Budget 2021: Going for growth will boost pay, employment and public coffers, says REC

Going for growth in today’s budget will kill three birds in one stone by boosting employment, pay and the public finances.

That’s according to the chief of the representative body of the recruitment industry that contributes around £39bn to the UK economy.

“In today’s budget, the Chancellor should look to boost employment, pay and the public finances by addressing the one thing that will drive all three – sustainable growth,” urged Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC).

Rishi Sunak will deliver his third budget today at noon. He is not expected to renege on scheduled tax hikes.

The calls come as fresh research by the REC found hiring intentions have pulled back over the last three months, generated by swelling costs steering firms away from taking on more staff amid greater economic uncertainty.

21 per cent of firms are confident in hiring, down from 33 per cent. Meanwhile, demand for workers over the next three months dipped nine percentage points to eight per cent.

Employers are struggling to source talent amid severe worker shortages that are continuing to plague the UK economy, with one in two having their recruitment plans scuppered by a paucity of candidates.

“A budget for business would avoid sucking cash out of businesses when cash flows are under pressure, and encourage business investment,” Carberry added.

Businesses are facing a multi-pronged assault on their bottom lines from supply chain breakdowns swelling costs of crucial materials. Input prices are more than 11 per cent higher than they were a year ago, according to the Office for National Statistics.

Looming tax and interest rate hikes are set to squeeze margins further.