London Daily

Focus on the big picture.
Friday, Feb 27, 2026

Jobs scheme 'won't stop major rise in unemployment'

Jobs scheme 'won't stop major rise in unemployment'

Rishi Sunak's new jobs support scheme will slow but not stop, "major" job losses, influential think tank the Resolution Foundation has warned.

The chancellor said he hoped the new plan, announced on Thursday, would "benefit large numbers".

But the Resolution Foundation said the fact firms had to pay employees for hours not worked meant many would have "little or no incentive" to use it.

The plan "will not significantly reduce the rise in unemployment," it said.

The Foundation also highlighted that around six million of the UK's poorest households could see their incomes cut by £20 a week from next April, when the government's temporary boost to basic benefits comes to an end.

The Job Support Scheme, which will replace the furlough scheme, will see workers get three quarters of their normal salaries for six months.

To be eligible, employees must work for at least one third of their normal hours.

For the hours not worked, the government and employer will each pay one-third of the remaining wages.

Torsten Bell, chief executive of the Resolution Foundation, said the higher contribution required from firms, compared to the furlough scheme, meant the new Job Support Scheme "will not live up to its promise to significantly reduce the rise in unemployment."



At the start of the pandemic the government sought to reduce the economic impact of lockdown measures by temporarily boosting the standard allowance you collect if you claim benefits by £20 to £94.25 a week.

That served to soften the income shock endured by workers moving from a job to benefits, which pay less than a fifth of the average wage.

The Resolution Foundation's analysis points out that the Chancellor Rishi Sunak has chosen not to extend that temporary boost beyond April next year.

That means that in April, at a time when unemployment is likely to be rising quickly, well over six million families already on benefits will see their incomes cut by £20 a week.

And because they'd be forced to spend less, it would also reduce the overall level of demand in the economy, making more job losses more likely.

The Foundation's report notes, for example, that it would cost a firm £1,500 to employ one full-time worker on £17,000, but more than £2,000 a month to employ two half-time workers on the same full-time equivalent salary.

One full-time worker on £10,000 would cost £800 a month, compared with £1,100 a month for two half-time workers.

The government has stressed the scheme has been gratefully received in many quarters.

The chief secretary to the Treasury, Steve Barclay, told BBC Breakfast that "many employers value the flexibility of being able to tailor how much time employees are working as we go through uncertainty of winter months".

Mr Barclay said the scheme has been "so warmly welcomed" by the likes of the CBI, FSB, business leaders and trade unions, as well as sectors such as aerospace and hospitality,

He said that businesses want to retain their skills and expertise of the labour market, and "wanted the ability to bring people back on a part time basis".

Missing out


The Foundation said that a single adult homeowner earning £20,000-a-year would face an income reduction of around 19% if they worked a third of their previous hours on the jobs support scheme, compared with a 70% drop were they to lose their job completely and move onto Universal Credit.

However, employees only benefit from the Job Support Scheme (JSS) where employers choose to use it, and the scheme is far less generous for firms which gives them little or no incentive to use it, the Foundation said.

Meanwhile, industries hit hard by the coronavirus pandemic are facing further uncertainty after missing out on help in the chancellor's new emergency jobs scheme.

Hospitality, events and retail workers and businesses have expressed concern, as have those on zero-hours contracts.

Rishi Sunak said employees must be in "viable" jobs to benefit from the wage top-up scheme.

This means people working in industries currently closed - such as nightclubs - may lose out as there isn't any work.

Mr Sunak said he hoped the new plan, announced on Thursday, would "benefit large numbers", but warned the government "can't save every job".

Opposition politicians have called for more emphasis on training for workers losing their jobs.

Shadow chancellor Anneliese Dodds told the BBC a national training strategy was needed "so that when people become unemployed, they can hopefully be retrained with new skills".

The Lib Dems' Christine Jardine also criticised the lack of focus on training. She told the BBC that while the jobs plan was described as a "bridge for the economy", she wanted to know "where will it take us?"

How will the Job Support Scheme work?


* The government will subsidise the pay of employees who are working fewer than normal hours due to lower demand
* It will apply to staff who can work at least a third of their usual hours
* Employers will pay staff for the hours they work
* For the hours employees can't work, the government and the employer will each cover one third of the lost pay
* The grant will be capped at £697.92 per month
* All small and medium-sized businesses will be eligible
* Larger business will be eligible if their turnover has fallen during the crisis
* It will be open to employers across the UK even if they have not used the furlough scheme
* It will run for six months starting in November

Newsletter

Related Articles

0:00
0:00
Close
Dyson Reaches Settlement in Landmark UK Forced Labour Case
Barclays and Jefferies Shares Fall After UK Mortgage Lender Collapse Rekindles Credit Market Concerns
Play Exploring Donald Trump’s Rise to Power by ‘Lehman Trilogy’ Author to Premiere in the UK
Man Arrested After Churchill Statue Defaced in Central London
Keir Starmer Faces Political Setback as Labour Finishes Third in High-Profile By-Election
UK Assisted Dying Bill Set to Fall Short in Parliament as Regional Initiatives Gain Ground
UK Defence Ministry Clarifies Position After Reports of Imminent Helicopter Contract
Independent Left-Wing Plumber Secures Shock Victory as Greens Surge in UK By-Election
Reform UK Refers Alleged ‘Family Voting’ Incidents in By-Election to Police
United Kingdom Temporarily Withdraws Embassy Staff from Iran Amid Heightened Regional Tensions
UK Government Reaches Framework Agreement on Release of Mandelson Vetting Files
UK Police Contracts With Israeli Surveillance Firms Spark Debate Over Ethics and Oversight
United Airlines Passenger Hears Cockpit Conversations After Accessing In-Flight Audio Channel
Spain to Conduct Border Checks on Gibraltar Arrivals Under New Post-Brexit Framework
Engie Shares Jump After $14 Billion Agreement to Acquire UK Power Grid Assets
BNP Paribas Overtakes Goldman Sachs in UK Investment Banking League Tables
Geothermal Project to Power Ten Thousand Homes Marks UK Renewable Energy Milestone
UK Visa Grants Drop Nineteen Percent in 2025 as Migration Controls Tighten
Barclays and Jefferies Among Banks Exposed to Collapse of UK Mortgage Lender MFS
UK Asylum Applications Edge Down in 2025 Despite Rise in Small Boat Crossings
Jefferies Reports Significant Exposure After Collapse of UK Lender MFS
FTSE 100 Reaches Fresh Record Highs as Major Share Buybacks and Earnings Lift London Stocks
So, what's happened is, I think, government policy, not just under Labour, but under the Conservatives as well, has driven a lot of small landlords out of business.
Larry Summers, the former U.S. Treasury Secretary, is resigning from Harvard University as fallout continues over his ties to Jeffrey Epstein.
U.S. stocks ended higher on Wednesday, with the Dow gaining about six-tenths of a percent, the S&P 500 adding eight-tenths of a percent, and the tech-heavy Nasdaq climbing roughly one-and-a-quarter percent.
From fears of AI-fuelled unemployment to Big Tech's record investment, this is AI Weekly.
Apple just dropped iOS 26.4.
US Lawmakers Seek Briefing from UK Over Reported Encryption Order Directed at Apple
UK Business Secretary Calls on EU to Remove Trade Barriers Hindering Growth
Legal Pathways for Removing Prince Andrew from Britain’s Line of Succession Examined
PM Netanyahu welcome India PM Narendra Modi to Israel
Shadow Diplomacy: How Harry and Meghan’s Jordan Trip Undermines the Monarchy
Sir Jim Ratcliffe, co-owner of Manchester United, comments on immigration in the UK.
Bill Gates, the UN and the WEF are attempting to construct "a giant digital gulag for all of humanity" via digital ID, CBDCs and vaccine passport infrastructure.
Britain’s Channel Crisis: Paying Billions While the Boats Keep Coming
Downing Street’s Veteran Deception Scandal
UK HealthCare Expands ‘Food as Health’ Initiative Statewide to Tackle Chronic Illness in Kentucky
Leonardo Chief Says UK Set to Decide on New Medium Helicopter Programme
UK Slows Chagos Islands Agreement After Concerns Raised in Washington
European and UK Stock Markets Reach Fresh Highs as Banks and Miners Lead Rally
UK Government Insists Chagos Islands Negotiations Continue After Minister’s ‘Pause’ Remark
No Confirmed Deal for Engie to Acquire UK Power Networks Amid Market Speculation
UK Reaffirms Updated Entry Requirements for Travellers as of February 25, 2026
General Atlantic to sell equity stake in ByteDance, valuing the company at $550 billion
German Chancellor Friedrich Merz Secures Pledge from China for Greater Imports of Quality Goods
Lord Mandelson Condemns Arrest as Driven by ‘Baseless Suggestion’ He Would Flee Abroad
Former UK Ambassador Released on Bail Following Arrest in Epstein-Linked Investigation
UK Parliament Orders Release of Former Prince Andrew’s Government Vetting Files
Reddit Fined £14 Million by UK Regulator Over Failures in Age Verification Controls
UK Moves to Tighten Regulation of Netflix, Disney+ and Prime Video Under New Media Rules
×