Unemployment levels remain high in the UK, with a significant issue being the falling number of available jobs, now at a five-year low, reports BritPanorama.
Small and medium-sized businesses (SMEs) are the backbone of the UK employment sector, collectively responsible for around 60 per cent of jobs, according to the Office for National Statistics (ONS). However, the number of vacancies has decreased drastically, exerting financial pressure on these firms and the wider economy.
Many SMEs express concerns that they cannot afford to hire additional staff, which further exacerbates the issue of low employment levels. The recent rise in employer National Insurance contributions, introduced under former Chancellor Rachel Reeves, is frequently cited as an obstacle to hiring.
Current Chancellor John Healey has a critical opportunity in his upcoming Budget to address the tax burden on small businesses. However, uncertainty remains regarding potential changes, with business leaders urging for relief to foster job growth.
Small business hiring costs on the rise
Small business owners are looking for assistance to alleviate their cost burdens ahead of the Chancellor’s impending Budget. Antonia Medlicott, founder of financial education specialists Investing Insiders, highlighted the ongoing struggles many firms face due to recent fiscal changes.
“I started Investing Insiders three years ago. We employ several people, we pay PAYE, National Insurance, Corporation Tax and VAT, and we’ve never once asked for a handout,” she stated, illustrating the pressures small businesses endure.
Medlicott pointed out that changes initiated in last year’s Autumn Budget have only intensified financial constraints. Since April 2025, businesses now face a 15 per cent National Insurance rate on staff, increased from 13.8 per cent, kicking in as soon as an employee earns £5,000—down from £9,100.
While the Employment Allowance increase to £10,500 purportedly supports smaller firms, Medlicott noted that as companies grow and begin hiring more staff, these costs become increasingly burdensome.
“We’re told to grow, to hire, to invest, and every time we do, the bill for doing the right thing gets bigger,” she remarked.
The 99 per cent call to Andy Burnham and John Healey
A staggering 99.2 per cent of UK businesses are classified as small or micro, translating to approximately 5.65 million entities. Collectively, they employ over 13 million people and generate £1.9 trillion for the UK economy.
Medlicott asserted, “Small businesses aren’t a line in a spreadsheet. We’re the cafe where you know the owner’s name, the accountant who picks up the phone, the local firm that gave someone their first job.”
She emphasized the need for a budget that reduces costs for businesses, enabling growth and safeguarding the economy’s foundational elements.
“It’s not fair that large businesses continue to flourish whilst small businesses are prevented from achieving the growth they need to survive,” she added, urging the government to understand the extensive impact of its budgetary decisions.
A bakery’s struggle
Medlicott’s experiences resonate with others, including the owner of Wilma’s Bakery, a chain in Essex, who voiced similar sentiments on Instagram.
“With the Budget fast approaching, to say small business owners are feeling a little twitchy would be an understatement,” the bakery noted. The owners highlighted that while politicians engage with larger corporations, smaller firms often remain overlooked.
“How do we keep employing people when the cost of employing them keeps rising?” they questioned, pointing out the challenges of investment in new locations and training amid escalating operational costs.
The post garnered extensive interaction, drawing attention to the pressing need for government support for smaller businesses which aspire to grow, not merely survive.
“Because small businesses don’t just want help to survive. We’d quite like the chance to grow too,” they concluded, underscoring the aspirations of countless enterprises navigating a challenging economic landscape.
