Danger Tax Rise Could Lead to Pay Cuts & Job Losses
Angus MP and SNP Economy Spokesperson, Dave Doogan, has written to the Chancellor calling for the publication of “a full impact assessment of any National Insurance hike on small businesses, and the jobs and pay of millions of workers“, following growing speculation that the Labour Party will increase National Insurance taxes at the UK budget.
Mr Doogan warned that “there is a very real danger it could lead to pay cuts for thousands of Scottish workers, fewer jobs and even redundancies“, and said the Chancellor “must be certain that jobs won’t be lost, and the wages of workers won’t be squeezed, as a result of Labour’s tax hikes”.
It comes amid growing concerns from businesses that the Labour Party is planning to increase taxes that could impact on jobs and investment.
The quarterly economic indicator report from the Scottish Chambers of Commerce (SCC), published on Tuesday, found 55% of businesses said they had concerns over taxation.
Douglas Smith, vice president of the SCC, said “General business confidence is uncertain given recent government rhetoric on how painful this budget will be and taxation is a significant concern. How this will impact business and employees is a huge worry and the lack of clarity has stalled investment and undermined confidence.”
This Labour UK Government promised change but, on top of its continuation of harmful austerity, risks making people worse off through an ill-considered National Insurance hike.
GRAEME
They need to demonstrate that this move would not hit people’s jobs and wages.
The raising of National Insurance would also mean yet another broken pledge from Labour, but it is getting near impossible to keep track of all these.
They need to be transparent with the public – something they were not with the electorate.
Background
Dave Doogan MP’s letter in full:
Dear Chancellor,
I am writing to you following growing speculation that the Labour Party is planning to increase National Insurance taxes at the UK budget on 30th October.
The Labour Party must tread very carefully if it is planning to hike National Insurance taxes on thousands of small and medium-sized Scottish businesses. There is a very real danger it could lead to squeezed pay for thousands of Scottish workers, fewer jobs and even redundancies.
Ultimately, National Insurance is a tax on jobs and pay, and the level it is set at must be carefully considered based on the evidence of its impact. Raising it would break yet another Labour Party election pledge and pile pressure onto those Scottish businesses with tight margins.
While Sir Keir Starmer has claimed this Labour Party jobs tax will not hit workers, there are serious warnings that some businesses could be forced to squeeze or freeze pay, cut back on pension contributions, halt recruitment or lay off workers – if the added cost is too much to absorb.
There may be employers who end up saying to workers “we can’t afford to give you a pay increase because of the Labour government’s tax hikes”.
This whole sorry mess once again speaks to the lack of candour from the Labour Party during the UK general election campaign. You promised voters austerity would end under Labour but instead you have imposed billions of pounds of cuts to pensioners and public services – and now you are breaking your promise on hiking National Insurance too.
Voters feel misled. They were promised change but instead they have been
short-changed by the Labour Party.
The Labour government must publish a full impact assessment of any National Insurance hike on small and medium-sized businesses, and the jobs and pay of millions of workers – and be certain that workers won’t lose out if the Labour Party goes ahead with this tax rise.
You must be certain that jobs won’t be lost, and the wages of workers won’t be squeezed, as a result of Labour’s tax hikes.
I hope you will agree to this request and publish a full impact assessment on Scottish businesses, and the jobs and pay of Scottish workers, ahead of the Budget.
Yours for Scotland,
Dave Doogan MP
SNP Economy Spokesperson
