Job vacancies are already in decline. Raising National Insurance contributions are no way to help the economy, writes Reed CEO James Reed
National Insurance hikes are a misstep
Today the most anticipated Budget in living memory will be delivered: it’s going to be standing room only. Chancellor Rachel Reeves has a very difficult balancing act to perform, particularly because all sorts of things have been trailed in the run-up.
Some of those, particularly a rise in employers’ National Insurance contributions, have caused anxiety among various industries. My interest is in the jobs market, and from that perspective, an NI rise will certainly be unwelcome. Whether or not it breaches a Labour manifesto commitment is debatable, but it’s certainly a tax on jobs.
Vacancies declined this month for a record 27th consecutive period, in what I have called a slow motion car crash for the economy. This decline in vacancies is relentless and I fear the car crash may be speeding up, so now is clearly not the time to pile costs onto hard-pressed employers.
It’s also an interesting moment to be imposing day one employment rights that will mean firms are no longer able to bring an employment relationship to an end if it’s not working out.
Contrast what has happened in Ireland, which has slashed corporate taxes and regulation in recent years, with the UK.
The UK was traditionally well ahead in terms of GDP per capita, but Ireland took the lead in the mid-2000s and since 2015, has streaked in front. The UK has flatlined, at best, while Ireland’s GDP per capita has more than doubled.
If you’re an American company deciding today whether to invest in Ireland or the UK, there are two very clear reasons to choose Ireland. First, corporation tax in Ireland is half what it is in the UK, and second, it is in the EU, meaning it has direct access to a much bigger market.
If we are serious about growth, we need to make the UK a much friendlier place to do business. We should be looking to cut, not increase corporate taxes, and having a grown-up conversation about rejoining the single market. Neither looks likely in today’s Budget.
The right to a dignified death
I’m broadly supportive of the proposed change in the law on assisted dying. If people have a painful and incurable disease like Huntington’s or motor neurone disease that becomes progressively more unbearable to live with, it seems to me to be the right thing to do to give them the option of ending their life in a dignified way and in a place of their choosing. However, if we’re going to make this change, we should do it once and for good. Parliament must make sure it gets the law right first time, with appropriate safeguards in place, and not allow for any creeping liberalisation going forward.
Lessons from Maresca
The new manager of my team Chelsea, Enzo Maresca, is already showing great flair and leadership skill. He vowed to create the right culture at Chelsea to propel the team back into contention for major honours. Everyone was joking about how many players we had in our squad, but he has been very decisive – some might say brutal – about who he does and doesn’t want to work with. Sometimes, when you’re leading an organisation, that sort of approach is required, and to Maresca’s credit, it seems to be paying off.
Across the pond
The US election race seems to be on a knife edge with just days to go. The outcome is likely to have quite a big impact in the UK and Europe. If the tariffs proposed by Donald Trump are introduced, they will present a real challenge for our economy. It also remains to be seen how our Labour government would relate to a Trump administration: they are hardly natural bedfellows.
Hold the mirror up to nature?
The National Gallery is staging a major exhibition of Van Gogh’s most celebrated paintings, some of which are rarely seen in public, to mark its 200th birthday, and it’s a must see. There are no fewer than 61 works, each one worthy of study and attention. People used to joke that I looked like one of Van Gogh’s self-portraits (I think it’s the beard), so I have always taken a keen interest in his work. For me, his art conveys incredible colour and emotion – you feel you are staring into the man’s soul 135 years after his death.
James Reed is the chairman and CEO of recruitment firm Reed