The jobs drought: Vacancies are at 12-year low as firms stop hiring amid fears over Labour’s ‘attacks on business’
Job vacancies across the UK have fallen to their lowest level in 12 years, according to new figures, as employers pull back on hiring amid growing unease about the government's economic policies. Business groups and commentators cited in the report point to what they describe as Labour's "attacks on business" — including rising employment costs and tax changes — as key factors discouraging firms from recruiting, raising concerns about the health of the broader economy.
The slowdown reflects a broader pattern of employers freezing recruitment plans rather than expanding, with firms citing higher costs and reduced confidence in the business environment as reasons for caution. The trend adds to wider pressure on the government over its handling of the economy, with critics arguing that recent policy decisions are weighing on job creation and business sentiment at a time when growth remains fragile.
- UK job vacancies hit a 12-year low as hiring slows sharply.
- Firms blame Labour's business policies for reduced recruitment.
- Adds to pressure on the government over economic management.
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The UK’s labour market is the system through which people find work and employers recruit staff. A job vacancy is a position an employer is seeking to fill, so vacancy figures offer one indication of how much businesses are hiring.
The government sets policies on areas such as tax and employment, while businesses decide how many people to employ. Labour is the governing party, and business groups represent employers’ views; they may disagree with the government about how policy affects costs and recruitment.
Fewer vacancies can mean it is harder for people looking for work to find a suitable role, and can reflect employers’ expectations about future demand and costs. The figures are one part of the wider economic picture, alongside measures such as employment, wages and economic growth.
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The strongest fair case each way — we don't pick a winner.
The case for
Employers face materially higher employment costs under Labour's policies, particularly the increased National Insurance contributions, which directly reduce hiring capacity and profitability. These policy changes, combined with reduced confidence in a government perceived as unsupportive of business investment, cause firms to rationally pull back on recruitment. The timing of the vacancy decline following these policy announcements supports a causal link between Labour's economic approach and hiring decisions.
The case against
The decline from record-high vacancies reflects the natural cooling of an unsustainably tight labour market, whilst global headwinds—higher interest rates, inflation, geopolitical uncertainty—are primary drivers of hiring caution. Labour's policy changes are modest in scale and similar to approaches adopted across OECD economies, which are also experiencing labour market cooling. The revenue raised funds public services that support business productivity and long-term economic growth.