A group of Britain’s largest retailers has warned jobs will be lost and prices will rise due to the national insurance rise announced in October’s Budget.

More than 70 businesses including Tesco, Asda and Sainsbury’s voiced their concerns in an open letter to Chancellor Rachel Reeves, saying the changes mean price hikes are a “certainty”.

Ms Reeves revealed a £25.7 billion change to employers’ national insurance contributions in last month’s Budget, which would increase the rate of the tax and the threshold at which firms must pay.

Now, businesses are claiming the combined raft of packages announced in the budget including national insurance rises, packaging levies and increases to the national minimum wage could cost the industry more than £7 billion each year.

The letter reads: “We appreciate Government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this. But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”

Also joining the chorus of signatures were the bosses of Aldi, Amazon UK, Boots, Lidl, JD Sports, Primark, Morrisons and Greggs.

The group said they would “welcome” the chance to meet with Ms Reeves and recommended potential changes including phasing the introduction of the National Insurance lower earnings threshold, delaying timelines for packing levy implementations and revisiting business rates proposals announced in the Budget.

“By adjusting the timings of some of these changes, the Government would give businesses time to adjust and greatly mitigate their harmful effects on high streets and consumers,” it read.

Sentiments were echoed by another joint letter organised by UK Hospitality earlier this month and published in the Sunday Times, with some bosses revealing minimum wage jobs could become “unviable” as a result of the new national insurance contributions threshold.

Rachel Reeves Mansion House speech
Chancellor of the Exchequer Rachel Reeves delivers her first Mansion House speech on financial services.

On Saturday, Prime Minister Sir Keir Starmer defended the Budget’s “tough” fiscal decisions amid rising criticism from businesses and Farmers’ Union protests over changes to inheritance tax.

“Make no mistake, I will defend our decisions in the Budget all day long

“I will defend facing up to the harsh light of fiscal reality.

“I will defend the tough decisions that would be necessary to stabilise our economy and I will defend protecting the pay slips of working people, fixing the foundations of our economy and investing in the future of Britain and the future of Wales, finally turning the page on austerity once and for all.”