Job losses under Labour soar past 200,000 as employers crushed by tax and wage hikes

See more This is Money on Google - save us as a Preferred Source Updated: 19:23 EDT, 15 September 2026 Job losses under Labour have soared past 200,000 as higher taxes, minimum wages and red tape crush hiring, official figures showed yesterday.Damning statistics from the Office for National Statistics (ONS) revealed that payroll numbers slumped by 26,000 last month. That took the total number of jobs lost since June 2024 – just before Labour took power – to 216,000.And the grim report also revealed job vacancies have slumped to 702,000, the lowest level since 2014 when excluding the pandemic.Tory shadow chancellor Andrew Griffith said: ‘Labour's (Un)Employment Act is proving to be a complete disaster for our labour market.‘Behind every one of the 200,000 fewer payroll jobs is a person, a family.‘This is a predictable consequence of increased red tape and a jobs tax that has hit the poorest parts of this country the hardest.’ Payroll numbers have dropped sharply since Labour took power in 2024 Business groups say Labour’s national insurance hikes, steep minimum wage increases, and the introduction of workers’ rights rules have made it much costlier to take on staff.It comes as energy bills – already set to climb to a three-year high in October – look on course to rise even further in January as continuing conflict in the Middle East pushes up global gas prices.Experts at Bloomberg Economics yesterday predicted the energy price cap set by Ofgem will rise by 25 per cent at the start of the year, lifting typical annual bills by £427 to £2,150 just at the time the cold will be biting.That will deepen the misery for consumers who are also being squeezed by the soaring cost of fuel caused by surging oil prices.And Inflation caused by Donald Trump’s Iran war and uncertainty over UK politics have particularly added to caution among employers.Young people have been worst hit, with unemployment among 16 to 24 year olds at 16.4 per cent, more than triple the rate of 4.9 per cent for the wider working population.It will raise fears that robust economic growth so far this year is failing to translate into an improvement in the jobs picture.Valentin Boboc, senior economist at the Institute of Economic Affairs, a free-market think-tank, said: ‘Fewer people in work and weaker pay growth will also make it harder to grow tax revenues and repair the public finances.‘With the Budget approaching, the government should treat these figures as a clear warning against loading further costs and restrictions onto employers.‘Britain needs businesses hiring and investing, not being given more reasons to hold back.’The Institute of Directors (IoD), a business group, said its own figures painted a similar picture, showing that more bosses expect to reduce job numbers over the coming year than increase them.IoD policy advisor Alex Hall-Chen said: ‘While a subdued economic outlook and weak business confidence are important factors, employers are also grappling with a series of policy changes that have increased the cost and risk of hiring.‘These include the Employment Rights Act, above-inflation increases in the National Living Wage, and higher employer National Insurance contributions.’She said ‘tangible steps’ were needed ‘to bring down the cost of employment and restore employer confidence in hiring’.The IoD is calling for Labour to water down workers’ rights reforms and cap minimum wage hikes.‘Without meaningful action in next month’s Budget to reduce the cost and risk of employment, there is a real danger that labour market conditions will continue to weaken, with employers remaining unable to create new jobs,’ Ms Hall-Chen said.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