Brits face jobs nightmare: A THIRD of firms hit by Labour’s Budget tax raid plan layoffs or hiring curbs as business confidence slumps_Nhy
Brits are facing a jobs nightmare with almost a third of firms planning layoffs or hiring curbs to cope with extra costs from the Budget.
A closely-watched survey has found a quarter of businesses expect to make redundancies – the highest level in a decade outside the pandemic.
And the problems are worse among private sector companies set to be hit by the Chancellor’s national insurance hike. Some 42 per cent anticipate increasing prices, and 32 per cent job cuts.
Employers are also facing pressure caused by the rise in the national minimum wage and a raft of new ‘jobs killing’ workers’ rights being introduced by Labour.
The research from the Chartered Institute of Personnel and Development (CIPD) lays bare the difficult choices ahead of the NICs rise taking effect in April.
Major chains to announce job cuts include Tesco and Sainsbury’s, which together announced nearly 3,500 redundancies this year.
Rachel Reeves (pictured) has been warned that her hated £25 billion increase raid on employers’ national insurance contributions (NICs) will send job creation in the ‘wrong direction’
A closely-watched survey has found a quarter of businesses expect to make redundancies – the highest level in a decade outside the pandemic
Employers proposing to cut hiring increased in the latest quarter despite a boost in public sector funding
The net employment balance dropped sharply in the latest survey
Peter Cheese, chief executive at the CIPD, said: ‘These are the most significant downward changes in employer sentiment we’ve seen in the last ten years, outside of the pandemic.’
Describing firms’ approach to hiring as ‘heading in the wrong direction’, Cheese said it was evident that many businesses are ‘now planning to reduce headcount, raise prices and cut investment in workforce training.’
In its survey of 2,000 companies, CIPD also found that two in five plan to raise prices, in a setback for squeezed consumers.
That is unlikely to boost confidence among households feeling nervous about their jobs and wages.
The Federation of Small Businesses (FSB) said its headline confidence metric fell 40.1 points to -64.5 points in the last three months of 2024, compared to the quarter before.
And it was the lowest reading since the first three months of 2020, when the Covid pandemic spread across the UK.
Confidence across all sectors has plunged, but most acutely in accommodation and food services, which dropped to -111.0 points, and the retail sector, which fell to -94.2 points.
Pubs and shops will be especially hurt by the increases due to ‘double whammy’ changes to NICs disproportionately impacting businesses that rely on part-time workers.
Tina McKenzie, FSB’s policy chair, said: ‘Small firms are understandably nervous about their prospects as 2025 gets underway.’
Tory business spokesman Andrew Griffith, said: ‘This latest research joins a pattern of reports all demonstrating that business confidence is on the floor and a huge proportion of businesses are likely to cut jobs or hiring.
‘A change of course by the Government is long overdue. You can’t be serious about growth if you impose a jobs tax followed by the union-inspired, jobs killing employment bill.’
Gloom over the economy is growing after the Bank of England haled its prediction for UK growth this year to just 0.75 per cent.
Ms Reeves is likely to face pressure to put up taxes again as the Office for Budget Responsibility prepares new forecasts to be published in March.
Economists worry that with the outlook for growth revised down, the Chancellor’s ‘headroom’ to balance the books will be wiped out leaving her with a public finance black hole to fill.
