Rising levels of worklessness are “unacceptable” and require “immediate action”, the new Labour government’s jobs minister has said.

Liz Kendall is proposing several measures including a new national jobs and careers service to tackle record youth unemployment and rising numbers of those out of work due to long-term sickness.

On her first ministerial tour as Secretary of State for Work and Pensions, Ms Kendall will also announce a more localised approach to upskill those out of work and tackle the root causes of unemployment.

But the Conservative party said the government must “wake up” to the “huge cost” the reforms will cost the taxpayer.

“Unless action is taken, the working-age welfare bill will rise by more than £20bn a year by the end of the decade,” a Conservative party spokesperson said.

Ms Kendall’s proposals include merging the National Careers Service and the Jobcentre Plus, in an effort to get more people into work and support people to find better paid jobs.

Currently, the National Careers Service, which focuses on careers advice, is run by the Department of Education, while Jobcentre Plus, focused on welfare applications, is run by the Department for Work and Pensions.

Labour is also promising:

• New work, health and skills plans for “economically inactive” people who are not looking for work or available to work. These would be led by local mayors and councils.
• A “youth guarantee” for everyone aged 18-21 which will see more opportunities for training, an apprenticeship or help to find work offered to all in this age category.

It said the guarantee would help “to prevent young people becoming excluded from the world of work at a young age”.

According to the Office for National Statistics, about a quarter of people of working-age – nearly 11 million people – do not currently have jobs.

About 1.5 million are classed as unemployed, meaning they are unable to find a job.

The rest are considered to be economically inactive, with the number in this category rising as more people take early retirement, face sickness, or cannot afford childcare.

“Economic inactivity is holding Britain back,” Ms Kendall said. “It’s not good enough that the UK is the only G7 country with employment not back to pre-pandemic levels”.

The Recruitment and Employment Federation, which represents the recruitment sector, said the new government’s “early start” on reducing joblessness was “vital”.

“The rewards are tantalising for the government if it can harness the personal choices individuals make in needing and wanting flexible work opportunities,” said the REC’s deputy chief executive, Kate Shoesmith.

Disability equality charity Scope praised the government’s “positive vision” but said it should reassure disabled people who are unable to work “that they won’t be forced into unsuitable jobs, or have vital financial support taken away”.

In May, Labour criticised former prime minister Rishi Sunak after he said that claiming benefits had become a “lifestyle choice” and that he would tackle a culture of “sick notes”.

On Thursday, the Conservatives said Labour had “refused” to match its measures to save billions of pounds from the welfare bill by the end of the next parliament.