LABOUR are risking a “Reeves Recession” if they fail to reverse the National Insurance hike amid Donald Trump’s tariffs, the SNP have said.
The US levies would impose a 10% import tax on British goods entering America, and are set to cause a devastating economic impact.
The SNP’s Westminster leader, Stephen Flynn, said the UK Government should not follow the US’s “act of economic vandalism” with “another one here at home”.
Employers are set for a £25 billion increase in National Insurance Contributions (NICs) from April 6.
The SNP said the tax on jobs is “the worst possible economic policy at the worst possible time”.
Figures from the House of Commons Library, commissioned by the party, found that several Scottish industries will be impacted by the imposition of US tariffs.
Scottish salmon exports were worth £225 million in 2024, out of a total of £844m, making the US the second most important destination for Scottish salmon after France.
Elsewhere, Scottish whisky exports in 2024 were worth £971m, 18.0% of all Scotch whisky exports.
In total, Scotland’s food, feed and drinks exports to the USA were worth £1.2bn.
Flynn (below) said: “The Chancellor needs to rethink and rapidly reverse imposing this damaging jobs tax at the very same moment that businesses are being hit by Trump tariffs - if they fail to do so, the Labour Party will be choosing to inflict the worst possible economic policy at the worst possible time.
“One act of economic vandalism imposed from across the Atlantic shouldn’t be followed up with another one here at home. If the Chancellor fails to rapidly reverse this jobs tax, then Labour will be directly responsible for risking a Reeves Recession.
“As a global economic storm gathers, the Labour Party’s current plan seems to boil down to a return of austerity cuts alongside the risk of a recession.
“Instead of doubling down on a failed plan that isn’t working - a plan that will destroy jobs, reduce investment and squeeze workers’ wages - now is the moment for Labour to admit their own failure and to stop pursuing policies that will make things even worse.”
Flynn urged the Chancellor to remove the self-imposed “straitjacket of Tory fiscal rules”.
“That would allow the fiscal flexibility to end austerity cuts and provide the fiscal firepower needed to seriously invest in growth,” he added.
“It’s time for the Chancellor to stop being paralysed in policies that have failed to generate the growth Labour promised. That only begins by scrapping a Labour jobs tax that risks recession, will damage businesses and will force thousands into unemployment.”
It comes as economies around the world reeled from Trump’s tariff plan.
Number 10 contradicted the US president’s claim on Thursday that the Prime Minister was “very happy” about the imposition of a 10% import tax on British goods entering America.
Asked on Friday whether that characterisation was accurate, a Downing Street spokesman said: “We’re disappointed by the tariffs that have been brought in.
“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally, but both the Prime Minister and the Business Secretary have been very clear over the last 24 hours that we will continue to act in the best interests of the UK, and we’re prepared to do so.”
Elsewhere, Foreign Secretary David Lammy (above) said he regretted the “return to protectionism” in the US.
He said all options remain on the table to respond in the national interest, but that the UK’s immediate focus was on negotiating an economic agreement with Washington.
