MILLIONS of Britons will lose their benefits if they refuse to take up work and training opportunities under Labour’s welfare shake-up.

Ministers will today unveil a £240m plan to tackle unemployment and rising levels of economic inactivity.

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While unemployment is at nearly 1.5 million, economic inactivity has also risen to more than nine million, with 2.8 million people out of work due to long-term illness – a major driver of the rise in unemployment since the pandemic.

During the election Labor promised to increase the employment rate to 80 per cent from the current level of around 75 per cent, which would mean around two million more people in work.

The Get Britain Working White Paper includes a shake-up of jobcentres, transforming them into a national jobs and careers service offering tailored support to help people find and keep jobs.

Mental health services will be boosted and extra NHS capacity will be deployed to tackle waiting lists in areas of high inactivity.

A £40m Growth and Skills Levy will also be introduced to make the Apprenticeship Levy more flexible, opening up better education and training opportunities for young people.

And a youth guarantee will offer access to education, training and employment opportunities for under-22s.

Welfare Secretary Liz Kendall made it clear at the weekend that those who refuse to take up the offer will have their handouts stripped.

But jobseekers who repeatedly fail to engage could already be sanctioned, and how exactly the carrot and stick will work will not be determined until the spring.

Mrs Kendall said: “To get Britain growing, we need to get Britain back to work.

“Our reforms will break down barriers to opportunity, help people get into and out of work, empower local leaders to boost jobs and growth and give our children and young people the best chance to get on in life.”

Shadow Work and Pensions Secretary Helen Whately accused ministers of “avoiding the hard decisions” on sick pay and that the announcement was “nothing more than rearranging the deckchairs on the Titanic”.

She said: “This latest announcement shows that Labor is not prepared to make the tough but necessary choices to reduce the benefits bill.

“There is no attempt to match the £12 billion in welfare savings we promised in our manifesto. They have even shirked the tough decisions about sick pay that are needed to make the welfare system sustainable in the long term.

“In order to get people out of benefits, you also have to have jobs that they can go to. But Labour’s disastrous anti-growth budget is already making businesses think twice about taking on people.”

Rachel Reeves’ Budget last month contained almost no measures on welfare and ministers are promising more details in today’s White Paper.

The chancellor said only that Labor would stick to the Tories’ plans to cut the welfare bill by £3 billion over five years.

Under the previous government, welfare eligibility would have been tightened so that around 400,000 more people who were signed off long-term would be assessed as having to prepare for work by 2028/29 to deliver the savings.

But in Labour’s back-to-work plan, ministers only promised to launch a consultation on “measures to overhaul health and disability benefit system” in the spring.

Sir Keir said the White Paper would “put an end to the culture of blaming and shaming people who for too long have not been given the support they need to get back into work.

“From the broken NHS, the poor economy and the millions of people who have become unemployed and trapped in a spiral of inactivity, this government inherited a country that is simply not working,” he said.

“But today we have laid out a plan to fix this. A plan that tackles the biggest drivers behind unemployment and inactivity and gives young people their future back through real, meaningful change instead of empty rhetoric and stapled plaster politics.”