London Daily

Focus on the big picture.
Monday, Jul 13, 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
UK Prime Minister Keir Starmer Offers Condolences Following Death of Qatar’s Father Amir
UK Regional Innovation Policy Focuses on Research Clusters Across Scotland, Wales, and Northern England
UK Corporate Transparency Rules Set to Become More Strict Under Modern Slavery Reform Plans
UK Civil Service Estate Strategy Shifts Government Activity Away From London
UK Strengthens National Security Powers Through New Threat Designations
Greater Manchester Police Conduct Drink and Drug Driving Operations After Football Events
UK Government Advances Darlington Economic Campus With Construction Milestone
UK Authorities Increase Football-Related Security Operations After Tournament Fixtures
UK Invests Fifty-One Million Pounds in National Cryogenics Facility and Regional Innovation Hubs
UK Moves Toward Tougher Modern Slavery Reporting Rules With Corporate Penalties
UK Government Reports Forty-Three Million Pounds in Savings From Office Estate Reform
UK Government Expands Civil Service Regional Strategy With Manchester and Darlington Campus Projects
UK Designates Iran’s Islamic Revolutionary Guard Corps as National Security Threat
United Kingdom Financial Markets Monitor Business Response to Economic Policy Changes
Scottish Renewable Energy Expansion Highlights Need for Faster Grid Development
Wales and Regions Strengthen Focus on Economic Development Through Tourism and Investment
Retail Industry Warns High Street Businesses Remain Under Pressure
Police Chiefs Highlight Growing Challenges Managing Protests and Public Order
Agriculture Leaders Seek Clarity on Post-Brexit Farming Support and Environmental Rules
Transport Unions Warn of Further Industrial Action Over Pay and Working Conditions
Welsh Tourism Sector Reports Strong Growth Driven by Domestic and International Visitors
National Infrastructure Review Gains Support as Leaders Seek Faster Project Delivery
Financial Markets Assess Impact of United Kingdom Corporate Tax Policy Changes
Northern Ireland Assembly Debates Cross-Border Trade and Infrastructure Cooperation Plans
Government Opens Consultations on Housing Reform and Planning System Changes
Scottish Government Faces Pressure to Accelerate Offshore Wind and Grid Expansion
National Energy System Operator Warns Grid Investment Is Needed for Future Electricity Demand Growth
United Kingdom Research Council Invests in Artificial Intelligence and Biotechnology Innovation Hubs
United Kingdom Expands Oversight of Skilled Worker Visa Sponsors Amid Migration Debate
Cross-Party MPs Call for National Infrastructure Strategy Review to Accelerate Economic Growth
Prime Minister Announces One Billion Pound NHS Funding Package Ahead of Winter Pressures
Bank of England Signals Cautious Approach to Interest Rates as Inflation Remains Above Forecasts
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Netflix Weighs Always-On Channels, Bundles and Short-Form Video
Passenger Is Pulled Partly Outside Ryanair Jet After Window Fails Mid-Flight
Innovation-led growth strategy
Public service reform pressure
Defence and industrial security
Labour leadership transition and economic reset
Northern England Pushes for Greater Influence in Britain’s Future Economic Model
UK Technology Strategy Focuses on Life Sciences, Digital Innovation and Research Investment
Britain and United States Maintain Focus on Pharmaceuticals Cooperation and Industrial Growth
UK Public Services Face Continued Pressure as Government Promises Visible Improvements
Regional Economic Power Becomes Key Theme in Britain’s Next Political Phase
Britain Expands Support for Small Businesses as Firms Seek Better Access to Finance
UK Economy Remains Central Political Challenge as Cost of Living and Growth Concerns Persist
National Health Service Introduces New Workplace Reviews to Improve Conditions for Healthcare Staff
UK Life Sciences Sector Secures More Than Three Billion Pounds in Investment to Support Innovation
Britain Strengthens Defence Strategy as Security Concerns Reshape Military and Industrial Policy
Andy Burnham Promises Stronger UK Defence Industry and Expanded Domestic Production
×