PM says he's 'absolutely' confident in Budget as retailers warn of job losses

Sir Keir Starmer has expressed his full confidence in the Chancellor's financial plans, despite facing pressure from retailers who are warning of potential job cuts and price increases due to tax hikes announced in the .

The Prime Minister defended the decision to increase employers' national insurance contributions, stating that the previous Tory government had "refused to take a single difficult decision".

Over 70 businesses, including , and Sainsbury’s, have written an open letter to , warning that the changes announced in last month’s Budget will inevitably lead to price increases. When asked if he still had faith in the Government’s financial plans and, by extension, the Chancellor, Sir Keir confirmed at a press conference at the G20 summit in Brazil: "absolutely".

He added: "We have to stabilise the economy, we have to deal with the £22bn black hole, and we need to invest in the future of our country." He blamed the current economic mess on the last government's refusal to make any tough decisions.

The PM accused Tory leader of wanting all the benefits of public service investment without raising any money to pay for it. He said: "That’s exactly why we got into this problem in the first place – unfunded commitments. We’ve ended that, we’ve turned the page,".

Andrew Bailey, the Bank of England governor, has sounded the alarm, affirming that retailers are "right" to be concerned about potential job losses following the Budget revisions. Bailey highlighted the dangers, saying: "I think there is a risk here that the reduction in employment could be more. Yes, I think that’s a risk.'

Meanwhile, Ms Reeves unveiled a significant £25.7bn alteration to employers’ national insurance contributions (NICs) in the budget that will see an uptick in both the tax rate and the payment threshold for firms.

Retail businesses are pushing back against a wave of Budget policy changes, including packaging levies and hikes to the minimum wage, which they claim will collectively heap £7.06bn in annual costs onto the industry. The concern was foregrounded in a letter coordinated by the British Retail Consortium, with heavyweights like Amazon, , Boots, B&Q, Currys, , JD Sports, , Next, and Primark adding their signatures.

The communication reads: "We appreciate Government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this."

It continues, starkly warning of the financial load: "But the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty."

Business leaders have made it known they would "welcome" an opportunity to sit down with Ms Reeves to discuss the pressures they're facing. The group has suggested ideas such as gradually introducing the lower earnings limit for national insurance, deferring the commencement of packaging levy measures, and reconsidering business rates plans set out in the Budget.

By fine-tuning the schedule of these changes, the Government could allow businesses the necessary time to adapt, effectively lessening the negative impact on high streets and consumers, the statement suggested. When queried about whether job cuts were an unavoidable cost to solidify the economy's foundations, Sir Keir stated: "We took a number of difficult decisions in the Budget and ensured that the pay slip in people’s pockets is not affected They will not be paying more (in tax) and they’ll see that month on month in their pay slip."

Regarding the extent of those impacted, he noted the importance of considering the safeguards set for employers, especially the smaller ones, indicating that "half of employers will either see no change to their NICs, or they’ll be paying less."

These discussions follow recent comments from various industry leaders. chief Simon Roberts flagged earlier this month that tax increases would translate into higher inflation for consumers, while Asda warned of facing an additional £100m in costs due to the Budget.

Similar concerns have been voiced through another joint letter initiated by UK Hospitality, with some chiefs stating that jobs paying minimum wage might become "unviable" owing to the new threshold for national insurance contributions.

Nonetheless, the Union has labelled the warnings about potential job cuts from retailers as "utterly pathetic". Nadine Houghton, GMB national officer, said: "Multibillion-pound businesses pleading poverty because they’re being made to pay more to support public services is utterly pathetic.

"Most of these companies’ fortunes are already subsidised by the taxpayer – they pay very low wages which then have to be topped up by in-work benefits. It’s only right that they should now contribute a bit more to rebuilding our country."

The Office for Budget Responsibility is concerned about potential job losses related to NICs increases, predicting approximately 50,000 roles could be affected. Meanwhile, the Government faces mounting pressure from farmers and opposition parties regarding proposed changes to agricultural inheritance tax, which could severely impact family farms.

As part of the action, the National Farmers' Union (NFU) will be mobilizing a mass lobby of MPs on Tuesday with 1,800 members urging legislators to push back against the Government's plans to implement inheritance tax on farms valued over £1m.