{"id":84079,"date":"2025-08-22T03:12:12","date_gmt":"2025-08-22T03:12:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/84079\/"},"modified":"2025-08-22T03:12:12","modified_gmt":"2025-08-22T03:12:12","slug":"aggressive-job-cuts-fuelled-by-reeves-25bn-ni-tax-raid-employers-cut-staff-for-11-months-in-a-row","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/84079\/","title":{"rendered":"Aggressive job cuts fuelled by Reeves \u00a325bn NI tax raid:\u00a0Employers cut staff for 11 months in a row"},"content":{"rendered":"

By JOHN-PAUL FORD ROJAS, DEPUTY BUSINESS EDITOR<\/a> <\/a> <\/p>\n

Updated: 17:06 EDT, 21 August 2025 <\/p>\n

Britain\u2019s private sector employers have been cutting jobs for 11 months in a row in the latest evidence of the damaging impact of Labour\u2019s \u00a325billion employer national insurance raid.<\/p>\n

A closely-watched business survey by financial firm S&P Global showed job numbers were being reduced \u2018at an aggressive rate\u2019 in August.<\/p>\n

\u2018Employment was again a weak spot as total workforce numbers decreased for the 11th month running and at a marked pace,\u2019 the report said.<\/p>\n

Separate data showed the number of new job postings fell in July after firms \u2018took a kicking\u2019 from last autumn\u2019s Budget.<\/p>\n

Businesses are still counting the cost of the rate of employer National Insurance (NI) rising from 13.8p per cent to 15\u00a0per cent and the cut in salary threshold for paying it from \u00a39,100 to \u00a35,000.<\/p>\n

The move has sharply raised the cost of hiring staff and particularly damaged sectors such as retail and hospitality that are more reliant on lower-paid and part-time workers.<\/p>\n

\"Under <\/p>\n

Under fire: Chancellor Rachel Reeves. A closely-watched business survey by financial firm S&P Global showed job numbers were being reduced \u2018at an aggressive rate\u2019 in August<\/p>\n

It has been largely blamed for the sharp rise in unemployment since the general election, with more than 200,000 people joining the dole queue.<\/p>\n

S&P\u2019s findings were revealed as part of a wider purchasing managers\u2019 index (PMI) survey of the private sector which showed business activity growing at the fastest pace in a year.<\/p>\n

The findings will be welcomed by Rachel Reeves as she hopes for a turnaround after a growth slowdown in the second quarter. But they showed a contrast between accelerating growth in the services sector, which ranges from bars and hotels to accountants and solicitors, and contraction for manufacturers battered by tariff uncertainty.<\/p>\n

The report also outlined the continuing pain being caused by the Chancellor\u2019s NI hike.<\/p>\n

It resulted in \u2018another robust rise in prices charged by private sector firms\u2019 this month \u2013 with inflation<\/a> at an 18-month high.<\/p>\n

\u2018Payroll numbers… continue to be cut at an aggressive rate by historical standards as firms cite weak order books and concerns over rising staff costs due to the policies announced in the autumn Budget<\/a>,\u2019 said Chris Williamson, the chief business economist at S&P Global.<\/p>\n

Separately, the Recruitment and Employment Confederation, said a \u2018summer slowdown\u2019 had hit new job postings which fell 9.2\u00a0per cent last month compared to June, to 652,733.<\/p>\n

Chief executive Neil Carberry said: \u2018Business optimism took a kicking after last autumn\u2019s Budget, with spring tax rises in particular weighing on employers thinking.<\/p>\n

\u2018The fear of further costs, worries about the impact of the Employment Rights Bill and new tax rules are all on employers\u2019 minds.<\/p>\n

\u2018If ministers want growth, they must deliver stability and backing for businesses.\u2019<\/p>\n

On a brighter note, a monthly consumer confidence reading published by market research firm GfK ticked higher following this month\u2019s Bank of England interest rate cut.<\/p>\n

Neil Bellamy, consumer insights director at GfK, said: \u2018The improved sentiment on personal finances is welcome, but there are many clouds on the horizon in the form of inflation and rising unemployment.<\/p>\n

\u2018There\u2019s no shortage of speculation, too, about what the autumn Budget will bring in terms of tax rises.\u2019<\/p>\n

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\n Aggressive job cuts fuelled by Reeves \u00a325bn NI tax raid:\u00a0Employers cut staff for 11 months in a row<\/p>\n