Britain’s pool of available jobs has shrunk to 691,000, the steepest drop recorded since the beginning of the year, with the decline now stretching across nearly four years.
The Office for National Statistics has identified the culprit clearly: smaller companies are being actively discouraged from hiring by the rising cost of taking on staff.
James Reed, CEO and chairman of Reed Group, argues that this single vacancy figure ought to be the central obsession of any government serious about economic growth.
He places the blame squarely on his predecessor Chancellor Rachel Reeves, whose £25bn increase in employers’ National Insurance he warned at the time would act as a direct tax on jobs.
Reeves compounded the damage by simultaneously cutting the threshold at which businesses begin paying employer contributions, dropping it from £9,100 to £5,000, while lifting the rate itself from 13.8% to 15%.
Chancellor John Healey now steps forward with his first Budget, and Reed believes the occasion represents a genuine chance to reverse course and demonstrate that Labour has learned from those errors.
Some early signals have been cautiously welcomed: Healey has pledged to direct his Budget toward “bloody-minded entrepreneurs” and has acknowledged that successive tax changes and the government’s workers’ rights overhaul have left businesses under “a lot of pressure.”
Reed’s central prescription is bold, calling for taxes on jobs to be reduced or eliminated entirely, funded by levying new charges on artificial intelligence companies and businesses deploying AI to displace human workers, a formula he summarises as “back humans, tax robots.”
As an immediate and practical first step, Reed urges Healey to restore the employers’ National Insurance threshold to at least its previous level, reversing one of the most criticised elements of Reeves’ tenure.
The inheritance tax treatment of family businesses draws equally sharp criticism, with Reed noting that such firms account for 93% of all companies in the UK and sustain 15.8 million jobs.
Business and agricultural property relief, originally introduced in 1976 by Labour Chancellor Denis Healey specifically to protect family firms, was effectively dismantled by Reeves, and Reed argues the current changes have become a vehicle for asset strippers rather than a protection for genuine family enterprises.
He points to a particular anomaly: Labour’s policy penalises family businesses transferred between generations while applying no equivalent tax treatment to foreign owners or private equity investors, a disparity that has prompted some founders to leave the country altogether.
On the theatre of Budget day itself, Reed urges caution about headline-grabbing giveaways, recalling how Reeves drew her loudest applause in 2024 for cutting a penny off a pint, while the same statement contained £40bn in tax increases that drew far less attention.
“You would have to drink over 500 pints before you got a free one,” he noted, suggesting the penny reduction was more optics than substance.
The question of youth employment also weighs on Reed, who draws on the example of a woman who held two Saturday jobs at sixteen and credits that early experience with launching her entire career.
He asks whether the minimum wage, however well-intentioned, has now reached a level where it deters employers from offering young people their first foothold in the workforce, a question he says deserves honest debate as Alan Milburn’s report on the NEETs crisis approaches.
Healey’s apparent decision to rule out a capital gains tax increase is, in Reed’s view, a welcome sign that at least one lesson about investment deterrence has been absorbed.
The fundamental argument running through Reed’s analysis is straightforward: a government that claims growth as its priority must make it easier, not harder, to hire people, and the vacancy figures suggest time is running short.