The government has said young people must take up offers of a job or training, or lose their benefits, but it has not spelled out how such sanctions will work or when they will come into force.

It has pledged to increase the employment rate to 80% from its current level of around 75%, which would mean around two million more people in work.

Sir Keir said: “From the broken NHS, flatlining economy, and the millions of people left unemployed and trapped in an inactivity spiral – this government inherited a country that simply isn’t working.”

The prime minister said the reforms would “put an end to the culture of blaming and shaming people who for too long haven’t been getting the support they need to get back to work”.

On Tuesday, Work and Pensions Secretary Liz Kendall will announce funds to provide extra capacity to cut waiting lists at the 20 NHS trusts with the highest levels of economic inactivity, in a bid to get more people currently off sick back to work.

She will also announce plans to expand mental health support and efforts to tackle obesity.

In other measures to be unveiled:

Getting more people into work and equipping younger people with skills, is seen as essential to the government’s goal of boosting productivity and delivering growth.

But it also does not want to be seen as a “soft touch” by some on welfare payments. Getting more people into work and equipping younger people with skills, is seen as essential in boosting productivity and delivering growth.

Helen Whately, shadow secretary of state for work and pensions, said the government has “dodged the difficult decisions on sickness benefits, which are needed to make the welfare system sustainable in the long term”.