Miliband will announce that a Labour government would end Jobseeker’s Allowance (JSA) payments to young people aged between 18 and 21 and instead pay them a parental means-tested allowance to remain in training or work.
The policy, which drew on recommendations made by the Institute for Public Policy Research, would not apply to those undertaking internships, a Labour spokesman confirmed.
“We must reshape our social security system so that it does everything it can to get people into decent jobs and the world of work not a life on benefits,” Miliband will say.
“Britain’s young people who don’t have the skills they need for work should be in training not on benefits.”
The new scheme could save £440m a year according to IPPR estimates. The cost of supporting young people through the youth allowance would be £375m, providing a £65m per year net saving.
The announcement demonstrates a marked change in Labour’s welfare policy and a tougher approach to those who claim benefits, in favour of a culture of contribution. “It is a principle deeply felt by the British people that people should get something back for all they have put in and not get something for nothing,” the Labour leader will say.
Alongside the youth allowance announcement, Miliband will firm up a commitment to raising the number of years people must work to claim contributory JSA payments from two to five years, and call for greater devolution for councils to tackle the housing shortage.
Miliband has suffered a number of disappointing poll results recently, with new figures from research firm ICM this week showing the Labour leader sink to an approval rating of minus 39 – even below Nick Clegg, and the worst rating he has recorded.