More businesses forced to raise prices after Labor’s foray into employers’ national insurance contribution

Workers’ foray into employers’ national insurance contributions (NICs) has led to a sharp rise in companies seeking to raise prices, official figures revealed yesterday.

The Office for National Statistics (ONS) said the proportion of businesses planning to raise prices in the next month rose from 11 per cent to 15 per cent.

And the main reason for doing so was the rising cost of labor, cited as 39 percent higher. Several businesses said they would be affected by the increase in National Insurance, the ONS said.

There was also a significant increase in businesses saying their main concern going forward was taxes, which rose from 10 percent to 14 percent.

It is the latest evidence that Rachel Reeves’ £25bn raid on employers’ NICs is taking a heavy toll on British businesses.

The Chancellor increased the rate from 13.8 per cent to 15 per cent and reduced the threshold for paying it from £9,100 to £5,000.

The ONS figures, compiled after the Budget, come after more than 80 retailers wrote to Reeves this week to warn of job losses, store closures, lower wages and higher prices.

Research from wealth manager Evelyn Partners, which surveyed 500 business owners in September and October, found that 31 percent are considering layoffs over the next year.

It also found that 30 per cent said they were likely to default on their debt over the next 12 months.

Claire Burden, head of the consultancy team at Evelyn Partners, said: ‘The cumulative impact of inflation over recent years continues to hit businesses hard.

‘Many industries have been unable to come to grips with the full extent of the cost increases and this has left some businesses struggling to survive. The recent Budget increased pressure on businesses with the need to plan for rising costs.

“Businesses in labour-intensive sectors, such as hospitality, will be particularly affected and some businesses will struggle to stay afloat.”

The Labor Party has faced criticism over National Insurance. Andrew Goodacre, head of the British Independent Retailers Association, said Reeves risked causing the “destruction” of the High Street.