Business
Young people on benefits to be offered construction and hospitality work
Young people on benefits will be offered taxpayer-funded jobs in areas such as construction and hospitality, in a bid to tackle rising youth unemployment.
The government plans to fund 55,000 six-month placements from an £820m pot announced at the Budget, which will also fund training and work support.
Work and Pensions Secretary Pat McFadden said those who decline the job offer without a “good reason” would be stripped of their benefits.
The Conservatives said the scheme showed that Labour had “no plan for growth, no plan to create real jobs”.
The placements will begin to be rolled out in six parts of the UK with high youth unemployment from spring 2026, it has been confirmed, following the initial announcement of the scheme in September.
The six-month roles will be “fully subsidised” for 25 hours a week, paid at the legal minimum wage, and offered to 18- to-21-year-olds on universal credit who have been looking for work for 18 months.
Employers taking part in the scheme are yet to be announced, but ministers have said new opportunities will be created in sectors including construction, health and social care and hospitality.
In total, the government plans to create 350,000 training and work experience placements.
On BBC’s Sunday with Laura Kuenssberg McFadden was pressed for more detail on what might count as a good reason to decline a role.
He said this could include where a “family emergency” prevented them from making an appointment.
The number of 16-24-year-olds not in employment, education or training – known as Neets – has been trending upwards since 2021, with the latest figures showing nearly a million young people are now not earning or learning.
It said that the government-backed jobs will not necessarily be in the same sectors, but that they would be in the following regions:
- Birmingham and Solihull
- the East Midlands
- Greater Manchester
- Hertfordshire and Essex
- Central and eastern Scotland
- South-west and south-eastern Wales
The government says that 900,000 young people in total who are on Universal Credit and are looking for work will be given a “dedicated work support session”, followed by four additional weeks of “intensive support”.
An employment coach will then refer them to one of six pathways: work, work experience, apprenticeship, wider training, learning, or a workplace training programme with a guaranteed interview.
The government expects more than 1,000 young people to start a job in the first six months of the scheme.
Shadow work and pensions secretary Helen Whately criticised other measures announced in the Budget, saying: “The Chancellor’s tax hikes are driving up youth unemployment, snatching a career from a generation of young people.”
She added: “This scheme is nothing more than taking with one hand to give with the other.”
Further plans are expected to be set out in the coming week as the government prepares to publish its national youth strategy.
Reeves previously announced that the government would be funding a scheme to make apprenticeship training for under-25s at small and medium businesses “completely free”.
There were 946,000 young people who were Neet in the UK in the three months to September – equivalent to 12.7% of all people aged 16-24.
A quarter cite long-term sickness or disability as a barrier to work or education, while the number claiming health and disability benefits is also on the rise.
The government announced last month that it was launching an independent review into the rising number of young people not working or studying.
Interest rates are widely expected to remain at 3.75% as Bank of England policymakers prioritise curbing above-target inflation while also monitoring economic growth, according to expert analysis.
The Bank’s Monetary Policy Committee (MPC) is anticipated to leave borrowing costs unchanged when it announces its latest decision on Thursday, marking its first interest rate setting meeting of the year.
This follows a rate cut delivered before Christmas, which was the fourth such reduction.
At the time, Governor Andrew Bailey noted that the UK had “passed the recent peak in inflation and it has continued to fall”, enabling the MPC to ease borrowing costs. However, he cautioned that any further cuts would be a “closer call”.
Since that decision, official data has revealed that inflation unexpectedly rebounded in December, rising for the first time in five months.
The Consumer Prices Index (CPI) inflation rate reached 3.4% for the month, an increase from 3.2% in November, with factors such as tobacco duties and airfares contributing to the upward pressure on prices.
Economists suggest this inflation uptick is likely to reinforce the MPC’s inclination to keep rates steady this month.
Philip Shaw, an analyst for Investec, stated: “The principal reason to hold off from easing again is that at 3.4% in December, inflation remains well above the 2% target.”
He added: “But with the stance of policy less restrictive than previously, there are greater risks that further easing is unwarranted.”
Shaw also highlighted other data points the MPC would consider, including gross domestic product (GDP), which saw a return to growth of 0.3% in November – a potentially encouraging sign for policymakers.
Matt Swannell, chief economic advisor to the EY ITEM Club, affirmed: “Keeping bank rate unchanged at 3.75% at next week’s meeting looks a near-certainty.”
He noted that while some MPC members who favoured a cut in December still have concerns about persistent wage growth and inflation, recent data has not been compelling enough to prompt back-to-back reductions.
Edward Allenby, senior economic advisor at Oxford Economics, forecasts the next rate cut to occur in April.
He explained: “The MPC will continue to face a delicate balancing act between supporting growth and preventing inflation from becoming entrenched, with forthcoming data on pay settlements likely to play a decisive role in shaping the next policy move.”
The Bank’s policymakers have consistently voiced concerns regarding the pace of wage increases in the UK, which can fuel overall inflation.
India’s budget focuses on infrastructure and defence spending and tax breaks for data-centre investments.
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New Income Tax Act 2025 to come into effect from April 1, key reliefs announced in Budget 2026
New Delhi: Finance Minister Nirmala Sitharaman on Sunday said that the Income Tax Act 2025 will come into effect from April 1, 2026, and the I-T forms have been redesigned such that ordinary citizens can comply without difficulty for ease of living.
The new measures include exemption on insurance interest awards, nil deduction certificates for small taxpayers, and extension of the ITR filing deadline for non-audit cases to August 31.
Individuals with ITR 1 and ITR 2 will continue to file I-T returns till July 31.
“In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in record time, and the Income Tax Act 2025 will come into effect from April 1, 2026. The forms have been redesigned such that ordinary citizens can comply without difficulty, for) ease of living,” she said while presenting the Budget 2026-27
In a move that directly eases cash-flow pressure on individuals making overseas payments, the Union Budget announced lower tax collection at source across key categories.
“I propose to reduce the TCS rate on the sale of overseas tour programme packages from the current 5 per cent and 20 per cent to 2 per cent without any stipulation of amount. I propose to reduce the TCS rate for pursuing education and for medical purposes from 5 per cent to 2 per cent,” said Sitharaman.
She clarified withholding on services, adding that “supply of manpower services is proposed to be specifically brought within the ambit of payment contractors for the purpose of TDS to avoid ambiguity”.
“Thus, TDS on these services will be at the rate of either 1 per cent or 2 per cent only,” she mentioned during her Budget speech.
The Budget also proposes a tax holiday for foreign cloud companies using data centres in India till 2047.
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