The London Chamber of Commerce and Industry (LCCI) has called on the Chancellor to reverse the 2025 rise in employer National Insurance at the Budget on 28 October, after its latest survey found that nine in ten London businesses did not try to recruit for the second quarter running.
The figures come from the LCCI’s Quarterly Economic Survey for the third quarter of 2026, launched on 1 October 2026. The chamber set out its Budget asks in statements on 7, 20 and 23 October 2026 and sent them to London Business Daily on 27 October 2026.
What the survey found
For the second consecutive quarter, 90% of London businesses did not attempt to recruit. Of those that did, 55% had difficulties.
Almost two thirds (64%) of businesses were operating below full capacity, up from 59% in the second quarter. Cashflow worsened for 31% of firms and improved for 12%. Asked what the Government should prioritise before the Budget, 60% said lowering inflation and the cost of doing business. The survey was carried out online among members of the YouGov UK panel; the release did not give the number of respondents.
The Budget asks
Responding to labour market figures from the Office for National Statistics on 20 October 2026, Karim Fatehi OBE, chief executive of the LCCI, said: “Vacancies are at their lowest level outside the pandemic since 2014, and the ONS says smaller firms are holding back because of higher labour costs. That matches what our members tell us: for the second quarter running, nine in ten London businesses did not attempt to recruit at all.
“When hiring gets this expensive, firms stop trying, and young people looking for a first job lose out first. The Chancellor can change that at the Budget on 28 October by reversing the 2025 rise in employer National Insurance and removing it entirely for firms that hire a young person who has been NEET for a year or more.”
On 23 October 2026, responding to Government measures to cut red tape and business costs, he said the move was welcome and that “London businesses will want to see the detail behind these proposed savings and how quickly they will translate into tangible benefits.”
He said the Budget “must go further than incremental changes” and “must set a clear direction for making the UK fundamentally more competitive and attractive for investment, with meaningful action to reduce business costs, support recruitment and give firms the confidence to invest and grow.”
The LCCI represents a network of more than 12,000 businesses across London’s 33 boroughs, from start-ups and microbusinesses to large corporates, and was founded in 1881. More on London employers is in our companies section, and the latest count of new firms is in our report on London business births.