Failure to find work or education for young people in Birmingham could cost taxpayers a massive £625 million over the next ten years, Labour claimed.

Birmingham MP Liam Byrne, Labour’s Shadow Work and Pensions Secretary, demanded action to create jobs in a major speech at Joseph Chamberlain College in Highgate.

In a speech marking the 70th anniversary of the Beveridge Report, which led to the creation of the welfare state, Mr Byrne (Lab Hodge Hill) highlighted young people in Birmingham who are not in education, employment or training.

The city has 16,245 young people aged 18 to 24 claiming Jobseeker’s Allowance - more than one in ten of all people in that age group.

When youngsters aged 16 and 17 are included, the total cost to the Treasury is £62 million a year, according to independent research by the House of Commons library.

Mr Byrne said: “Young people who are unemployed are far more prone to unemployment in the future. To ill health. To low pay.

“In other words, unemployment is not a one-off misfortune. It can scar you for life. The cost of today’s youth unemployment will cost us £28 billion over the next decade.”

He added: “You know the cost of youth unemployment for us in Birmingham over the decade to come is £625 million. That is the equivalent to 15 Joseph Chamberlain colleges.”

Labour says it could create 100,000 jobs for young people paid for by £2 billion raised by taxing bank bonuses.

The Government has introduced a range of measures it says will help get young people into employment or training, including increasing the number of apprenticeships available, and offering young people work experience.

Community and private organisations are receiving funding of £150 million to work with young people and provide one-on-one support to help them get into work or education, according to the Government.

Official figures show 73,000 people aged 18 to 24 are unemployed in the West Midlands, giving an unemployment rate for that age group of 21.1 per cent.