BUSINESS owners said the government is "giving with one hand and taking with another" following the Budget, with minimum wage and national insurance contributions to rise.

Multiple small business owners in Darlington said they believe they will be negatively affected.

In the first Labour budget in 14 years, Chancellor Rachel Reeves confirmed that the rate of employers’ national insurance (NI) will rise by 1.2 percentage points, from 13.8 per cent to 15 per cent from April next year.

The secondary threshold – meaning the level at which employers start paying the tax on each employee’s salary – will also be reduced from £9,100 a year to £5,000.

Ms Reeves said the measure would raise £25bn per year until the end of its forecast period.

Businesses will also bear the brunt of a 6.7 per cent increase in the national minimum wage to £12.21 an hour next year.

Ms Reeves also announced that the small business multiplier – a tax rate used to calculate bills for non-domestic properties – will be frozen for a further year. This will save the average shop about £11,000, according to the commercial real estate intelligence firm Altus Group

For small businesses across Darlington, the Budget has not gone down well.

Aimee and Richard Bland, aged 39 and 45, have been based at Queen Street Shopping Centre for two years running their play café CuriosiTeas. The pair recently revealed their struggle to stay open as the cost of living crisis saw them receive a £10,000 electricity bill.

"From our point of view, this is just another nail in the coffin," said Richard. "This is another justification for us to shut up shop and walk away. There are no incentives for small businesses like ours to carry on.

"The government just doesn't seem to buy into small businesses at all. What's the point in running a business?"

Rosann Sanderson, 29, who owns Bobby B's Baby Boutique on Bondgate, said: "If we didn't benefit from business rates, I don't think we or others would survive around here. People can't afford to pay full rates any more. I'd question whether it was worth going on.

"I think the minimum wage going up is good but I believe the only reason they are doing it is so people will be paying more tax. They are giving it with one hand and taking it out with another."

Business owners Lorraine and Alistair Dunn, 71 and 73, have only been based at their unit, Woodland Creations for three weeks. They were planning on taking on new staff next year, but said the Budget may force them to re-think.

Alistair said: "I believe that they are going against what they promised. I am ashamed to say I voted for Labour. These increases are going to really hit small businesses and us, the employer.

"It's going to impact hotels and restaurants, people who have multiple staff. They will shut down because they cannot afford national insurance. It is going to make us think: do we continue? Are we going to have to manage on our own and not take on staff?"

Lola McEvoy, Labour MP for Darlington, defended the measures. She said: "The Tories’ £22bn black hole has left us with some tough decisions to ensure the much-needed investment in our NHS and public services and get Britain back on the path to prosperity.

"However, by more than doubling the Employment Allowance we have taken action to ensure that the smallest businesses are protected and those with the broadest shoulders bear the largest burden.

"As a result of these changes, 850,000 employers will not pay any national insurance contributions whatsoever next year, and over one million will pay the same or less than they did previously."

Meanwhile Rachel Anderson, assistant director of policy at the North East Chamber of Commerce, said: “In a number of crucial areas for North East business and employers the government has listened to our collective calls for a stronger, fairer region, including on skills, infrastructure and the national framework for investment.

“The employers’ National Insurance rise will be difficult for businesses, especially against the backdrop of increases in national minimum wage. We do however welcome the Chancellor’s increase in employment allowance, which will help many of our smaller businesses.”