Less than a fortnight on from the UK Labour Government’s first budget, their ill-considered decision to raise National Insurance (NI) contributions for employers is set to have significant consequences across the country.
Last Week the Scottish Parliament’s Finance and Public Administration Committee concluded that 75% of the NI increase’s impact would fall on employees, primarily the low-paid, whilst 25% would lead to reduced investment and employment.
As well as the direct impact on the public sector in Scotland, GPs, social care providers, and universities are all facing multi-million-pound increases to their costs.
Labour’s tax hike is estimated to cost:
• £275 million for Scotland’s councils according to the Convention of Scottish Local Authorities.
• £75 million for the voluntary sector according to the Scottish Council for Voluntary Organisations.
• £45 million for universities according to Universities Scotland.
Additionally, the Institute of General Practice Management has estimated the average GP Practice across the UK will see their tax bill rise by approximately £20,000 a year due to these changes.
The Coalition of Care and Support Providers in Scotland said the tax hike had caused “panic” and would be “catastrophic” for its members unless compensation or exemptions were provided.
These are frontline organisations delivering key services to people across Scotland.
As it stands, these tax hikes would have a potentially devastating impact on them.
Whether it’s a hardworking charity, your local GP or a care provider, it is fundamentally unjust for Labour to seek to balance its budget off their backs.
The new Labour Government must commit to covering these costs in full.
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