'It's destroying jobs': SNP slam Labour NIC hike as businesses shed jobs
'THE Labour Party's national insurance tax hike is destroying jobs, squeezing wages and choking off economic growth," the SNP has said after figures today show the number of people on payrolls fell by 55,000 between March and April this year.
The figures, published by the Office for National Statistics (ONS) today, forecast the number is to drop by a further 109,000 in May.
Deputy First Minister Kate Forbes said the figures showed "Scotland's labour market remains resilient despite global challenges impacting the economy", with the median monthly pay of payrolled employees in Scotland higher than the UK overall.
Responding to the figures, Liz McKeown, director of economic statistics at the ONS said: "Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on'.
Yael Selfin, chief economist at KPMG UK also warned: "It is likely that businesses will look to offset some of the rise in employment costs through a combination of reducing headcount and slowing hiring activity. Given this, we expect the unemployment rate to edge higher over the coming year".
READ MORE: UK Government pledges 'multi-decade, multi-billion' renovation of Clyde nuclear base
Ruth Gregory, deputy chief UK economist at Capital Economics said "most indicators show labour demand is clearly weakening."
The SNP have pointed towards Rachel Reeves's UK Budget last October, where she said that employers' NICs would rise from 13.8% to 15% on a worker's earnings above £175. The changes will kick in from April 1, the same day by which the Scottish Government must have passed its Budget legislation.
As the tax rises were levied on employers – in order to allow Labour to claim they had not technically raised taxes on working people – Scotland's local authorities and public service providers also face cost increases.
SNP deputy Westminster leader Pete Wishart MP said: 'The Labour Party's national insurance tax hike is destroying jobs, squeezing wages and choking off economic growth - with unemployment rising to a four year high as businesses and public services grapple with the increased costs of hiring employees under Keir Starmer's government.
READ MORE: 'Resign if you disagree so much', Labour tell civil servants raising Israel concerns
'The Chancellor must use the UK spending review tomorrow to scrap her damaging jobs tax hike - and implement measures that support small and medium businesses, public services and charities to create jobs and boost incomes - rather than forcing them to cut jobs and wages.
'Voters were promised things would get better but under the Labour government unemployment is rising, the cost of living is sky high, and the economy is moving in the wrong direction, with growth down, borrowing up, and public finances in a worse position than when Rachel Reeves entered Downing Street.
'The SNP repeatedly warned about the damage Labour Party's job tax would do. Scottish businesses need support not punishing tax hikes from Westminster. Unlike Keir Starmer, the SNP will always stand up for Scotland and support our small and medium businesses to grow and benefit our communities.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
31 minutes ago
- CNBC
Here are the winners and losers as the UK unveils spending plans
U.K. Chancellor Rachel Reeves is delivering the government's Spending Review on Wednesday, all eyes on how billions of pounds' worth of public money are split between departments and infrastructure projects. We already know that "protected departments" such as health and defense will see big funding boosts — but losers could surface among "unprotected" units. Departments like the Home Office and those overseeing local government and the environment could see their budgets squeezed as the government targets cost cutting. The review covers two separate avenues of spending: resource expenses — the government's day-to-day running and administration costs — for the next three years, as well as capital expenditure for the next four years, which goes toward improving infrastructure and public services such as new roads, hospitals and military equipment. The Treasury has already said that day-to-day spending will rise by an average of 1.2% for each of the three years while investment (capital) spending will increase by an average of 1.3% a year for four years. That "relatively modest" hike in day-to-day and investment spending means "sharp trade-offs are unavoidable," the Institute for Fiscal Studies (IFS) think tank warned ahead of the review. We've already had a raft of announcements from the government in the run-up to Wednesday's spending announcement, detailing some of the money government departments will receive, ranging from science and housing investment to defense and education. Here's a quick lowdown of what we already know: The government has already announced that defense spending is set to rise from 2.3% of gross domestic product (GDP) to 2.5% by 2027, with the boost funded partly by cuts to the overseas aid budget. The U.K.'s defense plans include building 12 new nuclear-powered attack submarines, a boost to the manufacturing of drone, missiles and munitions, as well as bolstering of cyber warfare capabilities. After defense, the health service is also set to get a big funding boost as one of the government's main spending priorities although we're waiting to see the extent of the funding boost the Department for Health receives. The Treasury has already previewed several largescale infrastructure investments in the run-up to the Wednesday announcement, saying it will allocate £86 billion to fund research and development in the science and tech industries over the next four years, with the aim of boosting growth and innovation. That money will fund research ranging from "new drug treatments and longer lasting batteries to new AI breakthroughs," the government said. The Treasury on Tuesday night announced that Rachel Reeves will unveil a £39 billion boost to social and affordable housing investment in the spending review. Access to state-subsidized social housing, or low-cost new homes, is a particular bugbear for many voters struggling to find affordable places to live. Free school meals in schools will be expanded to more than 500,000 children whose parents receive a welfare payment known as Universal Credit, which is available to those who are on a low income, unemployed or unable to work. Previously, children outside of London were only been eligible for free school meals if their household income was less than £7,400 per year. Transport networks outside of the capital London will get a funding boost of £15.6 billion, focusing on the North and Midlands areas of the country. The government has said it will invest just over £14 billion in building new nuclear power station, Sizewell C as well as smaller modular reactors. It noted the move would create 10,000 jobs and "deliver clean power to millions of homes, cut energy bills and boost energy security." The Spending Review is not a fiscal event, meaning there will be no announcements on taxation, borrowing or spending on Wednesday. Last fall, the government set out its budget and fiscal policies for the year ahead, with Reeves unveiling larger public spending, tax rises and changes to fiscal rules to allow her to borrow for longer-term investment. We know that Reeves is looking to keep to "fiscal rules" set out last fall in her Autumn Budget, however. She also wants day-to-day spending to be funded by tax receipts rather than by borrowing — leaving herself around £9.9 billion worth of "fiscal headroom" to hit that target — and for debt to fall as a share of U.K. gross domestic product, by 2029/30. Those tight fiscal rules have given Reeves little in the way of a financial buffer if U.K. borrowing costs rise to the levels we saw at the start of the year, or if economic growth falters. Economists expect there to further tax rises to be announced in the next Autumn Budget.
Yahoo
41 minutes ago
- Yahoo
The world is laughing at Britain, and only Starmer hasn't noticed
So finally, Labour's policies are resulting in tax cuts, and the Laffer Curve is back in fashion. At last, people are going to keep more of their hard-earned money, a big chunk of the national debt will be paid off and, to cap it all, minimum salaries are going to be raised and VAT on food will be reduced. Yes, the people of Mauritius sure have done well out of the Chagos deal. That £30 billion windfall, all paid for by the British taxpayer, is going to be put to excellent economy-boosting use. And who can blame them for celebrating? Their government has played an absolute blinder. Of course, we could get all picky and start asking awkward questions about why the Chagos Islands should be surrendered at all, least of all to an African country more than a thousand miles across the Indian Ocean. But that would be to rain on the Mauritian parade. It's their day and their victory, and while it was against abject, third-rate opposition, we mustn't carp. There's nothing worse than a bad loser. But we are within our rights, I reckon, to ask why good things always happen to other people. What are the chances of us British being gifted £30 billion from another country, plus a brand-new territory to paint pink on maps? I'm trying to think of an equivalent. Perhaps Spain paying us to take Tenerife off its hands, and throwing in the Women's World Cup as a juicy extra? But we British are the baddies, so we must always pay for our sins. Some international court has told us exactly that, and under the Government we elected last summer, that's final. Never mind the humiliation, the terrifying security considerations and the almighty cost. And what about the Chagossians themselves, who have been treated disgracefully throughout? Oh, sod 'em. This is the Starmer way. And hunker down, because we've got at least four more years of it. Are you happy now, you Tories who preferred to stay at home last July rather than strolling to the polling station? Ever think you might have been conned by all those bright red 'Change' placards behind Sir Keir? Well, at least when Rachel Reeves breaks yet more promises and raises our taxes in her budget this autumn, and when she comes up with yet more tripe about black holes, working people, a changing world and fixing foundations, we'll know that the rest of the world is having a darn good laugh at our expense. Yes, we are the butt of a hilarious joke by a mocking Mauritian government. And we can't complain. A baddy always gets a comeuppance in the end. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
San Francisco Chronicle
an hour ago
- San Francisco Chronicle
UK government hopes to regain political initiative as Treasury chief outlines spending plans
LONDON (AP) — Britain's Labour government hopes to regain the political initiative Wednesday when Treasury chief Rachel Reeves sets out her spending plans for the coming years, with big increases expected for health, defense and housing. Reeves, who has been blamed by many for Labour's decline in popularity since it returned to power after 14 years in July, will outline the government's spending and investment priorities for lawmakers. There will be no tax announcements. Reeves is expected to argue the government is on the path to 'renewing Britain' but that 'too many people in too many parts of the country are yet to feel it,' according to remarks issued by the Treasury. 'This government's task — my task — and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, their jobs, their communities," she is expected to tell lawmakers. Labour won a landslide victory last year on a slogan of 'change' and voter anger at the Conservative administration in power at the time, but its vote share was historically low for a winning party at 35%. In the months since, Labour has been overtaken in opinion polls by the anti-immigration and recently formed Reform U.K. Reeves has been blamed by many for Labour's struggles, not least her decision in July to withdraw a winter fuel subsidy to all but the poorest retirees. The outcry, which contributed to Labour's poor performance in recent local elections, prompted Reeves to about-turn and raise the threshold at which retirees will get the subsidy. She and Prime Minister Keir Starmer will hope the change will stem the anger and focus voters on other issues, such as its spending priorities. Among the main announcements is expected to be a 30 billion-pound ($41 billion) increase in funding for Britain's cherished but struggling National Health Service, as well as a rise in defense spending that will account for 2.5% of national output by 2027. Billions more are expected for social housing as the government aims to meet its target of building 1.5 million new homes by the next election. However, some departments are set to lose out after accounting for inflation, including local government, the justice system and the Home Office. Reeves has insisted she won't go on a big splurge, arguing that all her spending plans will meet her self-imposed fiscal rules.
