National Insurance contributions for employers in Scotland are set to rise to 15% from April, a move that could have significant consequences for businesses across the country. The Scottish Government has estimated that the increase will cost businesses an average of £850 per employee. This rise in National Insurance contributions has sparked concern, particularly within the charity sector and public services, with warnings that the hike could severely impact their budgets, according to the National.
Health Secretary Neil Gray has voiced alarm about the potential consequences of this increase, describing it as “catastrophic” for public services. Gray went further, calling the hike the “greatest risk” to the public sector in 2025. His comments highlight the fears that the rise in National Insurance could lead to job cuts, reduced services, and increased financial strain on the sectors that are already under pressure.
The issue was discussed in a debate at Holyrood, where Members of the Scottish Parliament (MSPs) considered a motion tabled by Employment Minister Tom Arthur. The motion raised concerns about the “adverse impacts” the policy could have on Scotland’s businesses, charities, public services, and the broader economy. Arthur emphasized that the hike could harm Scotland’s economic recovery as businesses struggle with the increased financial burden.
The motion was passed with strong support, with 93 votes in favor, 20 votes against, and seven abstentions. Amendments proposed by Scottish Labour and the Scottish Tories to alter the proposal were both rejected. The vote in favor of the motion underscores the widespread concern about the potential damage the National Insurance increase could cause to Scotland’s economy and public services.
Critics of the rise argue that while the policy aims to increase funding for public services, it will have unintended consequences, particularly for charities and small businesses that may struggle to absorb the increased costs. The Scottish Government has been urged to reconsider the timing and scope of the hike, with some calling for targeted support to mitigate the impact on the most vulnerable sectors of the economy. As the April deadline approaches, the debate over the rise in National Insurance contributions is expected to intensify, with businesses and public service leaders calling for urgent action.
