𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves is accused of driving jobs out of the UK by hitting employers with taxes which makes it cheaper to pay overseas workers to do back office jobs. The Treasury has been warned it is now missing out on millions of pounds in tax revenues because British people are not being hired.

The Chancellor’s decision to hit employers with a shock rise in National Insurance is blamed for hiking up the cost of employing someone in the UK.

Alex Fenton, group chief executive of the Legends Agency, which helps British businesses hire South African workers, said: “The Government claims it is championing young and working people, yet its anti-business agenda is producing the opposite outcome, with unemployment now at its highest level since the pandemic. As wages and taxes continue to rise, businesses are increasingly being forced to replace British workers with equally qualified overseas staff who cost a fraction of the price. Even sectors once thought immune to offshoring, such as construction and hospitality, are now moving back-office roles overseas simply to survive mounting costs.”

Unemployment in the UK hit 5.1% in the three months to October. There is particular concern about the challenges facing young people who want a job, with the number of 18 to 24-year-olds spoking by 85,000.

Shadow Chancellor Sir Mel Stride pointed to how people in South Africa are now working as admin assistants, accounts staff, rota managers and in back-office and customer service roles for British construction and hospitality roles.

He claims the National Insurance hike has “forced businesses into paying an additional £900 in National Insurance for a worker on the average wage”, describing it as a “devastating blow for small firms” which has led to “job losses, frozen pay, cancelled investment, and now, a worrying rise in jobs being sent abroad”.

Sir Mel said: “Labour’s jobs tax is driving jobs out of Britain, shrinking the tax base, and leaving the UK worse off. We are now seeing construction firms forced to move roles overseas simply to cope with Labour’s tax hike. Labour’s National Insurance hike is costing young British workers jobs and the UK economy millions in lost tax revenue.

Daniel Herring of the Centre for Policy Studies said: “Labour’s increase in employer National Insurance has made the cost of hiring workers uncompetitive. It also has a disproportionate impact on the lowest paid and the young, with the cost of hiring a minimum wage worker rising from £22,438 in 2024 to £25,852 in 2026. It’s unsurprising that increasing taxes on workers reduces hiring, and these firms are only responding rationally to the incentives the government has laid before them.”

The warning comes as financial advisers the deVere Group said the number of high earners leaving the UK could “potentially double” in 2026.

It claims the United Arab Emirates, Italy, Switzerland, Spain, Australia and Hong Kong are “positioning themselves aggressively” with policies to “welcome international entrepreneurs”.

Chief executive Nigel Green said: “This has turned into a contest for capital and talent.”

The Shadow Chancellor fears the job situation in the UK will worsen as new workers’ rights are ruled out.

He said: “Jobs are being cut because Labour has piled higher costs and uncertainty onto employers. At the Budget unemployment forecasts went up in every single year, and the Employment Rights Bill will only make things worse.”

A Treasury spokesperson said: “We are a pro-business Government that has capped Corporation Tax at 25%, the lowest rate in the G7, have secured trade deals with the US, EU and India, and have seen interest rates cut six times since the election, benefiting businesses in every part of Britain.”

“The fair and necessary decisions we made at this Budget and the last mean we can deliver on the country’s priorities – cutting waiting lists, cutting debt and borrowing and cutting the cost of living.”