Young people will lose their benefits if they refuse a job or a training place and patients, parents, residents and consumers will get new “entitlements” as Gordon Brown stakes his future on keeping alive Labour’s reforming credentials.

Local people will be given more priority on housing waiting lists in a move to counter the advance of the British National Party, while moves will be started in the autumn to phase out the remaining 92 hereditary peers.

The reforming theme of Mr Brown’s election blueprint Building Britain’s Future, to be continued by Ed Balls in a schools White Paper today, reflects the growing dominance in Labour affairs of Lord Mandelson, effectively Mr Brown’s deputy. That was dramatically highlighted early in the day when Lord Mandelson pre-empted Alistair Darling, the Chancellor, to state that the next three-year spending review will not happen until after the general election. The Treasury and Downing Street insisted that no decision had been taken, and there remains a possibility that a highly slimmed-down exercise could happen next spring, but there was no sign that the Business Secretary was in trouble with his colleagues. David Cameron said that Lord Mandelson’s disclosure showed it was a “relaunch without a price tag”.

The spending decision and yesterday’s document confirm that the Business Secretary, in consultation with Mr Brown and Mr Balls, has opted for a twin-track approach to countering the Tories. In delaying a Whitehall spending round Labour can refuse to admit to real-terms cuts to public services after 2011. By switching cash between departments, finding “efficiency savings” and selling off assets, it hopes to fend off the most obvious cuts, in hope of a strong economic recovery early next year.

Labour’s proposals could face an early electoral test as speculation spread through Westminster last night that Mr Brown plans to gamble by holding the Norwich North by-election, caused by the resignation of the Labour MP Ian Gibson during the expenses disclosures, late next month.

Mr Brown also told MPs yesterday that, from January, everyone under 25 who has been unemployed for a year would get a guaranteed job, work experience or a training place, and by “next spring” 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 down a job a second time and 26 weeks for a third failure.

Children at state secondary schools would be guaranteed a personal tutor and would get one-to-one catch-up tuition where needed.

He also confirmed plans to guarantee that nobody needing to see an NHS cancer specialist would have to wait more than two weeks and ensure that no one would wait more than 18 weeks for hospital treatment.

Mr Brown 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 hardening of targets into entitlements represents an audacious attempt by Labour to outflank the Conservatives as the party best able to deliver radical improvements to public sectors. “David Cameron offers the soft option on public sector reform. This may be because they are fishing for votes, or simply because they care less about the public services. Either way, their approach will mean less spending, less reform, less consumer pressure on these services, and weaker delivery for the individual,” Lord Mandelson said yesterday.

Labour also announced a new statutory system of age ratings for video games, an extension of the points-based immigration system, and legislation to begin removing the remaining hereditary peers from the House of Lords. Mr Brown said that the Government would also publish a draft Bill to complete the reform of the Lords.

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