Massive Job Cuts Coming17 Feb 2025 04:54
“WORKERS face some of the steepest job losses in a decade as companies prepare to sack staff ahead of Rachel Reeves’s £25bn tax raid.
A quarter of businesses are plotting redundancies – the highest proportion for 10 years excluding the height of the pandemic, according to a survey by the Chartered Institute of Personnel and Development (CIPD).
By contrast, the survey suggests that public sector bodies expect hiring to get easier after a string of pay rises funded by the Chancellor’s Budget tax rises.
Meanwhile, a separate study suggested that small business confidence has collapsed to a five-year low.
The surveys were seized on by the Conservatives as the latest evidence that Ms Reeves’s Budget has crushed economic growth.
Andrew Griffith, the shadow business secretary, said: “This latest research joins a pattern of reports all demonstrating that business confidence is on the floor and a huge proportion of businesses are likely to cut jobs or hiring.
“A change of course by the Government is long overdue. You can’t be serious about growth if you impose a jobs tax followed by the union-inspired, jobs-killing Employment Bill.”
Peter Cheese, the chief executive of the CIPD, said the changes were concerning. Retail and hospitality employers are likely to be hit hardest when the Chancellor’s £25bn raid on National Insurance takes effect in April.
The headline rate of employer National Insurance will rise from 13.8pc to 15pc, and the threshold at which it kicks in will fall from pay of £9,100 to just £5,000. In the same month the National Living Wage will rise by 6.7pc to £12.21 per hour.
As well as making redundancies, employers are also cutting back hiring.
One in three are either laying off staff or taking on fewer workers, while 42pc are raising prices to cover the higher tax bill and a quarter are cancelling plans to invest or grow their businesses. The record tax-raising Budget included a significant rise in government spending and borrowing, in part to give public sector staff bigger pay packets.
The CIPD’s survey found that 58pc of HR workers in the public sector expect recruitment to become easier in the coming years, with 56pc anticipating fewer staff will leave as a result.
A survey by the Federation of Small Businesses (FSB) found that confidence is in free fall. Its index of sentiment plunged over winter to its lowest since the opening months of 2020, when the pandemic swept the globe forcing the nation to lock down.
A quarter of small businesses expect to shrink in the first quarter of the year. More than two-thirds of bosses said the tax burden is a critical barrier to growth.
Tina McKenzie, of the FSB, said red tape was also threatening businesses. She said: “The upcoming Employment Rights Bill is a major source of stress for small firms, with nine in 10 business owners saying they are concerned about its introduction.”
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