Employers lose confidence in hiring as labour costs surge under Labour government

The Confederation of British Industry reports that just 15% of companies are confident about hiring, a drop from 24% a year ago, suggesting jobseekers are being priced out of work. Business leaders attribute the slowdown to higher labour expenses driven by recent minimum-wage hikes, a £25 billion national-insurance tax increase, and Labour’s extensive reforms granting new employee rights. Seventy-three percent say labour costs are the primary obstacle to recruitment, with 72% naming regulation as a close second.

The hiring squeeze is hitting young workers hardest, limiting entry-level opportunities. CBI chief Rain Newton-Smith warned that without clearer cost certainty and supportive regulation, firms will remain cautious, harming living standards and skill development. Recruitment firm Pertemps’ chair Carmen Watson echoed concerns, noting fewer apprenticeship offers and a shift toward hiring more experienced staff.