More than 180,000 Brits have been left jobless in the past year (Image: Getty)
Rachel Reeves has been slammed for unleashing a “jobs bloodbath” as workers are being axed at an alarming rate of 1,000 per day, according to damning new figures.
More than 180,000 Brits have been left jobless in the past year, with a staggering 64,000 losing their livelihoods in just the last two months, official data reveals. In a scathing indictment of Labour’s disastrous economic policies, overall unemployment has now hit 5 percent for the first time since the Covid pandemic wreaked havoc on the nation, reports the Daily Mail.
The shocking statistics also show a spike in the number of people on benefits who are not required to work at all, with a whopping four million now sitting at home, making up half of the total number claiming Universal Credit.
On Tuesday, the embattled Chancellor faced accusations of driving the decline with her punishing £25billion national insurance raid on struggling businesses.
Public sector pay outstrips private sector
Ms Reeves also came under fire for overseeing a soaring public sector wage bill, with pay hikes outstripping those in the private sector, despite grappling with a £30billion black hole in the public finances.
Experts are now sounding the alarm, warning that the “madness” of Labour’s policies will only make matters worse as bosses hold back on investing in staff amid fears of another crippling tax grab in this month’s Budget.
They have urged Ms Reeves to consider stalling any increase to the National Minimum Wage and called for Labour’s controversial new Employment Rights Bill to be scrapped.
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Tories slam ‘jobs bloodbath’
Tory shadow chancellor Sir Mel Stride blasted: “These figures confirm a jobs bloodbath under Labour – with 1,000 jobs lost every single day in the run-up to the Budget.
“Keir Starmer and Rachel Reeves have taxed jobs, knocked business confidence and taken Britain back to pandemic-level unemployment. More tax rises loom.
“More damage to come. Labour’s failure isn’t an accident – it’s the result of their choices.”
Unemployment surges under Labour
Tuesday’s grim Office for National Statistics (ONS) figures revealed that alongside the drop in the number of people on payroll, unemployment also increased by a staggering 349,000, or 24 percent, since Labour seized power last summer. Back then, the unemployment rate stood at 4.1 percent.
The data also exposed worsening long-term youth unemployment, with the proportion of jobless 18-24 year-olds who have been out of work for more than a year rising to 26 percent, the highest since 2015.
Inflation batters living standards
Even for those lucky enough to have a job, stubbornly high inflation is eating away at living standards, with pay growth in real terms – stripping out the impact of soaring prices and housing costs – plummeting to just 0.5 percent, the weakest since 2023.
Commenting on the jobs crash, Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said: “This fall is a direct result of the recent increase in employers’ National Insurance contributions and the upcoming Employment Rights Bill.”
Rachel Reeves has been slammed for her high tax and spend policies (Image: Getty)
Hiring becomes ‘costlier and riskier’
He warned the overall effect of the policies was “that hiring employees has become a costlier and riskier proposition for businesses”.
There are mounting fears the deteriorating jobs market will see Labour break its manifesto pledge by hiking income tax, despite the threat it would inflict further damage on the already-sluggish economy.
Businesses also face another hammer blow if the Chancellor takes an axe to so-called ‘salary sacrifice’ schemes that allow them to reduce tax paid on contributions to workers’ pension pots.
Experts slam Labour’s ‘madness’
Simon French, chief economist at City broker Panmure Liberum, slammed it as “madness to be pressing on with the rights bill and above inflation increases to the national living wage at a time when the labour market is cooling rapidly”.
Yael Selfin, chief economist at accountancy firm KPMG UK, said: “Hiring activity remains weak and survey evidence suggests that additional uncertainty from the Budget is keeping a lid on activity, as employers await the details of any fiscal measures.”
Former Bank of England rate-setter Andrew Sentance said the Chancellor was “warned last October that increasing employer NI – the ‘tax on jobs’ – would stifle job creation and raise unemployment”.
He added: “With the unemployment rate up to 5 per cent, this is exactly what has happened, and there is probably more bad job news to come as employers adjust to higher NI.”
Hospitality and retail worst hit
Britain’s hospitality and retail sectors were worst hit by the national insurance raid and on Tuesday, Kate Nicholls, chair of trade body UK Hospitality, said the latest figures were “a shocking indictment of the damage caused”.
Liz McKeown, director of economic statistics at the ONS, said: “Taken together these figures point to a weakening labour market.”
Tory business spokesman Andrew Griffith said: “Labour ministers should hang their heads in shame.
“The £25 billion NI hike, falling business confidence and threat of draconian union and worker rights have all contributed to today’s rise in unemployment to 5 per cent.
“With young people most impacted, ‘generation jobless’ is now happening on their watch.”
Rachel Reeves puts country on notice for tax rises in Budget
Pound slides on gloomy data
The ONS figures, which are likely to pile pressure on the Bank of England to slash interest rates next month, sent the pound tumbling against the dollar and the euro.
Work and Pensions Secretary Pat McFadden insisted in response to the ONS numbers that the government was “stepping up our plan to get Britain working”.
But the deteriorating jobs figure only adds to the catalogue of depressing economic numbers facing the Chancellor.
The Bank of England has predicted that unemployment will continue to rise, but had not expected it to hit 5 per cent until later this year.
Inflation blamed on Reeves
Meanwhile, inflation has remained at a stubbornly high 3.8 per cent, nearly twice the 2 per cent level targeted by the Bank. That too has been blamed on Ms Reeves as her national insurance hikes were passed on to consumers in the form of higher prices.
At the same time, overall economic performance has been sluggish.
Official figures due on Thursday are expected to show a further slowdown in growth to a measly 0.2 per cent in the third quarter of the year.