London Daily

Focus on the big picture.
Tuesday, Mar 10, 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
Roman Abramovich Signals Legal Fight if UK Seeks to Seize Chelsea Sale Funds
UK Ready to Back Emergency Oil Reserve Release as Middle East Conflict Pushes Prices Higher
Study of 40,000 Articles Sparks Debate Over Alleged Anti-Muslim Bias in UK Media
US and UK Army Chiefs Strengthen Cooperation on the Future of Armored Warfare
Britain’s Search for the Next ARM Intensifies as Startups and Investors Target the Semiconductor Frontier
Three US Strategic Bombers Arrive at RAF Fairford as Iran Conflict Intensifies
Cancer Death Rates in the UK Fall to the Lowest Level on Record
UK Government Bond Yields Retreat Slightly After Sharp Spike Triggered by Middle East Conflict
UK Chancellor Warns Middle East War Could Push Inflation Higher
UK Prime Minister Warns Iran Conflict Could Drive Up Prices and Threaten Economic Stability
Trump Declines UK Offer to Deploy Aircraft Carriers to Middle East Amid Iran Conflict
Prince Harry and Meghan Markle to Return to Australia After Seven Years for Philanthropic and Business Engagements
UK Government Signals Independence From Washington as Cooper Says Britain Does Not Agree With Trump on Every Issue
UK Experts Warn AI Chatbots Are Fueling Surge in Claims of Organised ‘Satanic’ Ritual Abuse
UK Political Parties Divided Over Strategy as Iran Conflict Reshapes Foreign Policy Debate
Britain Discloses Secret Military Repair Hubs Operating Inside Ukraine
Trump Says US No Longer Needs UK Carrier Support After Delayed Offer Amid Iran Conflict
Why Britain Has Become Involved in the US-Israel Military Campaign Against Iran
UK Gas Storage Falls to Under Two Days as Iran Conflict Jolts Global Energy Markets
UK Warned to Brace for Economic Shock as Iran War Drives Global Energy Price Surge
Starmer and Trump Hold First Call After Public Dispute Over Iran Conflict
UK Dentists Returned £1.3 Billion to Government as Shift Toward Private Care Accelerates
Expert Warns UK Must Build Emergency Food Stockpiles to Prepare for Climate Shocks or War
UK Plans Charter Flight to Evacuate British Nationals from Gulf as Regional Conflict Disrupts Air Travel
Families of Zimbabwe’s Liberation Fighters Call on Britain to Help Locate Skulls Taken During Colonial War
Iran’s Ambassador Warns Britain to ‘Be Very Careful’ Over Deeper Role in Expanding Middle East War
UK Military Leadership Defends Britain’s Defensive Role in Expanding Middle East Conflict
Four U.S. Strategic Bombers Arrive in Britain as Iran War Intensifies
Soham Murderer Ian Huntley Dies After Violent Attack in High-Security Prison
UK Lawmakers and Experts Condemn Scale of Overseas Human Remains Held in British Museums
Royal Navy Aircraft Carrier HMS Prince of Wales Placed on Standby for Potential Deployment
United Kingdom Confirms U.S. Military Using British Bases for Operations Targeting Iranian Missile Sites
Starmer Defends UK Role in Iran Conflict After Renewed Criticism from President Trump
Blue Owl Reveals £36 Million Exposure After Collapse of UK Lender Serving Wealthy Clients
UK Asylum Reform Plan Triggers Fierce Debate Over Border Control and Humanitarian Impact
US Stealth Bombers Head to UK Base as Trump Issues Stark Warning to Iran
UK Deputy Prime Minister Says Legal Case Could Exist for British Strikes on Iranian Missile Sites
Investigators Link Mysterious Parcel Fires Across Europe to Russian Intelligence Operation
Debate Intensifies Over Britain’s Legal Justification for US Military Operations Launched From UK Bases
Britain Faces Heightened Energy Price Risks as Iran-Linked Tensions Threaten Global Oil and Gas Supplies
British Counter-Terror Police Arrest Four Suspected of Spying on Jewish Community for Iran
Axel Springer Agrees $770 Million Deal to Acquire Britain’s Daily Telegraph
Iceland Supermarket Drops Trademark Challenge Against Icelandic Government in Long-Running Naming Dispute
UK Defence Secretary Visits Cyprus Following Scrutiny of Britain’s Response to Drone Attacks
Questions Grow Over Britain’s Military Readiness as Response to Iran Conflict Draws Scrutiny
UK Offers Failed Asylum Seeker Families Up to Forty Thousand Pounds to Leave Voluntarily
Saharan Dust Could Bring ‘Blood Rain’ to Parts of the UK as Weather Systems Shift
UK Deploys Additional Typhoon Fighter Jets to Qatar and Helicopters to Cyprus Amid Rising Middle East Tensions
Experts Urge Britain to Accelerate Renewable Energy Push as Global Conflicts Drive Up Costs
British Public Shows Strong Reluctance to Join Wider War in Iran
×