REC response to Chancellor’s statement

Reacting to this morning’s economic statement by the Chancellor Jeremy Hunt, REC chief executive Neil Carberry says:

 “Jeremy Hunt is right to say we should be optimistic about the potential of the UK economy. There is a lot we can achieve – and we need to remember that only growth can drive prosperity and properly fund public services. The Four E’s the Chancellor set out are an important contribution to the debate, but firms will be looking to government for more than words. Actions that support long-term, sustainable growth matter. This morning’s speculation about cutting back on vital infrastructure, for instance, runs counter to an optimistic vision for Britain.

“We agree with the Chancellor that if businesses cannot hire, they cannot grow. Our report ‘Overcoming Shortages’ found that labour shortages risk costing the economy anywhere between £30 billion and £39 billion every year. And our latest January Labour Market Tracker found that there were more than 1.53 million active job postings in the UK. Looking ahead, unless Jeremy Hunt acts in the upcoming Budget to tackle labour shortages we will miss out on annual growth equivalent to two Elizabeth Lines by 2027.

“We are relieved that incentivising business to invest in skills and make it easier to recruit and retain staff is on the Chancellor’s agenda. We need a plan for jobs that sets out how to achieve that. Unlocking access to training by reforming the Apprenticeship Levy is part of it, but so is immigration, devolution of skills planning and labour market activation policies such as better childcare and local transport.”

Ends

Notes to editors:

The number of active job postings were 1.53 million in the week of 2-8 Jan 2023, a 1.5% increase compared to the previous week – REC Labour Market Tracker January 2023.

A temporary and hypothetical 10% increase in demand in the economy would need to be accommodated by 1.7 million new jobs. Without this employment increase, real UK GDP would fall by between £30 billion and £39 billion every year from 2024 through to the end of 2027, equivalent to 1.2% to 1.6% of GDP, or the size of the UK recruitment sector in 2019 – REC Overcoming shortages - How to create a sustainable labour market, July 2022.

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