The boss of Next today warned that high National Insurance rates for employers due to come into effect in April could make it "harder for people to enter the workforce."
The high street fashion giant’s CEO Lord Wolfson told the BBC that the rise in NI announced by Rachel Reeves in the October Budget would be a hammer blow for retailers and meant "the axe [had] fallen particularly hard" on entry-level jobs.
He called on the government to delay the full impact of the tax changes over time, rather than introduce it in one go in April.
The Chancellor said in the Autumn that the rate of NI contributions for employers will go up from 13.8% to 15% while the threshold at which they start paying it falls from £9,100 to £5000.
The measure is designed to close the £22 billion hole in the national accounts that Reeves said she inherited from her predecessor Jeremy Hunt and is due to raise around £25 billion a year by 2030.
Businesses are also facing a rise in the National Living Wage in April at double the rate of inflation.
But Lord Wolfson, who is a Conservative peer, said these changes would hit employers with large numbers of lower-paid or part-time workers hardest.
Next's wage bill is set to rise by £70 million next year. Lord Wolfson, one of Britain’s longest serving and respected business leaders said this would lead to a cut in the number of employee hours worked – either through fewer workers or fewer hours per employee.
He pointed out that while the increase in tax on a £60,000-a-year job was only around 2%, for a part-time living wage worker it was around 6.5%.
He added: "So the axe has fallen particularly hard on those entry-level, National Living Wage jobs, and that's where the pain is going to be felt the most."
"My worry is that it's going to be harder and harder for people to enter the workforce," he said.
"It's very difficult to see how such a big increase in the cost of entry-level work is going to result in anything other than a reduction in the number of opportunities available."
But a spokesperson for the Treasury said more than half of employers would either see a cut or "no change" in their National Insurance bills.
