Young people who refuse to take a job, work experience or training place are to lose their benefits under plans announced by Gordon Brown today.

Setting out the final legislative programme before the election, Mr Brown told MPs that from January everyone under 25 years old who has been unemployed for a year would get a guaranteed job, work experience or training place under a £1 billion plan announced in the Budget.

The idea is to provide 150,000 jobs, a third of which will be in areas of high unemployment.

The fresh element announced by Mr Brown was that by "next spring" the youngsters would have the "obligation to accept that guaranteed offer" or face having their benefits cut.

Those who refuse a suitable job offer could lose two weeks benefit, four weeks if they turn a job down a second time and 26 weeks for a third failure.

Mr Brown's Building Britain's Future blueprint included new “entitlements” for users of public services, a boost to house-building, extra training opportunities for young people, and the removal of the final hereditary peers from the House of Lords.

In a statement to the House of Commons, Mr Brown unveiled the draft legislative programme which will form the bulk of this autumn’s Queen’s Speech.

The Prime Minister said: “There is a real choice for our country – driving growth forward or letting the recession take its course; creating jobs for the future or doing nothing.

“We will not walk away from the British people in difficult times. Our policy is to build the growth, the jobs and the public services we need for Britain’s future.”

The most expensive item was a big rise in public housing – 110,000 over two years – costing £1.5 billion. Half of that will come from a reallocation of resources within the Communities Department and the rest from other departments, including the Home Office and transport department.

Officials said most of the £775m from other departments would come from "underspends" caused by a better than expected performance by the private finance initiative.

David Cameron, the Tory leader, responded: “The Prime Minister is living in a dream world, in which investment is going up, spending is going up – when is someone going to tell him he has run out of money?

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