Burnham urged to reverse National Insurance hike with firms stuck in 'low-hire, low-fire' mode

See more This is Money on Google - save us as a Preferred Source Updated: 04:46 EDT, 17 August 2026 Andy Burnham has been urged to ease the cost of doing business as new data shows British firms' hiring plans have been stuck at historic lows since last spring.The Chartered Institute of Personnel and Development (CIPD) said the Prime Minister should reconsider changes made to employer National Insurance contributions, which have contributed to 'fragile' employer confidence.Just 62 per cent of businesses plan to recruit over the next three months, while private sector hiring intentions remain at one of their lowest levels on record.The net employment balance, which measures the difference between firms expecting to increase and reduce staffing levels, is just +9.The retail industry has been the hardest hit by the former chancellor's tax raid. The CIPD survey suggests there will be a fall in staff levels over the next three months, having already hit a record low, according to data from the British Retail Consortium. Andy Burnham has been urged to reverse changes made to National Insurance contributionsJames Cockett, senior labour market economist at the HR lobbying group, said: 'Our data suggests that the UK labour market has largely stopped moving.'Hiring has weakened, but redundancy levels haven't risen, leaving us in a 'low hire, low fire' environment that's increasingly looking like a new normal.'Former chancellor Rachel Reeves increased the employer National Insurance contribution rate from 13.8 per cent to 15 per cent and reduced the secondary threshold to £5,000.Cockett urged Burnham to revisit the increases and restore the threshold to £9,100 to 'increase the number of part-time roles through which many young people get their first job after education'.He also highlighted Burnham's proposals to change zero-hour and low-hour contracts, which are expected to cost businesses up to £2.9billion a year, according to the Government's own analysis.Labour is set to cut the number of hours employees can work before they are offered guaranteed time.Cockett said the reforms, which are set to come into force next year, will increase administration and compliance work. A third of employers plan to use more self-employed workers and increase redundancies as a result of the reforms.The survey comes ahead of Tuesday's closely-watched jobs data, which is expected to paint a weak picture of the labour market. The previous Office for National Statistics data showed payrolled employees had fallen by 85,000 over the year to May, and June's early estimate saw a further 71,000 annual decline, while unemployment stood at 4.9 per cent.'The latest CIPD figures suggest there may not have been much of a turnaround since that ONS snapshot, with employers still reluctant to open the hiring taps,' said Susannah Streeter, chief investment strategist at Wealth Club.'The survey points to a labour market struggling to regain momentum, with businesses prioritising cost control over expansion and too many people remaining on the sidelines. 'Revitalising employment and jolting stubbornly high inactivity levels back into reverse will be a major test for the new Burnham administration.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you