The government's campaign to "get Britain working" is being undermined by the chancellor's Budget tax increases, the Confederation of British Industry is warning.
The Times reports CBI boss Rain Newton-Smith says businesses are less willing to "take a chance" on hiring new staff following bruising national insurance contributions rises for employers.
In fact, a CBI survey indicated as many as 50% of employers are looking to cut jobs since the tax hike, said to be costing firms £25billion, was announced.
The poll, in which 266 firms participated, shows almost two thirds of businesses are reconsidering their recruitment strategies.
Newton-Smith is set to address industry bosses at a CBI conference today and discuss how firms are key to getting 9million working-age people back to work.
She says: “Getting them back in and raising productivity are mission-critical not only for growth, but for the wellbeing, the life opportunities of those people.
"Business is absolutely essential for that, but the Budget just made it harder for firms to take a chance on people.”
It comes as it was confirmed last week that people aged between 18 and 21 who knock back job and training opportunities will lose their benefits.
A government spokeswoman told The Times: “Last month we delivered a once-in-a-parliament budget to wipe the slate clean and deliver change by investing to repair the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.”