A Labour raid on national insurance contributions for employers would risk jobs and investment in the UK, business leaders have warned.

The intervention comes after Business Secretary Jonathan Reynolds hinted the Government could hike the levy on employers in the Budget on October 30.

He insisted Labour’s manifesto commitment not to raise the tax applies to employees but would not say the same for employers.

Charlie Nunn, the Lloyds Bank chief executive, said national insurance would be one of the “worst taxes” to increase because it would be a “handbrake” on investment by making it more expensive for businesses to hire staff.

He told The Telegraph: “Anything that helps people continue to invest and take appropriate risk, we think, is really important. Anything that does the opposite would be a handbrake.”

Kate Nicholls, the chief executive of UK Hospitality, added: “This is a tax on jobs. An increase in NICs makes it harder to employ people and to take a risk on recruitment and expansion, because the costs of it will be so much higher.”

Shadow work and pensions secretary Mel Stride said it would be “absurdity” for Labour to argue that raising employers’ NI is not a breach of their manifesto commitments.

Mr Stride told Sky News’ Sunday Morning With Trevor Phillips that Labour “boxed themselves in” by “claiming they were not going to be a party that was going to have to put up taxes”.

He said: “That leaves you with a narrow field of taxes now to go for. I think if they go for employers’ national insurance, firstly, it’s a very bad tax to raise, because it’s a tax on jobs and what they should be about is growth and increasing productivity in the economy.

“The second thing is, I think it goes totally counter to their manifesto that assured us they would not be putting up national insurance.

“So unless they’re to argue that employers’ national insurance is not the same thing as national insurance, which is an absurdity to argue, then they’re going to be breaching their manifesto commitment.”

Mr Stride went on to describe the Government’s claims about a £22 billion black hole in public finances as “fictitious”.

On Labour’s manifesto promise not to raise national insurance, Mr Reynolds said: “That pledge, it was taxes on working people, so it was specifically in the manifesto, a reference to employees and to income tax.”

Employers pay national insurance of up to 13.8% on employee earnings but salary paid into a pension is tax-free.

Recent research by the Resolution Foundation think tank found that levying national insurance on employer pension contributions at 13.8% would raise up to £18 billion a year by the end of the decade.