The scale of the reaction by businesses to the impending hike in employers’ national insurance contributions has been very striking indeed.

That is saying something because you would always expect quite the hue and cry over any measure in a Budget from any UK government aimed at raising £25 billion a year.

However, even with full knowledge of this simple reality, the overall response of businesses has been somewhat breathtaking.

It would also surely be possible to make the argument that the reaction has been demoralising, but more of that later.

The very major impact of the rise in employers’ NI on businesses’ plans for the future has been writ large in various surveys of late. And many businesses have not even waited for the rise in employers’ NI to take effect before cutting staff numbers and raising prices.

There is absolutely no doubt about the unpopularity of the move by Chancellor Rachel Reeves on employers’ NI, in her October 30 Budget, among the business community.

The increase in this tax from April 6, which formed a central plank of the first Budget from the incoming Labour Government, is being implemented through a rise in the employers’ NI rate from 13.8% to 15% and a reduction in the threshold above which contributions are paid from £9,100 to £5,000.

The flash UK PMI (purchasing managers’ index) survey from S&P Global published on Friday revealed that UK companies have been cutting employment this month at the fastest overall pace for more than four years.

What is more, it you exclude the coronavirus pandemic period, the drop in employment recorded by the survey is the sharpest since the global financial crisis towards the end of the first decade of the new millennium.

One in three companies reporting lower staffing levels this month linked these falls directly to policy measures announced in the October 30 Budget.

The PMI report also highlighted the raising of prices by businesses as a result of Ms Reeves’ move on........

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