Angela Rayner warns of impending staff sacking rush ahead of new workers' rights plan
- A survey by the British Chambers of Commerce shows that the hiring rate among UK employers has dropped significantly.
- The increase in national insurance contributions and the introduction of new employment rights are causing business leaders to reconsider staffing levels.
- Overall, businesses are facing a challenging environment that may lead to layoffs and a reluctance to hire new employees.
In the UK, a recent survey from the British Chambers of Commerce highlighted a decline in hiring as businesses brace for the increased costs introduced in the latest Budget. The report revealed a drop in the percentage of employers hiring new staff from 27% to 24% in the last quarter of 2024 compared to the previous quarter. Concerns regarding skilled worker shortages were also emphasized, with 79% of companies facing recruitment difficulties, particularly in the construction, manufacturing, and logistics sectors. The economic climate is complicated further by the recent announcements regarding new employment rights, threatening to deter hiring even more. The Employment Rights Bill, slated to come into effect in 2026, aims to provide workers with greater protections, leading to fears among business leaders that they might have to let employees go to avoid complications in future employment contracts. CBI chairman Rupert Soames expressed deep concern, warning of a potential rush to terminate contracts before the new rules are implemented. Additional worries stem from the rise in national insurance contributions imposed by the Government, which many business leaders feel exacerbates the current hiring hesitance. Soames noted that by asking businesses to fill a significant financial gap in public finances, the government has jeopardized trust and confidence that companies have in its leadership. Without an immediate remedy, hiring percentages are likely to continue declining, and companies may look to reduce their workforce to offset overhead costs. In parallel, industry observers have indicated that the overall business confidence among leaders has dipped to near-record lows since the pandemic, with many expressing concerns regarding the sustainability of employing larger workforces while economic pressures mount. As major retailers start to reevaluate their staffing plans in light of these rising costs and looming legislative changes, the landscape for employment in the UK is shifting rapidly, indicating a challenging period ahead for both workers seeking jobs and companies trying to navigate those demands.