The Recruitment and Employment Confederation says the Chancellor must cut employment costs at the Budget to support job creation, skills investment and a stronger labour market.
Key takeaways
- The REC is calling for cuts to employer National Insurance Contributions and restoration of the NICs threshold.
- It says the Government should reduce the overall cost of hiring, rather than only focusing on young people.
- The body is also warning that guaranteed-hours measures could add cost and complexity to flexible labour markets.
The Chancellor must urgently cut National Insurance Contributions at the Budget, says the Recruitment and Employment Confederation (REC).
Ahead of the Budget this month, the REC says the Chancellor must make it easier, not harder, for employers to take a chance on new hires, invest in skills and create the jobs needed for higher economic growth next year.
Without changes to National Insurance, businesses will not go through with hiring and investment plans at the speed or scale needed to get the growth the government has promised. Employer confidence is fragile, with the REC’s most recent Jobs Outlook report showing surveyed employers’ confidence in making hiring and investment decisions in negative territory since mid-2025; and their confidence in the economy has sat in negative territory since autumn 2021.
The Chancellor must take bold action and cut employment costs to drive job creation. Higher employer National Insurance costs, rising wage bills and increasing regulation are making employers too cautious about hiring.
The REC says reports suggesting ministers are considering reducing the cost of hiring young people should be complemented by action to reduce the overall cost of hiring if the government wants to unlock growth across the economy.
The organisation is also concerned that the proposed guaranteed-hours measures risk adding cost and complexity to the flexible labour market. It says the £40 billion recruitment sector and a flexible labour market already help nearly 900,000 temporary and contract workers into work each day.
The REC supports the government’s focus on helping more of the nearly one million young people not in education, employment or training into work, and says flexible and entry-level opportunities can play an important role in helping young people enter the workforce.
