responded to recent public debates involving Andy Burnham, warning that borrowing beyond sustainable levels would mirror the fiscal instability seen under Liz Truss. According to The Times, she stated: “If he’s saying… anybody that says you can just borrow more, I do think that risks going the way of Liz Truss.”
Reeves also supported Prime Minister Keir Starmer’s rejection of Reform UK’s immigration policy, calling their stance on indefinite leave to remain “a racist policy” during an interview with Times Radio. However, she was careful to draw a distinction between the policy and its supporters, saying, “That doesn’t mean that people that support Reform are racist, absolutely not.”
