Patrick Dardis, the chief executive of Young’s, said the Chancellor and Prime Minister must “wake up and smell the coffee” amid anger from businesses over the rise.

Young’s is facing well over £1m in extra National Insurance costs from April, on top of an extra £3m for the higher national living wage and a £1m bill for rising energy costs, he said.

Mr Dardis added: “In my working history – over 40 years – I have never seen anything like it.

“Stop playing politics with people’s lives. Decide whether it’s “partygate” or protecting the millions of lives affected by the nonsense National Insurance rise and the energy price crisis. Most [of it] will have to be passed on, otherwise thousands of businesses will go down the drain with hundreds of thousands of jobs.”

Simon Emeny, chief executive of Fullers, added: “There are things the Government can control and things it can’t control, but this hike is actually one of the few levers left and it is not something they have to do.

“If this country is going to make a full recovery from Covid we need to get people spending money and generating tax revenue. So I think deferring that increase is actually critical.”

Richard Walker, the chief executive of food retailer Iceland, said the NI rise “was coming at the same time as a load of other pressures”.

Other critics of the tax increase include the former Cabinet minister Robert Jenrick, who said delay would be “most sensible and prudent thing the Government could do right now” as inflation climbs towards fresh 30-year highs.

According to insolvency practitioner Begbies Traynor’s quarterly red flag report, almost 600,000 businesses are facing “significant financial distress” as Covid support packages are wound up and companies are left with pandemic debts.

Kitty Ussher, chief economist at the Institute of Directors, said the raid “couldn’t really be worse timing for businesses” with many as four in ten of its 20,000 members raising prices for customers.

She said: “Firms are already struggling to recruit and other costs are rocketing.”

Shevaun Haviland, director General of the British Chambers of Commerce, added: “I am really concerned that if this tax increase is not postponed, we will see a stranglehold put on the economic recovery just when it needs to be powering up.”