Election 2010: Labour puts time limit on dole

CLAIMANTS on long-term benefits are to be told to take a job or face having their state hand outs taken away under radical plans to be unveiled in Labour's election manifesto tomorrow.

• Walkabout: Sarah and Gordon Brown talk to eight-year-old Amy Leith as they mingle with members of the public on the campaign trail in Kirkcaldy yesterday. Photograph: Getty Images

Gordon Brown will announce the maximum time an individual in good health should be allowed to claim Jobseekers' Allowance is two years.

The government will then give them a state-funded job or a work placement. But if they refuse, their benefits will be taken away.

The policy would affect more than 145,000 Scots currently on Jobseekers' Allowance, the main unemployment benefit. It now looks set to be one of the party's key pre-election pledges ahead of the 6 May poll, as Labour attempts to reel in the Conservative lead.

Brown is expected to argue tomorrow that Tory plans last week – for a cut in National Insurance, and on marriage tax relief – "scored publicity at the cost of credibility". He will seek to contrast the Tories' plans with his own policies, such as the new jobs' scheme which, Labour will argue, are fully costed.

One senior Labour minister said: "We've seen a lot of something-for-nothing policies from the Conservatives last week. The manifesto will provide a something-for-something approach."

But the Conservatives believe they have had the best of the first week's exchanges of the election campaign proper. In a message to party supporters last night, shadow chancellor George Osborne declared: "We've been the ones showing energy and ideas, while Labour have spent the whole week on the back foot."

The manifesto launch now looks to be one of Labour's best chances to haul in the Tory lead, which in some polls yesterday had returned to ten points. If replicated on 6 May, such a lead would hand David Cameron a clear overall majority.

It comes as the parties commence the pivotal week of the campaign, with the first TV leaders' debate on Thursday, with millions of swing-voters expected to be watching.

Labour's shake-up on welfare will have key relevance to Scotland, which has a disproportionate number of former workers on Jobseekers' Allowance. Many thousands of claimants on sickness benefit are also now being put on to Jobseekers Allowance after checks on their health were tightened.

Sources indicate that the new scheme is likely to be similar to the government's young person's job guarantee scheme, set up last year, which offers the guarantee of a state-funded job or a work-placement to any 18-25-year-olds who have been unemployed for six months.

The jobs are funded by taxpayers and mostly created by local councils, which bid for government cash. But ministers claim the scheme is self-financing as they no longer have to pay out benefits.

Jobs created in the young person's scheme have included work in recycling projects, renovation programmes, child care and forestry work. The hope is that, once the funding has run out, the former benefit claimant has the necessary skills to get back into the workplace full-time.

The source added: "This will herald the next stage of Labour's radical welfare reform agenda. It's about welfare reform, but also about the economy."

However, shadow Scottish Secretary David Mundell said: "The key limitation of Labour's proposals is that they are restricted to creating jobs that are temporary and mainly in the public sector. The key to recovery is to create permanent jobs in the private sector."