UK employer national insurance hike threatens jobs and pay rises, firms warn

Pub, hotel and restaurant employers are wary of the tax change because it would increase staff costs. Photograph: Dan Grytsku/Alamy

British employers have warned that a rise in employer national insurance contributions in the budget could hit hiring and limit pay rises, hurting businesses including pubs, hotels and restaurants.

Keir Starmer and the chancellor, Rachel Reeves, have refused to rule out a rise in employer contributions in the budget on 30 October, as part of plans to plug what the government says is a £22bn hole in the public finances left by the previous Conservative government.