UK companies are recruiting managers to work in countries such as South Africa after Britain became more expensive
Employers are moving jobs out of the UK to escape Rachel Reeves’s jobs tax. Higher national insurance payments, as well as Labour’s new workers’ rights laws and minimum wage hikes, have prompted an increase in the number of firms moving operations overseas. Agencies that specialise in helping British employers recruit staff in countries such as South Africa are enjoying a massive rise in demand, with one telling the Express that business has doubled,
Shadow Chancellor Sir Mel Stride said: “Rachel Reeves promised to support working people. Instead, her first Budget hit them with higher taxes, reduced competitiveness, and has driven jobs out of the UK.” UK firms have traditionally set up call centres or data processing centres in foreign countries, but are now off-shoring managerial roles that would previously have gone to British graduates.
Alex Fenton, chief executive of recruitment firm The Legends Agency, said there was a surge in back-office roles moving to countries such as South Africa by UK restaurants, pubs, and hotel chains.
He said: “In 2025 we dealt with 1,400 jobs that could have been in the UK. The previous year it was 600.
“The biggest trigger was the National Insurance increase, but there are so many things going towards it.”
The London-based firm has nearly tripled its workforce from 170 to 473 employees this year in response to growing demand.
“We are working with some really exciting companies, British success stories, and they are off-shoring jobs including management roles.”
It comes after Alex Baldock, Chief Executive of retail giant Currys, warned rising costs were forcing the retail giant to offshore back office jobs.
A survey by banking giant Santander also found 47% of businesses are now considering international expansion over the next three years, with managers highlighting wage inflation, energy bills and business taxation as top concerns, although new trade opportunities in markets such as the US is also driving firms to look overseas.
Sir Mel said: “The people losing out are the young, the ambitious, and those just starting out. Labour is punishing aspiration and making it harder to get on in life.
“Labour’s Jobs Tax has forced businesses into paying an additional £900 in National Insurance for a worker on the average wage – that’s a devastating blow for small firms. It’s meant job losses, frozen pay, cancelled investment, and now, a worrying rise in jobs being sent abroad.
“Rachel Reeves must urgently rethink her Jobs Tax – before more British jobs are lost to Labour’s economic mismanagement.”
A Government spokesperson said: “We are determined to make the UK the best place to start up, scale up and work in business. That’s why our Industrial Strategy and Small Business Plan give businesses and manufacturers the tools they need to grow.
“The Budget doubled down on our work to grow the economy and create good jobs, and we are delivering stability, cutting borrowing and getting inflation down.”
Chancellor Rachel Reeves announced an increase in the rate of employer National Insurance contributions from 13.8% to 15% in her first Budget in 2024. Ms Reeves has also introduced above-inflation increases to the National Living Wage as well as the minimum wage paid to workers under 21.
In addition, employers have warned that Labour’s Employment Rights Bill has made it harder to take on new staff, despite the Government watering down plans to give workers full employment rights from day one in a job.
