Chancellor John Healey is under pressure to help firms at the Budget next month as hiring stalls.
John Healey will give his first Budget on October 28 (Image: Getty)
Chancellor John Healey was told to start backing businesses as new job figures showed firms have cut back on hiring. Businesses warned they had been “hit by a tidal wave of employment costs” and Tories blamed Labour’s tax increases, as job vacancies fell to a five-year low. Official data showed that small businesses were avoiding recruiting staff amid soaring wage costs. The Office for National Statistics (ONS) said there were around 8,000 fewer vacancies quarter on quarter in the three months to August, at 702,000, the lowest figure since spring 2021.
With the Chancellor set to announce his first Budget on October 28, the UK unemployment rate also remained unchanged at 4.9% in the three months to July. But more timely data showed that workers on payrolls slumped by 26,000 during August to 30.2 million, following a 19,000 drop in July, though these figures are subject to revision. Helen Whately MP, Shadow Work and Pensions Secretary, said: “Under Labour we’ve seen unemployment go up month after month. Now it’s stuck, leaving hundreds of thousands of people out of work and living off welfare.”
The Conservative MP continued: “Their taxes and red tape have destroyed jobs and opportunities. Fewer vacancies and fewer payroll jobs puts the security of a steady job with a regular wage out of reach for more and more people.
“Labour has piled taxes and red tape onto businesses so they can’t afford to hire people. They’ve made getting a job harder but getting welfare easier. Labour has stacked the deck against work.”
The Government has hiked minimum wage and Employers National Insurance Contributions in recent months.
Youth unemployment has also risen as retail jobs tank, the British Retail Consortium said.
Helen Dickinson, Chief Executive at the British Retail Consortium, said: “Entry-level retail jobs are vanishing at the very moment they are needed most. With one in seven young people now not in education, employment or training, the loss of 122,000 jobs in the last two years means tens of thousands fewer opportunities for young people to get their first step on the career ladder, build skills and earn a living.
“These job losses have not happened by accident. Retailers are being hit by a tidal wave of employment costs. In just two years, increases to National Insurance Contributions and the National Living Wage have added £6.5 billion in costs, while further employment reforms risk making it even harder to create and sustain jobs.
“Retailers are going above and beyond to help young people and tackle the UK NEETs crisis. Through our new initiative ‘Opening Shift’, retailers have already pledged over 11,000 work experience places, with many more to come. The industry aims to create 100,000 job opportunities for young people, but government must match that ambition with policies that support job creation, not make it harder. Raising the NICs threshold to £6,000, which would help retailers invest, hire and give thousands more young people that vital first step on the jobs ladder.”