MAJOR retailers – including Bradford-based Morrisons – have issued a warning to Rachel Reeves that raising taxes in the autumn Budget could contradict her plans to improve UK living standards.

Bosses of more than 60 major chains – including Morrisons’ CEO Rami Baitieh – have signed a letter to the Chancellor, sent by trade body the British Retail Consortium (BRC).

It warns that further tax rises on businesses could result in the Labour Government breaking its manifesto pledge to provide “high living standards”.

“Labour’s manifesto made a clear and welcome promise to deliver good jobs and higher living standards but if future policy decisions lead to rising prices and fewer jobs, then those commitments are at risk,” the letter reads.

Many businesses have seen their labour costs rise due to the rate of employer national insurance being increased in last year’s Budget.

Some retailers have blamed the tax hike for the decision to raise prices in shops, which they said has allowed them to partly mitigate the impact.

Others have resorted to cutting staff or freezing hiring, while some businesses said they were absorbing the higher costs into their profits.

But the letter states: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.”

The national minimum wage also increased in April, providing a boost to low-income workers across the UK.

However, businesses say the overall jump in staff costs, coupled with new taxes on plastic packaging, have added £7 billion in costs.

“As the chief executives of many of Britain’s leading brands, we are determined to help deliver your growth ambitions,” the letter reads.

“However, for this to be possible, the conditions for stable prices, continued investment and sustainable employment must be at the heart of this year’s Budget.”

The BRC is calling for a significant reduction in business rates on retail, hospitality and leisure firms, and assurances that no shops will pay more tax than they currently do.

The autumn Budget is expected to take place in either October or November.

A Treasury spokesperson said: “We are a pro-business Government – 380,000 jobs have been created since the start of this Parliament and business confidence is at a 10-year high, according to a recent Lloyds Bank survey.

“Since the election, we have struck three major trade deals with the EU, US and India, business rates are being reformed and corporation tax is capped at 25 per cent.”