Three-quarters of businesses call for ‘damaging tax’ U-turn

By the Editorial Team · Saturday, September 19, 2026

A survey of UK business leaders shows that 74% oppose the employer national insurance increase introduced last year, with over half saying they would invest more if it were reversed. The upcoming October 28 Budget will test Labour’s response to this pressure, as the Chancellor considers reforms to boost business confidence and address concerns about hiring costs and unemployment.

A recent survey reveals strong opposition among UK business leaders to the national insurance increase on employers introduced last year, intensifying pressure on Labour ahead of the upcoming Budget. The YouGov poll, conducted among 509 business leaders for the London Chamber of Commerce and Industry (LCCI), found that 74% believe reversing the tax hike would positively impact their operations. Additionally, 56% said they would be more inclined to invest in the country if the increase were rolled back.

The national insurance rate for employers was raised from 13.8% to 15% in the 2024 Budget under then-Chancellor Rachel Reeves. This measure has faced criticism from business groups and opposition parties, who argue it raises the cost of hiring during a period of sluggish economic growth.

Karim Fateh, chief executive of the LCCI, stated that the tax increase had undermined business confidence, leading many companies to postpone investments and hiring decisions. He highlighted the extra burden on businesses considering new hires, particularly young people who are not in education, employment, or training (known as NEETs). Fateh suggested that reversing the tax rise could lower hiring costs, potentially reducing youth unemployment and easing welfare expenditures.

Shadow Chancellor Andrew Griffith echoed these concerns, describing the national insurance adjustment as a "disaster" for both businesses and job seekers. He argued the tax hike contributed to higher unemployment and fewer opportunities for young people entering the workforce. Griffith criticized Labour’s approach to economic management, contrasting it with the Conservative Party’s preference for tax cuts aimed at stimulating business growth and job creation.

The upcoming Budget, set for October 28, will be Chancellor John Healey’s first. Healey has indicated a commitment to addressing the rising costs faced by firms, pledging to “draw a line” under these increases. The Treasury emphasized that tax decisions fall within the Chancellor’s remit, underscoring the focus on supporting families, businesses, and fostering economic growth while adhering to fiscal rules.

As the debate continues, business organizations are urging the government to reconsider the tax policies affecting employers, warning of the potential long-term consequences for investment and employment in the UK economy.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.