More than 300,000 businesses are expected to lay off workers, as a flurry of data reveals a jobs market slowdown following the government’s Budget measures on employment. 

The £25bn rise in national insurance contributions (NICs) announced by the Chancellor in October is set to kick in next month, while businesses are also reportedly spooked by the government’s proposed employment rights legislation. 

According to research from the digital lender Iwoca, more than 300,000 small business owners are planning to cut staffing as a direct result of the national insurance hike. 

The firm surveyed 500 business owners, and found that 31 per cent intend to scale back pay rises and 27 per cent plan to stall staff promotions. 

Meanwhile, the BDO’s employment index has dropped from 94.72 last month to 94.30 now and is on a trajectory to hit lows not seen since the 2008 financial crash. 

More than four out of five business leaders (82 per cent) said Labour’s national insurance hike will have an impact on their firm, according to research from the British Chambers of Commerce (BCC).

The Recruitment and Employment Confederation (REC) has reported that vacancies are slowing at the second fastest pace in five years.

This comes days after worrying data from the Adam Smith Institute (ASI) about a “crisis” of business confidence following the Budget, with just 3.8 per cent of its survey respondents having ‘high or very high confidence’ in the UK as a place to do business. 

A Treasury spokesperson told The Times: “Lloyds Banking Group reported last month that business confidence is at a six-month high. Since the general election, there have been three interest rate cuts, real wages are rising at the highest level in six months and working people’s payslips have been protected from high taxes.

“The world is changing. That’s why the government is going further and faster to deliver our Plan for Change to kickstart economic growth and put more money in people’s pockets.”