Commons Sense

House of Commons · Ministers' Questions

Employment Costs: Impact on Recruitment 2026-07-02

Thursday 2 July 2026 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 1 Not answered 0

Key points

  • The UK was the fastest growing G7 economy in quarter 1 of 2026
  • The Employment Rights Act, minimum wage, and national insurance contributions are creating challenges for employers in hiring new employees
  • The government is addressing labour market issues, including poor working conditions and inequality, inherited from previous administrations

Topics (select to filter)

Questions & Answers

Q1 Joy Morrissey Con Beaconsfield
Economy Employment
Context

The MP is concerned about the economic implications of rising employment costs for businesses.

Question

What assessment has been made of the potential impact of employment costs on levels of business recruitment?

Answer from Kate Dearden

The UK was the fastest growing G7 economy in quarter 1 of this year, and we know that we will only achieve a thriving economy once people have a wage they can count on. We want to grow our economy with people in secure work. That is why we are giving greater certainty to more than half the UK's workforce through our Employment Rights Act 2025 and putting more money in their pockets. External analysis by world-leading experts shows that the Act could increase employment, and our impact assessment shows that it will benefit more than 18 million workers across the country.

Partly answered

Not addressed: Did not directly address the specific impacts of employment costs on business recruitment levels.

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Q2 Joy Morrissey Con Beaconsfield
Economy Employment Business & Trade
Context

The MP is concerned about the difficulties faced by employers in Beaconsfield and Marlow due to employment rights, minimum wage, and national insurance contributions.

Question

The Employment Rights Act, the minimum wage and national insurance contributions are all making it difficult for employers to keep taking on new employees, or even to keep them at all. What advice does the Minister have for small business owners in Beaconsfield and Marlow having to make the difficult decision to either cut jobs or close their businesses thanks to this Government?

Answer from Kate Dearden

We are focused on fixing the issues in our labour market that the Conservatives neglected: poor working conditions, insecure work, inequality, the undercutting of good employers in brilliant SMEs, and the bad industrial relations that we inherited. Since July, real wages have grown. We have the third highest employment rate in the G7, and we are focused on backing our brilliant SMEs. They are the backbone of the community. I come from a small business family, and it provided me with that first job and opportunity. We want to get more people into work and to work with our SMEs, so that we can build that thriving economy where people have a wage so that they can get on.

Not addressed: Did not provide specific advice for small business owners; instead focused on broader labour market issues.

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