Rachel Reeves is facing a growing rebellion over her Budget amid warnings of hospitality closures, job losses and a mounting farmer rebellion.
Britain’s biggest pubs, hotels and restaurants have told the chancellor they face being forced to shut sites and make “drastic” job cuts after the Chancellor launched a tax grab on employers.
Meanwhile, farmers will take to the streets of London next week for a mass rally amid growing fury about the decision to restrict agricultural property relief (APR) from inheritance tax.
There are also reports that farmers could blockade ports or cause food shortages by refusing to supply their produce if the government doesn't listen to calls to rethink.
Hospitality job fears
In a letter to Ms Reeves, more than 200 hospitality bosses warned the sharp increases in National Insurance contributions (NICs) were “unsustainable” and would lead to venues shutting down and slashing jobs within a year.
The letter, organised by trade body UKHospitality, said the changes would cost the sector an estimated £3.4billion annually.
Among the signatories are JD Wetherspoon, Wagamama owner The Restaurant Group, Young’s, and Whitbread, which owns Premier Inn, the UK’s largest hotel chain.
Ms Reeves last month announced an increase in NICs paid by employers from 13.8% to 15%. The threshold at which employers become liable to pay the tax also dropped from £9,100 to £5,000 per year. Both changes will come into effect from April next year.
In the letter to Ms Reeves, Kate Nicholls, chief executive of UKHospitality, said: “The NICs threshold are not just unsustainable for our businesses, they are regressive in their impact on lower earners and will impact flexible working practices which many older workers and parents rely upon.”
The hospitality chiefs warned that companies were unable to pass the higher costs onto customers, who have already been hit by rising living costs.
They wrote: “Instead, many businesses would have to reconsider investment and drastically cut jobs and reduce the hours of team members.
“Without action, many businesses will be forced to reconsider their growth plans, and many smaller venues may be at risk of closure, risking future job creation in communities up and down the country.”
Farmers take action
Meanwhile, Farmers could blockade ports or cause food shortages if the government doesn't listen to calls to rethink inheritance tax changes made in the Budget, according to Sky News.
Tractor go-slows and a strike on spreading sewage sludge on their land are also being considered by some "hardcore groups", according to Clive Bailye, the founder of The Farming Forum.
On top of national insurance rises, farming families are also having to contend with an inheritance tax of 50%, at an effective rate of 20%, imposed on farms worth over £1million, where previously they were exempt.
It was met with anger from rural communities, with warnings the change could lead to food price rises and would have a "catastrophic" impact on family farms.
The National Farmers' Union (NFU) has planned a "mass lobby" event on 19th November for its members to petition MPs to overturn changes in the budget to agricultural property relief and business property relief.
Organisers are expecting around 10,000 people to march through the capital in a peaceful rally to demonstrate the strength of feeling, which is not aimed at causing disruption to the public.
A Treasury spokesman said: “With our public services crumbling and an inherited £22billion fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability to allow businesses to thrive."