Hospitality and retail chiefs have argued that the changes disproportionately affect their businesses, which employ large numbers of people on low wages. Bosses argue that these roles are often many people’s first jobs and offer valuable experience in work.
Both retail and hospitality companies also rely on an army of part-time workers. The lowering of the National Insurance threshold means many part-time workers will now trigger a tax bill for employers for the first time.
UKHospitality, which represents pubs, restaurants and bars, has warned that the sector is facing £3.4bn in additional employment costs as a result of the Chancellor’s policies. Industry leaders warned in a letter sent to Ms Reeves over the weekend that many companies were being forced to slash investment plans and consider price rises, job cuts or closures.
For businesses that remain open, many are looking at reducing their hours by either opening for a shorter period of time during the day or staying shut for more days of the week.
Kate Nicholls, the chief executive of UKHospitality, said the Budget was “causing venues to consider cutting their opening hours, or even close on more days, to manage rising staffing costs.”
Alan Morgan, the chief executive of one of Britain’s largest restaurant groups, Big Table Group, said he was looking at cutting back opening hours.
Mr Morgan told The Telegraph: “Nothing is out of scope at the moment as the damage caused by the National Insurance changes will be substantial.”
He said options being considered included reduced opening hours and cutting staff numbers, as well as price increases. Big Table Group owns chains Bella Italia, Cafe Rouge, and Las Iguanas among others, and has more than 220 restaurants across the UK.
The British Institute of Innkeeping, which represents the pub sector, said more than 40pc of its members were planning to reduce their trading hours in response to the Budget. Three-quarters plan to cut staff hours, meaning fewer people would be working at any given time.