Five Key Actions for Labour to Revitalize Britain's Employment Sector, Suggests Recruitment Leader LEE BIGGINS
In recent times, the UK labor market has been experiencing a significant shift. The unemployment rate has reached 4.7%, the highest in four years, and there is an average of 2.3 unemployed people for every job vacancy, the highest level since the COVID-19 pandemic. This unsettling trend is further reflected in the decline of job vacancies for 37 consecutive quarters.
The private sector, which is the main driver of economic growth, is experiencing a slowdown. To counter this, the government has proposed that private investment in job-rich sectors like construction and hospitality should be incentivized with a predictable, growth-related tax framework.
The proposed Employment Rights Bill aims to make recruitment riskier for employers, a concern for businesses that are already grappling with the impact of the employer National Insurance tax hike, which has added millions to their bottom lines. To de-risk recruitment and give businesses confidence to hire while providing workers with clear, fair protections, a balanced Employment Rights framework is necessary.
The government has outlined five clear principles for its autumn budget, aimed at triggering economic growth and strengthening the labor market. These principles include investing in education and digitalization, supporting innovation and start-ups, modernizing infrastructure, ensuring climate-neutral and sustainable public investments, and maintaining social stability by avoiding cuts to the social state.
To encourage job creation, targeted tax relief and hiring incentives should be given to employers who create new, productive jobs, especially SMEs and high-growth sectors. The Autumn Budget should aim to unlock potential for a jobs boom by delivering policies that encourage hard work and career purpose, and business growth and investment in people.
However, it's not just the big corporations that are feeling the strain. Major firms are cutting graduate intakes due to the impact of AI, and nearly a million young people are not in employment, education, or training (NEETs). To address this, unnecessary hiring and compliance red tape should be cut to free up business investment and reduce job creation costs.
While boosting employment can lead to increased tax receipts, national productivity, and reduced welfare costs, welfare costs are currently ballooning due to high unemployment. To address this, the government should avoid heaping tax burdens on businesses, instead focusing on targeted measures to support job growth and reduce unemployment.
In conclusion, the autumn budget presents an opportunity for the government to address the current unemployment trends and stimulate job growth. By focusing on investment in education, digitalization, infrastructure, and sustainable public investments, while also providing targeted tax relief and hiring incentives, the government can create a balanced Employment Rights framework, de-risk recruitment, and encourage businesses to hire. This, in turn, can lead to a reduction in unemployment, welfare costs, and an increase in tax receipts and national productivity.
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