Employment outside London fell significantly after Chancellor Rachel Reeves unveiled her first Budget, leaving regional businesses scrambling to contain costs.
Recruitment firm Robert Walters reported a 45% fall in fee income from operations outside the capital during the final quarter of 2024, while income in London rose 3%.
The company attributed the decline to a slowdown in hiring caused by Ms Reeves’ tax measures, including a £25bn increase in employers’ National Insurance contributions. Toby Foulston, chief executive of Robert Walters, said the additional charges “were a disservice to employers and it is clear that this is a cost that needs to be absorbed”.
A business update revealed that the October 30 Budget shook business confidence and weakened employers’ hiring plans in the final months of 2024. The Institute of Directors reported that business confidence fell to its lowest level since the first coronavirus lockdown in December 2024.
Worker confidence has also taken a hit, as many employees who earned “premium salaries” in the post-pandemic hiring boom are reluctant to switch roles in an uncertain market, Foulston noted. “If you put yourself in an employee’s shoes, they’ll think: ‘I’m getting paid well, and the market is volatile, so why would I move?’ He explained.
He added that the Labor Party’s plans to reform labor law in the United Kingdom could increase pressure on the labor market in Britain. He warned that “further increases in costs” for employers would be “critical” for Labor to address in cooperation with businesses, warning that reforms – particularly around zero-hours contracts – could have negative unintended consequences.
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