The latest jobs figures are bad news for the chancellor

During her autumn Budget, Rachel Reeves hiked employer national insurance contributions NICs) to plug a gaping hole in the public finances, claiming this was not a tax on working people”. The move not only made waves in the business sector, it also went against what Labour had repeatedly promised zor to do during their election campaign.

- JAMES MOORE

However, proof that the NICs increase absolutely is a tax on working people was writ large in the latest Labour Force Survey (LFS) from the Office for National Statistics (ONS). It showed that while weekly wages had grown by 5.9 per cent in the three months to February, job vacancies slumped to a four-year low in that same period.

Doubts about the accuracy of the data produced by the LFS have caused a headache for the ONS and damaged its reputation. That is not true of all its data, mind. The number of vacancies is gathered through a separate survey of employers rather than individuals, and questions haven’t been raised about this. We can take this as providing a reasonably reliable picture.

It recorded 781,000 between January and March 2025 – that number is a fall of 26,000 on the previous three-month period. The measure of vacancies is particularly significant this time round, as it is the first time that it has fallen below the prepandemic levels since the spring of 2021.

Now, the NICs increase takes effect this month – and so far, we have only seen the impact of employers preparing for it. In the coming months, we will see how they react to the reality of it. I can confidently predict that the results won’t be pretty.