Devon Firms Say Employment Costs Are Holding Back Hiring

Some businesses are calling for the cost of employing staff to come down in the Budget on Wednesday. A publisher from Tavistock, Devon, says he is holding back from filling two new positions because of those costs.

Tim Randell, who runs Links Publishing, said: "All we've had for the last two Budgets is more tax, more expense, the living wage, and all those things mean that people like me are not employing the young." He added: "I have two positions that I could fill, want to fill, want to expand and grow my business, but I'm holding back because of the employment costs."

The comments came at the Devon Business Show, hosted by Devon Chamber of Commerce at the Plymouth Life Centre. Some firms there said they had struggled for the past two years with the rise in employers' National Insurance contributions introduced in 2024, while also coping with increases in the National Minimum Wage.

What changed in 2024

In the 2024 Budget, Rachel Reeves announced that companies would pay National Insurance at 15% on salaries above £5,000 from April 2025. The previous rate was 13.8% on salaries above £9,100. The legal minimum wage for over-21s rose from £11.44 to £12.21 an hour in April 2025.

Michelle Bunker, from WGP Maintenance in Plymouth, had one message for the chancellor: "I want to see National Insurance contributions starting to go down." Kevin Miller, who runs Apex HR in Plymouth, called small businesses "the backbone of the whole economy" and asked for some tax relief.

Tens of thousands of people work in hospitality and catering in Devon, and hotel bosses said the industry had been going through a tough time. Pete Adams, general manager of the Moxy Hotel in Plymouth, joined a campaign, spearheaded by chef Tom Kerridge, to cut VAT for pubs and restaurants from 20% to 10%. He said it would let hotels pass some savings on to customers.

Elsbeth Hallam, from the Plymouth-based Hugs Children's Cancer Charity, said the cost of living was affecting charities as much as businesses. "People are definitely being tighter on what they're spending their money on," she said.

The Treasury's answer

Chancellor John Healey will deliver his first Budget on Wednesday. He has refused to rule out tax increases after acknowledging that government borrowing costs are at "historic highs".

A spokesperson for HM Treasury said the chancellor is giving firms breathing space to invest and grow, with business rates cuts, a cap on corporation tax, £4.3bn of support to limit bill rises, and employer National Insurance relief when hiring under-21s and apprentices under 25.

Helen Wylde-Archibald, chief executive of Devon Chamber of Commerce, said businesses in the county were "planning for a better future" and needed a "soft touch" from the Budget.

Source: BBC News