Rishi Sunak will announce a £2 billion emergency package of support to help prevent youth unemployment in the wake of the coronavirus crisis.
The Chancellor will use his mini-budget to set out a scheme of subsidised work placements as part of a “plan for jobs”.
He is also expected to announce a stamp duty holiday to temporarily exempt the tax on the first £500,000 of homes purchased in England and Northern Ireland in an effort to revive the housing market.
The Chancellor was briefing ministers on his plans at a Cabinet meeting on Wednesday before announcing the measures in the Commons later.
While Mr Sunak is expected to largely rely on borrowing to fund his package, the Government will eventually need to act to control the public finances.
Institute of Fiscal Studies director Paul Johnson said some of the extra spending may turn out to be permanent, rather than short-lived emergency measures.
“He is going to be worrying about the cost of all this, but he is not going to be worrying about it this year and possibly not next year,” he told BBC’s Today programme.
“But in two or three years’ time – partly because the economy will be smaller than we expected and tax revenues will be lower, and partly because I think significant chunks of this extra spending will be permanent – at some point he is going to have to come back and pay for this.”
Labour will push Mr Sunak to “avoid additional floods of redundancy notices” by developing a “flexible” furlough scheme in areas where local lockdowns are put in place.
The Treasury acknowledged that young people are more likely to be furloughed under the job retention scheme which is being wound up and is due to end in October.
The “kickstart scheme” will create hundreds of thousands of state-funded jobs for 16 to 24-year-olds who are claiming Universal Credit and at risk of long-term employment.
Government funding would cover 100% of the minimum wage for 25 hours a week in the scheme that will be open to all employers across Great Britain, with bosses able to top up wages.
Ahead of the announcement, Mr Sunak said: “Young people bear the brunt of most economic crises, but they are at particular risk this time because they work in the sectors disproportionately hit by the pandemic.
“We also know that youth unemployment has a long-term impact on jobs and wages and we don’t want to see that happen to this generation.”
Labour’s shadow chancellor Anneliese Dodds said the Government is “yet to rise to the scale of the unemployment crisis” and said the priority should be to abandon its “one-size-fits-all” approach to ending the job retention and self-employment schemes.
“In addition, older people who become unemployed, and those living in particularly hard-hit areas, will also need tailored support,” she added.
Lib Dem leadership candidate Layla Moran said the package “will sadly be too little, too late for many of the corona class of 2020”.
However, the general secretary of the Trades Union Congress, Frances O’Grady, welcomed the measure as a “good first step” to prevent mass youth unemployment.
“But we’ll be checking the small print to ensure every job provides proper training and a bridge to steady employment,” she added.
And Confederation of British Industry director-general Dame Carolyn Fairbairn said the plan “will be a much-needed down payment in young people’s futures”.
“By investing in skills, the Government can lessen the potential scarring impact of the pandemic for the next generation,” she added.
Among the job measures already announced are a £111 million scheme for firms in England to get a £1,000 bonus if they offer unpaid traineeships.
Thousands of jobs have been cut as businesses struggled through lockdown, with Royal Mail, Centrica, easyJet and British Airways among those affected.
Meanwhile, on the eve of the speech, the Unite union said 2,200 DHL workers involved in the production of Jaguar Land Rover’s vehicles are being told that they could lose their jobs.
The 2,200 proposed redundancies comprise just under 40% of the entire DHL workforce on the contract, it added.
In his speech, Mr Sunak will also detail a £3 billion green package with grants for homeowners and public buildings to improve energy efficiency.
It will include £2 billion for households to insulate their homes and make them more energy-efficient, but campaigners said the funding pales in comparison to the economic and environmental crises.
Mr Sunak has also been urged to consider an emergency VAT cut to stimulate consumer spending and stem the 14% slump in GDP forecast by the Bank of England this year.
The UK’s unemployment rate could also soar to 14.8%, with job losses comparable to the 1930s, according to the Organisation for Economic Co-operation and Development (OECD).