Workshy youngsters to lose benefit
By George Jones, Political Editor

New Deal

UNEMPLOYED youngsters who turn down repeated job offers could lose all their welfare benefits under a tightening of the New Deal for the jobless announced yesterday by Gordon Brown.

Holding out the prospect of full employment in Britain within a generation, the Chancellor said the Government's flagship programme for the unemployed - financed from the £5 billion windfall tax on the privatised utilities - would continue into the next Parliament.

 At present, young people who turn down job opportunities can lose 40 per cent of their benefits. Mr Brown is considering increasing this sanction, possibly up to 100 per cent, for 18 to 24-year-olds who persistently refuse to take a job.

 He said full employment would be achieved only if "those who can work take the responsibility to work". That was why Labour was making the "New Deal a permanent deal".

 He described it as "rights backed by responsibilities" - the Government would help youngsters to find a job or get trained but, in return, they no longer had the option of a life on benefit at a time of job vacancies. The New Deal, originally intended for young jobless, will be extended to adults.

 Because unemployment has fallen faster than expected, the Treasury says there is enough left from the original £5 billion to extend the programme until after the next election without making additional spending commitments at this stage. Mr Brown, who addressed the conference against a background of renewed reports of a rift with Tony Blair, delivered a barnstorming speech. He received a standing ovation despite reiterating his message that he would not permit a pre-election spending spree.

 Mr Blair and Mr Brown put on a deliberate display of unity and the Prime Minister led the ovation for his Chancellor. But it was a speech in which Mr Brown staked his claim to succeed Mr Blair and reinforced his image as the second most powerful politician in the Government.

 Mr Brown delighted delegates with a fierce attack on the Tories, branding them as extreme and proving "unfit even to be an Opposition". He also made clear that the Labour leadership views Michael Portillo as a threat and will mount an all-out onslaught on his attempts to present a more "caring Conservatism" image if he is selected for the Kensington and Chelsea by-election.

 Mr Brown, while burnishing his credentials as the guardian of Labour's social conscience, delivered a speech containing strong New Labour overtones. He even managed to utter Mr Blair's mantra of the "third way " - though he quickly went on to use the "s" word, declaring: "Our socialism - credible and radical.

 He added: "Britain can deliver, in our generation, employment opportunity for all - a goal that this party and this movement has long sought, a goal now within our reach for the 21st century - full employment for our country." 

Mr Brown said there could be no going back to old Labour ways of managing the economy. He said: "Let's be honest with ourselves. We must never again become a party that is seen as anti-success, anti-competition, anti-profit and anti-markets.

 "Our enemy is not markets but monopoly, not competition but cartels, not profits but privilege and greed."

 But he promised action against "rip-off Britain" - uncompetitive practices that had pushed prices far above what American consumers paid. The Government would be seeking new powers to require high street banks and other financial institutions to publish league tables comparing all key charges for financial services.

 Mr Brown made clear that a reputation for financial competence would be at the centre of Labour's next election campaign. He said there would be no relaxation of the Government's grip on public spending, despite forecasts of a Budget surplus of up to £12 billion.

 He said: "We will always be vigilant about stability. Our Labour Government will never take risks with inflation. I will never spend money we have not earned." 

However, the increasing frustration among some activists at his fiscal stance surfaced during the debate. John Edmonds, general secretary of the GMB union, led demands for the Government to dip into its "war chest" and come up with extra cash for hard-pressed public services.

 Unions were not calling for "wild spending" but they did want to see extra cash for "underfunded and badly demoralised" public services. Mr Edmonds called on Mr Brown not to put tax cuts ahead of extra spending on schools, hospitals and other public services. He said: "If we have extra money in the next two years, it should certainly not go on tax cuts.

 Mr Edmonds declared to loud applause: "The priority must be to restore and expand our hard-pressed public services. For goodness sake, let us recognise that there is plenty to commend in our public services and public service investment is where our Labour Government must make its commitment in the next two years."