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Monday, Sep 01, 2025

Is the chancellor cooking up a new jobs scheme?

Is the chancellor cooking up a new jobs scheme?

Rishi Sunak has dropped his heaviest hint yet that there may be a new measure or scheme to boost job creation.


"A tricky balancing act" is how the chancellor himself described to me the next stage of support for an economy that will continue to be affected by the pandemic.

He dropped his heaviest hint yet that this will include a new measure or scheme to boost job creation, as the jobless numbers start their inevitable turn upwards.

That task, he says, is his "number one priority" and "I'm always looking for interesting creative, innovative and effective new ways to support jobs and employment," he told me on a visit to a pottery factory in Stoke.

What it is not is the extension to the current furlough scheme. The purpose of the visit to the Emma Bridgewater factory was to celebrate the return to work from furlough of its staff.

The Treasury calculates that half of those furloughed are now back in their jobs, and the chancellor is adamant that people are "itching to get back to work".

'Right thing to do'


Therefore he does not back the views of his predecessor Gordon Brown, for example, for the scheme to be extended, even as I pointed out, given his plan to wind it down did not factor in this week's new social restrictions.

"I wouldn't be being honest with people if I pretended that it was always going to be possible for people to return to the job that they had. Now in terms of helping those people, I don't think the right thing to do is to endlessly extend furlough," he said.



So that is pretty clear. The furlough scheme was designed with a specific problem in mind - to keep people connected to jobs that would return after the pandemic peak passed.

Any future package would be concentrated on a different target - to help create new and replacement jobs, or to allow for short time work.

Not 'oven ready'


And the truth is, even today's jobless numbers have not yet revealed precisely where the pressure points will be. Some in government hold out hope that the flexible UK labour market will mean that joblessness will in fact not rise quite as much as feared.

A package launched today, would, for example, have focussed on the specific problem of youth unemployment. It is, though, a more permanent scheme of "short time working", with a lower level of subsidy to accompany a partial return of hundreds of thousands of workers, that is attracting interest in business, union and cross party circles.

I have written before about Germany's Kurzarbeit system which was built up after the financial crisis and deployed for this current crisis.

Number 11 is still sceptical about sectoral targeting. How do you deal with supply chains, for example, a media buyer who works in the aviation industry? Will cash be wasted on businesses that do not need support?

But the very facts that the chancellor pointed out to me in Stoke, that people are quite quickly coming off furlough, show that is less of a worry than might be thought. The ongoing generosity of such a scheme would have to be assessed in the light of the spending review, and high levels of government debt.

Something is cooking at the Treasury as it looks beyond furlough scheme.

Though it is not yet what might be referred to as "oven ready".

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