Keir Starmer faces further fallout from his government’s first budget, with the prime minister’s latest initiative to reduce welfare spending running up against UK business warnings about job cuts due to higher taxes.

As Starmer prepares to reveal legislation this week aimed at getting people back in to work and cutting the nation’s £137 billion ($172 billion) benefits bill, the head of the country’s most influential business lobby said businesses are in “damage control” after Chancellor of the Exchequer Rachel Reeves’s tax-raising budget, and that nearly half are planning to reduce the size of their workforce.