Rachel Reeves has suffered yet another blow this morning as new stats were published showing a slowdown in the UK labour market ahead of her National Insurance hike. The number of vacancies in the UK fell to their pre-pandemic level for the first time since May 2021, down by 22,000.
Meanwhile the number of payroll employees fell by 78,000 in March, suggesting businesses were preempting the introduction of the jobs tax on April 5. February’s figure for the number of payroll employees was also revised down to show a fall of 8,000. Pay growth remained strong, however, with weekly earnings up 5.6% in the three months to February, though this was below the 5.8% economists had forecast.
The Tories have immediately jumped in to point to today’s figures as further proof that Ms Reeves’ tax hikes are hitting jobs and growth in Britain.
Shadow Chancellor Mel Stride warned: “Today’s numbers show Labour’s Jobs Tax is costing jobs. Unemployment up yet again, and last month the number of people on payrolls fell by 78,000 as employers braced for impact.”
“It is working people who are paying the price for Labour’s mismanagement. Analysis has shown their Jobs Tax will leave working families £3,500 worse off, while their Employment Rights Bill will cost businesses £5 billion. Labour’s choices mean fewer jobs, lower wages and higher prices.”
“Only the Conservatives understand that it is business that creates jobs and wealth in our economy.”
Conversely the Trade Union Congress said the Government must act following today’s bad news for employment.
TUC general secretary Paul Nowak said: “With the global turbulence from Trump’s tariff chaos, we should be pulling all the levers possible to protect jobs.”
“The government did the right thing to safeguard jobs in steel. We will need more action in the weeks ahead to protect jobs across UK industry, including measures to bring down the cost of energy.
“The Bank of England must act too. A rate cut in May would ease the pressure on businesses hit by tariffs. And it would protect the household spending and business investment that employment growth depends on.”
Commenting on today’s pay data release, ONS director of economic statistics Liz McKeown said: “Regular pay growth remains strong, having increased slightly in the latest period.”
“Growth accelerated in the public sector as previous pay rises fully fed through to our headline figures, while pay in the private sector was little changed.”
