Job losses in the United Kingdom under the Labour government have passed 200,000, according to official figures released by the Office for National Statistics (ONS), as higher taxes, rising minimum wages and new employment red tape squeeze hiring.
The ONS data showed payroll numbers fell by 26,000 last month. That brings the total number of jobs lost since June 2024, just before Labour took power, to 216,000.
The same report found job vacancies have slumped to 702,000, the lowest level since 2014 when the coronavirus pandemic period is excluded.
Conservative shadow chancellor Andrew Griffith said: "Labour's (Un)Employment Act is proving to be a complete disaster for our labour market." He added: "Behind every one of the 200,000 fewer payroll jobs is a person, a family. This is a predictable consequence of increased red tape and a jobs tax that has hit the poorest parts of this country the hardest."
Employers blame tax and wage rises
Business groups say Labour's increases to employer national insurance contributions, steep rises in the minimum wage, and the introduction of new workers' rights rules have made it significantly more expensive to take on staff.
The figures come as energy bills, already set to climb to a three-year high in October, look set to rise further in January as the continuing conflict in the Middle East pushes up global gas prices. Bloomberg Economics predicted yesterday that the energy price cap set by the regulator Ofgem will rise by 25 per cent at the start of the year, lifting typical annual bills by £427 to £2,150 just as colder weather sets in.
That would deepen the pressure on consumers who are also facing higher fuel costs driven by surging oil prices. Inflation linked to Donald Trump's war in Iran, along with uncertainty over UK politics, has added to caution among employers, according to the report.
Young people worst affected
Young people have been hit hardest by the downturn. Unemployment among 16 to 24 year olds stands at 16.4 per cent, more than three times the 4.9 per cent rate for the wider working-age population.
The figures raise concerns that the robust economic growth recorded so far this year is failing to translate into an improvement in the jobs market.
Think tank and business group warnings
Valentin Boboc, senior economist at the Institute of Economic Affairs, a free-market think tank, said fewer people in work and weaker pay growth would make it harder to grow tax revenues and repair the public finances. "With the Budget approaching, the government should treat these figures as a clear warning against loading further costs and restrictions onto employers," he said. "Britain needs businesses hiring and investing, not being given more reasons to hold back."
The Institute of Directors (IoD), a business membership organisation, said its own survey data painted a similar picture, with more bosses expecting to cut jobs over the coming year than to add them.
Alex Hall-Chen, an IoD policy adviser, said a subdued economic outlook and weak business confidence were important factors, but employers were also grappling with a series of policy changes that had increased the cost and risk of hiring. These included the Employment Rights Act, above-inflation increases in the National Living Wage, and higher employer national insurance contributions, she said.
She said "tangible steps" were needed "to bring down the cost of employment and restore employer confidence in hiring."
What happens next
The IoD is calling on Labour to water down its workers' rights reforms and cap future increases to the minimum wage. Hall-Chen warned that without meaningful action in next month's Budget to reduce the cost and risk of employment, "there is a real danger that labour market conditions will continue to weaken, with employers remaining unable to create new jobs."
