A warning has been issued over the impact of rising employer National Insurance contributions, with fears it could stall economic growth and drive up prices.
Employment and Investment Minister Tom Arthur has urged the UK Government to reconsider its hike before it inflicts lasting damage on Scotland’s economy.
The increase to 15% is expected to cost businesses an average of £850 per employee, placing additional strain on employers, charities, and public sector bodies.
With businesses already facing significant financial pressures, Mr Arthur warned the policy would act as a brake on employment and investment.
Speaking ahead of a parliamentary debate, he highlighted how the additional burden is undermining efforts to attract business and stimulate economic growth.
He stated that Scottish businesses are now being forced into impossible decisions, including job cuts, reduced hours, lower wages, or passing costs onto consumers.
These increased costs will ultimately hit employees’ pay packets while also driving up prices for customers.
The First Minister has already outlined a plan for economic growth in his Programme for Government, with a focus on key areas like offshore wind supply chains.
Yet despite these efforts, businesses are now being hampered by what Mr Arthur described as a ‘tax on jobs.’
He insisted that if the UK Government is serious about economic growth, it must reverse the decision before the damage becomes permanent.
With rising costs already squeezing businesses and households alike, the call for urgent action is growing louder.
As firms navigate difficult financial decisions, many fear that without intervention, the consequences will be widespread job losses and weakened economic stability.
