Scottish Labour MPs are facing mounting pressure to oppose Keir Starmer’s National Insurance tax hike as concerns grow over its devastating impact on public services.
The SNP has called on Labour MPs to demand full compensation from the UK government for the shortfall Scotland’s public sector faces as a result of the increase.
First Minister John Swinney and COSLA President Shona Morrison have jointly written to Chancellor Rachel Reeves, warning that current funding plans are woefully inadequate.
Their letter highlights a potential £700 million hit to Scotland’s public sector, with an additional £75 million burden on charities.
The UK government’s proposed compensation of up to £350 million leaves a gaping shortfall, jeopardising frontline services.
This comes as the British Chambers of Commerce (BCC) sounded the alarm over declining business confidence in the wake of the tax hike.
A BCC survey of over 4,800 businesses revealed a sharp drop in confidence, with two-thirds expressing concerns over rising taxes.
More than half of the businesses surveyed plan to increase prices, further straining household budgets amid a cost-of-living crisis.
BCC Director General Shevaun Haviland warned that the National Insurance rise is forcing firms to cut investment and push up prices.
“Businesses of all sizes are feeling the squeeze,” Haviland said, urging the UK government to rethink its strategy.
SNP Economy spokesperson Dave Doogan MP criticised Labour MPs for failing to protect Scotland’s interests.
He accused them of breaking election promises and rubber-stamping damaging policies that threaten vital services like the NHS, schools, and care homes.
“Labour MPs in Scotland promised change but have delivered only cuts and higher taxes,” Doogan said.
The SNP’s stance is backed by a coalition of 48 public and third-sector organisations, including trade unions and charities.
These groups have warned that the tax hike will have a lasting impact on Scotland’s ability to deliver essential services.
Doogan called on Scottish Labour MPs to join the fight for full compensation and stop “making excuses” for their party leader.
With a House of Commons debate scheduled, the issue has become a political flashpoint, exposing deep divisions within Scotland’s political landscape.
Critics argue that the National Insurance hike disproportionately affects Scotland, further exacerbating existing inequalities.
The SNP is urging voters to hold Labour MPs accountable for policies that threaten to strip hundreds of millions from vital services.
Scotland’s public sector cannot afford to lose out, and the clock is ticking for Labour MPs to act.
As the debate unfolds, all eyes will be on Scottish Labour to see if they stand up for Scotland or continue to toe the party line.
