Is Rachel Reeves a toxic influence in the workplace?

If you make hiring people more expensive, fewer people get hired. That might seem a bit like saying “grass is green”, but it appears someone forgot to tell the chancellor. We're now living with the results. The latest labour market update from the Office for National Statistics (ONS) shows job vacancies took a swan dive between March and May, declining by 63,000 to 736,000.

- James Moore, The Independent

The number of available openings has been in decline for quite some time, but that is a particularly big fall. It coincides with — and clearly shows the effect of - the chancellor's decision to increase employer national insurance contributions (NICs), which came into effect at the beginning of April.

No wonder that 77 per cent of businesses with more than 10 employees told the ONS in late May 2025 that staffing costs — which includes wages, bonuses, national insurance and pension contributions - increased over the last three months. When the tax rise was announced, several big employers gave warning that the inevitable consequence would be fewer hires. Probably layoffs, too. “Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on,” said Liz McKeown, director of economic statistics at the ONS. This used to be called “natural wastage”.