Tories vow to use Deutsche Bank fine to help fund apprenticeships

David Cameron will on Tuesday pledge to use the £200m paid out in fines by Deutsche Bank over allegations it manipulated Libor to fund apprenticeships for unemployed young people.

The prime minister will announce plans for a three-year programme to create 50,000 apprenticeships as he tries to align his party with those "who want to work hard and get on in life" while attempting to put some distance between the Conservatives and the City.

"We're going to take fines from the banks who tried to rig markets and we are going to use it to train young people and get them off the dole," the prime minister will say.

"This is about taking money off those who represent Labour's failed past; and giving to those who through their hard work and endeavour can represent a brighter Conservative future."

Last week Germany's biggest bank paid a record $2.5bn to the authorities in the US and the UK to settle allegations it manipulated Libor, a key interbank borrowing rate that underpins as much as $350tn of debt worldwide, from student loans to complex financial instruments. The UK Financial Conduct Authority's share of the fines was £227m.

The Conservative party is using the final full week of campaigning before the general election on May 7 to reiterate its economic successes in the hope of galvanising a last-minute swing after weeks of deadlocked polls.

On Monday, Mr Cameron pledged to help 600,000 companies a year set up by 2020 as part of the Conservatives small business manifesto. The party has already pledged to create another 3m apprenticeships in the next parliament.

Earlier this year, the Conservatives announced that 18-21 year olds who have spent six months out of education, work or training will be compelled to carry out community service in exchange for state assistance.

The new batch of apprenticeships to be announced on Tuesday will be targeted at 22-24 year olds who have been out of work for more than 6 months.

Labour has pledged to require a company winning a major government contract and any large employer hiring skilled workers from outside the EU to offer apprenticeships focused on new entrants and lasting for at least two years. The Liberal Democrats have promised to give 200,000 grants to employers for apprenticeships and expand the number of degree-equivalent higher apprenticeships.

While the number of young people out of work fell last year, the UK still suffers from high levels of youth unemployment and a shortage of skills in sectors such as engineering and construction.

The coalition has overseen a rise in the number of apprenticeships - with more than 2.2m created during the last parliament - and commissioned the Richard Review to consider how to make apprenticeships more rigorous and responsive to business needs.

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