Labour scraps support for youth benefits in favour of training allowance

Miliband said Labour would end benefits such as Jobseeker’s Allowance and replace them with a “youth allowance” only available to young jobseekers in training, with the amount of money they receive dependent on their parents’ incomes.

He said the aim of the allowance would be to equip unemployed young people with the skills required to gain work.

The funding is reminiscent of the education maintenance allowance (EMA), introduced in September 2004 under the previous Labour government, which saw 16- to 18-year-olds in college or training receive up to £30 a week depending on their household incomes.

The EMA was scrapped in England by the coalition in 2011 but continues in Wales, Scotland and Northern Ireland.

Miliband’s plans are based on proposals made by the Institute for Public Policy Research (IPPR) in its Condition of Britain report – an assessment of the country’s finances following the recession. The report claims that the approach would save £65m but said the exact amount would depend on the final model adopted.

Speaking at the launch of the report this morning, Miliband said the welfare system relies too heavily on providing benefits, rather than preparing young people for work.

He said: “The perversity of the system means that the one thing we most discourage those young people from doing is getting the skills they need for a decent career.

“The system is telling them that they should sign on for benefits not sign up for the proper training, but at the same time it is saying to those who go to university that they are entitled to financial support.

“There can be no better example of a divided country which seems to value the 50 per cent of young people who go to university more than the untapped talents of the 50 per cent of young people who don’t.”

Nick Pearce, director of IPPR, said the country needed "new strategies for social renewal".