NEARLY one in three people in a North-East town aged 16 to 24 is unemployed, figures have revealed.

The town is among the top 20 in the UK when it comes to the percentage of young people not in employment or education, with 29.3 per cent claiming Job Seekers’ Allowance.

This compares to one in five, or 19.5 per cent, nationally.

The news came as the Government announced plans to extend the time 18 to 21-year-olds can undergo work experience placements without losing benefits, and help to match them with relevant placements.

Under new rules, interns will be allowed to work unpaid for up to eight weeks while still claiming. Existing legislation allows work experience with no benefits loss for up to two weeks.

But Labour hit out at the coalition plans, saying work experience was no substitute for paid employment – and warned that if more was not done to help young people into work there was a danger of creating a “lost generation”.

Work and Pensions Minister Chris Grayling said: “Our new work experience scheme will give young people the chance to get valuable experience in a business for up to two months, which will make a real difference to their confidence, their employability and their prospects.

“This Government is making the changes that will give young people access to jobs and opportunities that can help them towards a brighter future.”

Jenny Chapman, the Labour MP for Darlington, criticised the move, describing it as “a token gesture”.

“Work experience is very valuable – I take people on work experience myself.

But it’s no substitute for a job,” she said.

“By cancelling the Future Jobs Fund, abolishing the Education Maintenance Allowance and putting up tuition fees, the Government is turning its back on a generation of young people.

“It is a serious problem for somewhere like Darlington, when we were just starting to see improvements in the qualifications our young people get.

“Mass unemployment in the borough was unthinkable two years ago, but here we are looking at that prospect again. That is not something anyone wants.

“People can remember what it was like in the Eighties and my fear is we will lose another generation of young people.”

Her sentiments were echoed by Mr Grayling’s shadow spokesman, Liam Byrne, who accused the minister of “having his head in the sand”.

“Labour’s Future Jobs Fund would have created up to 200,000 full-time paid jobs for young people up and down the country,” he said. “This Tory-led Government needs to explain to young people worried about their future why this was cut.

“We wait to see the full details of what is on offer, but the grim unemployment figures, that were especially bad for young people, require urgent action.”