REC responds to Shadow Chancellor’s speech

Commenting on Shadow Chancellor Rachel Reeves’ speech today, Shazia Ejaz, REC Director of Campaigns and Research, said:

“The Shadow Chancellor’s commitment to working in partnership with business must extend to working with the recruitment sector on initiatives to overcome labour and skills shortages. This will help avoid the risk of the UK economy missing out on £39 billion every year caused by these shortages.

“Our recruiter members and their clients are clear that better aligning the skills system with business and worker needs will help. Therefore, we urge Labour’s to act on its commitment to reform the Apprenticeship Levy within its first 100 days in government.

“Our assessment of the labour laws needed for the future sets out how to update legislation to help employers more easily embrace the workforce’s demand for more flexible ways of working.

“Anything that gives businesses a better understanding of their tax obligations such as a business taxes roadmap, will help employers plan. This will translate into knowing when they can afford to hire and invest in skilling up their workforce.

"Ultimately, we need greater economic growth to fund better public services without raising taxes. A meaningful industrial strategy that puts people at its core is what any economic growth plan should do. Investment in skills, transport, childcare and devolution, gives us the best chance of achieving the flourishing labour market needed to drive growth. A good start would be a revival or replacement of the Industrial Strategy Council that was disbanded back in 2021.”

Notes to editors:

In our Overcoming Shortages report, we show exactly how much damage could be done if we don’t step up. With a 10% surge in demand for staff across the economy, and the labour market restricted by shortages, we could see a 1.2% fall in expected GDP and productivity by 2027 – costing the economy anywhere between £30 billion and £39 billion every year. This figure is just short of the entire current defence budget, or two whole Elizabeth Lines.

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The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com

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