National Insurance rise would hit job creation, firms warn

The CBI, one of the UK’s leading lobby groups which claims it speaks for 170,000 firms, suggested companies have stalled taking on new workers and investing as they await the government’s tax and spending plans.

Rain Newton-Smith, chief executive of the CBI, told the BBC’s Today programme that employers would see a National Insurance rise as a “difficult move” which would “increase the cost of taking someone on”.

This is on top of “big increases” in the National Living Wage in recent years.

Kate Nicholls, chief executive of UK Hospitality, said any rise in National Insurance would “particularly hammer sectors like hospitality, where staffing costs are the biggest business expense”.

Alex Veitch, director of policy at the British Chambers of Commerce, conceded that the government had to make “difficult decisions” in the Budget, but he warned that raising employer National Insurance contributions would “simply hobble growth and lead to businesses having less money to invest in their staff”.