Rachel Reeves dealt major blow with 1 in 4 firms planning to axe staff

One in four employers plan to make redundancies in the next three months, research has suggested. The number of employers expecting to increase staff numbers over summer has fallen to a record low outside of the pandemic.

A survey of 2,000 businesses found issues such as rising employment costs and growing global uncertainties. The Chartered Institute of Personnel and Development (CIPD) said the rate of employers expecting to increase headcount has fallen sharply among large private sector employers, and in retail in particular.

Andrew Griffith MP, Shadow Secretary of State for Business and Trade, said: "Alongside making families £3,500 worse off, Labour’s Jobs Tax is crushing confidence, killing jobs, and pushing employers to the brink. Under Labour, the economy has flatlined and with businesses under mounting pressure, things can only get worse.

"This report only confirms what we hear daily from the shop floor to the boardroom: confidence has collapsed. Labour can’t understand why, because their cabinet has zero business experience.

“While businesses are wading through 300 pages of union-written legislation, facing higher National Insurance and mounting compliance costs, Labour still dares to claim they’re pro-growth. The truth is, they’re killing Britain’s businesses.”

James Cockett, senior labour market economist at the CIPD, said: “From April, employers across the UK have begun to feel the full effect of increases to National Insurance Contributions and the National Living Wage outlined in last year’s budget.

“They’re also looking at the potential impact of the Employment Rights Bill on employment costs and plans, and this comes at a time of global uncertainty. Employer confidence is low, which is being reflected in their hiring plans.

“The Employment Rights Bill is landing in a fundamentally different landscape to the one expected when it formed part of the Labour manifesto in summer of last year.

“It was always going to be a huge change for employers but they’re operating in an even more complex world now. It’s vital the government works closely with employers to balance the very real risk of reductions in investment in people, training and technology with their desire to reduce poor employment practice.”

A Treasury spokesman said: “In a period of global uncertainty this government is delivering stability for business.

“Trade deals with India and the US show the benefits of our cool-headed diplomacy.

“We have provided business rates relief, capped corporation tax, and are protecting the smallest businesses from the employer National Insurance increases.

“And we’ve now seen four interest rates cuts since July, making it cheaper for businesses to borrow.”