LONDON: Almost one third of small and medium-sized British employers have made staff redundant or are thinking about job cuts as a direct result of the increase in their social security bills, an industry group said on Thursday.
The British Chambers of Commerce said 13% of more than 570 member firms it surveyed had cut jobs and 19% were actively considering such a move as result of April’s hike in employers’ National Insurance Contributions ordered by finance minister Rachel Reeves.
“We were unprepared for the huge burden placed upon us, and it led many of us to rethink our growth plans,” BCC Director General Shevaun Haviland said ahead of the group’s annual conference. “As a result, our business confidence measures have fallen to their lowest levels since 2022.”
The Bank of England said last week that employers’ hiring plans were “mildly negative” due to higher labour costs with the tax hike the biggest factor. The main response was to cut pay awards followed by headcount reduction and other measures.
Reeves has said she does not plan further tax increases on the scale of last year’s 40 billion pound ($54 billion) rise. But many economists say she might be forced into fresh revenue-raising measures later this year to remain on course to meet her own budget rules. ($1 = 0.7344 pounds)
