Falling regional employment as Labor NI rises erodes employer confidence
Hiring outside London fell sharply after Chancellor Rachel Reeves presented her first Budget, leaving regional businesses scrambling to contain costs.
Recruitment firm Robert Walters reported a 45pc drop in revenue from operations outside the capital in the final quarter of 2024, while London revenue rose by 3pc.
The company attributed the drop to a drop in employment caused by Ms Reeves’ tax measures, including a £25bn increase in employers’ National Insurance contributions. Toby Fowlston, chief executive of Robert Walters, said the fee “has been a burden to employers, and it is clear that these costs need to be reduced.”
The trade review revealed that the Budget of 30 October had dented business confidence and hampered employers’ hiring plans in the closing months of 2024. The Institute of Directors has reported that business confidence has fallen to its lowest level since the first Covid shutdown in December 2024.
Mr Fowlston noted that worker confidence has also been affected, with many workers who have received “high salaries” in post-pandemic employment reluctant to change roles in an uncertain market. “If you put yourself in the shoes of an employee, they think: I’m getting paid well, the market is volatile, why would I move?” he explained.
He added that Labour’s plans to overhaul UK employment law could increase pressure on Britain’s labor market. “Further increases in costs” for employers will be “crucial” for workers to deal with in partnership with businesses, he warned, warning that the changes – particularly around zero-hours contracts – could have unintended consequences.
