A £2bn Kickstart scheme will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment.

As part of the Summer Statement, chancellor Rishi Sunak said over 700,000 people are leaving education this year and many more are just starting out in their careers.

But the coronavirus has hit them hard with under 25s being two and a half times as likely to work in a sector that has been closed.

He said: “We cannot lose this generation, so today, I am announcing the Kickstart Scheme:

“A new programme to give hundreds of thousands of young people, in every region and nation of Britain, the best possible chance of getting on and getting a job.

“The Kickstart Scheme will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment.”

He said the jobs must be new, additional jobs, with a minimum of 25 hours per week with staff paid at least the National Minimum Wage.

Sunak added: “If employers meet these conditions, we will pay young people’s wages for six months, plus an amount to cover overheads. That means, for a 24-year-old, the grant will be around £6,500.”

Employers can apply next month, and the Kickstart workers are expected to be in their new jobs this autumn.