Rising unemployment and worsening labour marketing highlights the need to scrap the planned increase in National Insurance contributions, according to the British Chambers of Commerce (BCC).

Commenting on the announcement on Wednesday that unemployment has reached 2.4 million in the UK, David Kern, chief economist at the BCC, said: "Although the rise in unemployment was not as large as some had feared, there has been a worse than expected decline in the level of employment. If there had not been a steep rise in the number of economically inactive people - those not in employment or claiming benefit - the increase in unemployment would have been much worse."

The Government has planned a 0.5% increase on employers' National Insurance contributions. But HR magazine reported in March that 94% small and medium-sized enterprises believe the hike will discourage them from employing.

Kern added: "Even if the economy starts growing later this year, it is unlikely unemployment will continue rising at a rapid pace. There is still a realistic chance the jobless total will exceed three million next year and it is important for the Government to address this. The planned increase in National Insurance contributions will slow a recovery in the jobs market and must be scrapped.