Businesses need support in the Autumn Budget to cope with high employment costs
Businesses struggling with high employment costs must be supported by the government in the Autumn Budget, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a director at the firm, said: “The most recent employment statistics published by the Office of National Statistics (ONS) show that privately owned businesses are struggling with employment costs and need fiscal support in the Autumn Budget.”
He added: “The increase in employer’s National Insurance Contributions (NIC), to 15% from April 2025, has caused the overall number of payrolled employees in the year to July 2025 to fall by over 140,000. The chancellor, Rachel Reeves must consider if the tax take gained from this is worth the damage to businesses and the overall economy, and should either reduce employers NIC or offer them another form of financial support.”
Robert said: “There are also signs the NIC rise has impacted the number of vacancies. Employers are not replacing employees when they retire or leave, likely because they cannot afford to do so. Total unemployment as a percentage of the workforce has now increased to 4.7%. These numbers would have even been worse if it wasn’t for the increase in public sector roles, which are up by approximately 75,000 since June 2024.”
He added: “There is, however, a glimmer of good news for workers as the ONS statistics suggest that private sector wages have risen by 4.8% (excluding bonuses) and this represents a real increase, after allowing for inflation, of over 1%. Public pay rises have, however, been significantly higher at 5.6%, but the disconnect between the public and private sectors cannot continue from a fiscal perspective.”