Rachel Reeves faces legal action from care homes over her national insurance raid. Private providers are set to launch a judicial review in a bid to be exempted from the Chancellor's hike on employer's contributions.

They have warned that the controversial increase, which comes into force today, will cause care homes and the NHS to "crumble" Prof Martin Green, chief executive of Care England, the industry body for private care homes in the UK, told The Telegraph: “This judicial review marks a critical moment for adult social care.

“The decision to increase national insurance contributions without exempting the care sector is a political signal that social care remains an afterthought.

“Successive governments have reinforced a damaging divide between the NHS and social care through policy, legislation and funding.

“But the reality is clear – when social care crumbles, the NHS follows.”

Under the changes announced at the autumn budget, the rate of employer national insurance contributions will go up by 1.2 percentage points from 13.8% to 15%.

The payments will also start when an employee earns £5,000, down from the previous level of £9,100.

The tax increase comes as businesses are also dealing with an 6.7% rise in the minimum wage which came into force last week.

A government spokesman said: “This Government delivered a once-in-a-Parliament Budget that took necessary decisions on tax to stabilise the public finances, including the NHS which has now seen waiting lists fall five months in a row.”