Recruiters have warned that Rachel Reeves’s Budget has has caused a panic in the job market as “tens of thousands” risk being moving abroad.
According to James Reed, chief executive of major recruiter Reed, employers are plotting to shift roles to lower-cost countries, such as India, to cope with the higher costs imposed by the Budget, reports The Telegraph.
Mr Reed stated that companies are looking to relocate jobs overseas to manage the “triple whammy” of rising National Insurance contributions, an increase in the minimum wage and the implementation of enhanced union and workers’ rights.
According to Government analysis, the new workers’ rights are expected to cost businesses nearly £5 billion annually.
Neil Carberry, the chief executive of the Recruitment and Employment Confederation also shared to The Telegraph that he has been in talks with the bosses about moving jobs out of Britain in the wake of the Budget.
He said: “I have talked to many larger firms where the question has been about offshoring.”
In her record-breaking tax-raising Budget on October 30, Ms Reeves announced a flagship policy of increasing employer National Insurance contributions by £25 billion starting next spring.
From April, the rate will rise from 13.8% to 15% – and the salary threshold for employers to begin paying the tax will be lowered.
This National Insurance hike will coincide with a larger-than-expected 6.7% increase in the National Living Wage.
Additionally, companies will face increased costs due to Labour’s Employment Rights Bill.
On Friday, Deutsche Bank issued a warning note to City clients stating that the Budget would cost the economy 100,000 jobs, both in redundancies and new roles not created that otherwise would have been.
Mr Reed said: “[Offshoring] is something that people have on their list of possible things to do and that has just moved up the agenda because the cost of hiring has gone up. It’s not something that companies are proud of, it’s not something they want to declare to their workforces or to their customer bases. So, it will just quietly happen by stealth.”
A Government spokesman told The Telegraph: “With our public services crumbling and an inherited £22bn fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability to allow businesses to thrive.
“By doing this, more than half of employers will either see a cut or no change in their National Insurance bills. There will be £22.6bn more for the NHS and workers’ payslips will be protected from higher tax. This Government is committed to delivering economic growth by boosting investment and rebuilding Britain.”