November 19, 2024, 10:44 a.m.

Some of the UK’s biggest retailers have said price rises and job cuts are “inevitable” following Chancellor Rachel Reeve’s National Insurance hike.

More than seventy companies including Asda, Tesco and Sainsbury’s have written an open letter in response to the upcoming £25 billion increase in employers’ social security contributions.

Although the rate has been increased, the threshold at which businesses must pay has been lowered, with ministers insisting this is the only possible way to boost public services.

However, the OBR predicted that the fiscal measures would boost inflation and unemployment.

In today’s letter, the businesses warn that the huge tax rise, alongside packaging taxes and the increase in the national minimum wage, could cost retailers more than £7 billion a year.

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The letter said: “We appreciate the government’s focus on improving the fiscal position and investing in public services; we also recognize the role that businesses play in this support.

“But the sheer scale of the new costs and the speed with which they are occurring creates a cumulative burden that will make job losses inevitable and rising prices a certainty.”

The bosses of Aldi, Amazon UK, Boots, Lidl, JD Sports, Primark, Morrisons and Greggs

The group said it would “welcome” the opportunity to meet Ms Reeves and suggested changes such as phasing out the lower income threshold for NICs, delaying the implementation deadlines for packaging levies and the revision of the professional rate proposals set out in the budget.

The letter said: “By adjusting the timing of some of these changes, the Government would give businesses time to adapt and significantly mitigate their harmful effects on high streets and consumers.”

This follows another joint letter organized by UK Hospitality earlier this month which raised fears that minimum wage jobs could become “unviable” due to the NICs overhaul.

Keir Starmer has defended the Budget’s “tough” tax decisions following growing criticism from business and protests from the Farmers’ Union over the chances of imposing inheritance tax.

He said: “Make no mistake, I will defend our decisions in the budget all day long.

“I will defend myself in the harsh light of budgetary reality.

“I will stand up for the tough decisions that would be needed to stabilize our economy and I will stand up for protecting workers’ paychecks, repairing the foundations of our economy and investing in Britain’s future and that of the Land of Wales, to finally turn the page on austerity once and for all.