A major warning has been fired at Labour by the SNP over the party’s decision to hike employers’ national insurance contributions.
The so-called jobs tax, coming into force, is being branded a “catastrophic error” as the global economy enters a period of heightened volatility.
SNP Westminster leader Stephen Flynn says the move could trigger a “Reeves Recession” if the Chancellor refuses to change course.
The announcement comes just as US-imposed Trump tariffs start to bite, threatening a new wave of trade disruption.
Flynn has called it “the worst possible economic policy at the worst possible time”.
New figures from the House of Commons Library show just how reliant Scotland is on exports to the US.
In 2024, £4 billion worth of Scottish goods were exported across the Atlantic, making up 12.3% of all Scottish goods exports.
Salmon alone accounted for £225 million of that, with America ranking as the second most important market after France.
Scottish fish exports to the US were worth £139 million, making up 3.5% of all US-bound exports and over 11% of total fish exports from Scotland.
Scotch whisky also remains a giant in the export economy, with nearly £1 billion flowing to the US in 2024.
Altogether, food, feed and drink exports to the US were valued at £1.2 billion, nearly a third of all Scottish goods exports to America.
Flynn argues that these sectors are now at serious risk from both external tariffs and internal taxation.
With global conditions shifting fast, calls are growing for Labour’s fiscal rules to be abandoned to protect the economy.
Andy Haldane, former Chief Economist at the Bank of England, has added weight to that argument.
He warns that rigid fiscal rules threaten underinvestment and long-term economic decline.
He says they “dent growth, weaken macroeconomic resilience and amplify the doom loop”.
Flynn insists it’s time for Labour to stop clinging to “austerity-era dogma” and start backing growth.
He says the Chancellor’s refusal to show flexibility will only deepen economic woes and cost jobs.
Flynn also criticised Labour’s habit of using the phrase “the world has changed” while sticking to old Tory rulebooks.
He argues that real change means loosening the rules, not tightening the screw on workers and employers.
Scrapping the national insurance hike, Flynn says, would be the first real step towards a smarter strategy.
Otherwise, Labour risks overseeing the very kind of recession it promised to avoid.
He says the choice is clear – invest in growth or sabotage it.
