Tesco signs on to New Deal

Tesco, the UK's biggest selling supermarket chain, will today lay out plans to create 1,500 new jobs for the long-term unemployed under the Government's welfare to work programme. But many of the jobs will be lower paid and part time.

Tesco's plans will give the pounds 4bn welfare to work programme, funded by the windfall tax on the privatised utility companies, its biggest boost since the scheme was launched in July's Budget. The TUC will welcome the package today as it launches a conference on the so-called New Deal programme.

Tesco will begin recruiting unemployed from next month in a pilot scheme at its head office and at 16 stores in Sevenage and Harlow and on Tayside. The group said it was aiming to have taken on all 1,500 of the new workers by the end of next year.

Under the scheme people unemployed for more than six months get a guaranteed job for at least six months. Tesco said some of its recruits would be taken on from Government training schemes and would not be subsidised, though others would receive the pounds 60-a-week incentive paid for out of the windfall-tax fund.

One criticism of the scheme has been that the jobs would merely displace others which would have been created anyway by expanding companies. Last year Tesco created almost 7,000 jobs and expanded its total workforce by 15,000, to 160,000.

Michael Wemms, Tesco's retail director and a member of the Government's taskforce, said this was "the wrong way to look at" the announcement. "We are creating job opportunities for people who wouldn't normally get them."