A MAJOR Scottish charity has pointed to the Labour Government’s tax rises after closing down a “crucial” service.
Chancellor Rachel Reeves announced in her October Budget that employer contributions to National Insurance would rise by 1.2% to 15%, while the threshold at which it is paid has also been reduced.
The move has been criticised as a tax on workers – which Labour pledged not to implement – as experts say it will push down wage growth, wider economic growth, and stop businesses creating new jobs.
Epilepsy Scotland chief executive Lesslie Young told The Daily Record that the UK Government’s decision was forcing charities like hers to close down services.
“It’s the straw breaking the camel’s back,” Young said.
“Amid a long-term funding crisis in the third sector, the Chancellor’s rise in Employers’ National Insurance Contributions is forcing charities like ours to shut down life-saving initiatives.”
The Epilepsy Scotland chief went on: “The need for money for life-saving charities and their projects outweighs its availability by an order of magnitude.
“In our case, the Aberdeen support group has played a crucial role in supporting individuals living with epilepsy by providing a welcoming space for peer support.
“With 20 members, the group meets twice a month to host social events. The group has expanded beyond the city, reaching rural communities in Aberdeenshire, with some attendees travelling up to two hours to participate."
Young called for a “rethink” on the hike in employers’ National Insurance contributions, which came into effect on April 6.
It comes after Scotland’s Finance Secretary Shona Robison called the increase “inexplicable” if Labour ministers want to increase growth – which is their first priority in government.
UK ministers have set aside £4.7 billion to compensate the public sector in England to cover increases, with Scotland likely to see a population share of the funding through the Barnett formula.
Robison said: “The UK Government’s national insurance hike is bad for our public services and bad for business.
“The UK Government is short-changing the Scottish Government’s funding for vital services like the NHS and putting business at a disadvantage with this tax on jobs.
“Given that UK Government ministers claim their number one priority is driving economic growth, it is inexplicable that they would take a decision that will impact employers in this way.
“The Chancellor is also yet to confirm the additional funding we have been promised to mitigate employer national insurance contributions in the public sector, despite the new financial year starting and the policy coming into effect.
“It is estimated that there will be a £400 million public sector funding shortfall and this will have wide-reaching consequences on the services people across Scotland rely on.”
