Hiring has fallen to a record low as businesses take a battering from
Labour
’s tax hikes and workers’ rights bill.
Research today lays bare the impact of a £25billion raid on businesses and a planned shake-up of employment law.
The damning report by the Chartered Institute of Personnel and Development (CIPD) shows the number of employers planning to recruit staff over the next three months is at its lowest since records began.
Separate analysis by accounting firm BDO showed UK employment plunged to a 12-year low after Chancellor
Rachel Reeves
hiked National Insurance contributions and introduced a minimum wage increase.
The firm said it was ‘impossible’ for businesses to plan and invest while they were focused on ‘constant firefighting’ to survive.
The Chancellor increased the amount of National Insurance employers must pay in what has been described as a tax on jobs.
The controversial policy was implemented in April, along with a 6.7 per cent minimum wage hike, to £12.21 per hour. And Deputy Prime Minister Angela Rayner is pushing her huge overhaul of workers’ rights through Parliament.
Businesses have warned that the proposals, which include expanding the grounds for unfair dismissal and higher sick pay costs, will cause them to hold off hiring.
The shake-up would also scrap zero-hours contracts, strengthen flexible working rights and remove some restrictions on trade unions.
The effects are being seen in human resources industry body CIPD’s overall net employment balance – which measures the difference between employers expecting an increase in hiring and those expecting a decrease.
It fell from 13 to 8 in the first three months of the year. That marked a record low – excluding the pandemic – since its records began in 2014. In the public sector, the measure plunged from 3 to -4, and from 16 to 11 in the private sector.
The already struggling high street has been battered by the changes. Just one in ten retailers said they are planning to hire staff in the next three months.
While across all industries, one in four employers are planning to make workers redundant in the next three months.
Meanwhile, BDO said its employment index dropped to 94.11 in April – the lowest level in 12 years. A spokesman said: ‘It is practically impossible for businesses to plan and invest with so much instability.’
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