Devon firms hold back hiring before Chancellor Healey's first Budget
Businesses at the Devon Business Show say higher employer National Insurance and minimum wage costs are delaying recruitment ahead of Wednesday's Budget.
The story in focus
BBC News reports that firms at the Devon Business Show in Plymouth, including Links Publishing's Tim Randell, are holding back on hiring ahead of Chancellor John Healey's first Budget on Wednesday, citing higher employer National Insurance contributions introduced in 2024 and rises in the National Minimum Wage. Treasury figures cite business rates cuts and National Insurance relief for under-21s and apprentices.
- Links Publishing's Tim Randell says he is holding back from filling two positions because of employment costs.
- Firms cite increases in employer National Insurance contributions introduced in 2024 and National Minimum Wage rises.
- Chancellor John Healey will deliver his first Budget on Wednesday and has refused to rule out tax increases.
- HM Treasury cites business rates cuts, a cap on corporation tax, £4.3bn of support to limit bill rises, and National Insurance relief for under-21s and apprentices under 25.
- Hospitality representatives call for VAT to be cut from 20% to 10%.
Hiring held back
At the Devon Business Show in Plymouth, some firms said they had struggled for two years with increases in employers' National Insurance contributions introduced in 2024 while coping with National Minimum Wage rises. Tim Randell, who runs Links Publishing in Tavistock, said he has two positions he could fill but is holding back because of employment costs.
The 2024 Budget set employer National Insurance at 15% on salaries above £5,000 from April 2025, up from 13.8% on salaries above £9,100. The legal minimum wage for over-21s rose from £11.44 to £12.21 per hour from April 2025.
Budget requests
Chancellor John Healey will deliver his first Budget on Wednesday and has refused to rule out tax increases after acknowledging government borrowing costs are at historic highs. Michelle Bunker of WGP Maintenance said she wants National Insurance contributions to start going down. Kevin Miller of Apex HR called for tax relief to reduce the cost of employing people.
Melanie Williams of the Duke of Cornwall Hotel and Pete Adams of the Moxy Hotel joined calls for a VAT cut for hospitality, from 20% to 10%. Helen Wylde-Archibald, CEO of Devon Chamber of Commerce, said businesses need a soft touch with the Budget so they can grow.
Treasury position
HM Treasury said the chancellor is giving firms breathing space to invest and grow, citing business rates cuts, a cap on corporation tax, £4.3 billion of support to limit bill rises, and employer National Insurance contributions relief when hiring under-21s and apprentices under 25. It said tax decisions are for the chancellor to set out at fiscal events rather than comment on speculation.
What costs do Devon firms cite for holding back on hiring?
Firms cite higher employer National Insurance contributions introduced in 2024 and increases in the National Minimum Wage, saying these employment costs are delaying recruitment ahead of Wednesday's Budget.
Sources & further reading
Help keep the record accurate. Send a correction.
