National Insurance

First Minister’s Question Time – in the Scottish Parliament at on 7 November 2024.

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Photo of Audrey Nicoll Audrey Nicoll Scottish National Party

The Labour United Kingdom Government’s decision to increase national insurance contributions could have a substantial financial impact on Scotland’s public sector, potentially costing our public services hundreds of millions of pounds, and on the third sector, costing as much as £75 million. [Interruption.]

Photo of Audrey Nicoll Audrey Nicoll Scottish National Party

It is vital that the UK Government provides clarity as a priority about whether Scotland will receive additional funding to cover the cost of the tax rise. Will the First Minister provide an update on the Scottish Government’s latest engagement with the UK Government in that regard?

Photo of John Swinney John Swinney Scottish National Party

The finance secretary has written to the Chancellor of the Exchequer on this important issue, because we need clarity for our own budgeting purposes about what compensatory effects will be allocated to public funds to deal with the increased costs that will arise from the increase in the employers’ national insurance contribution. That will apply to clearly identifiable public service organisations, but there is also a question about whether it will apply to organisations that are not classified as being in the public sector but provide public services, such as care providers, third sector organisations or, further afield, universities and colleges into the bargain.

There is significant uncertainty about whether that will be adequately and properly covered in the budget, and that will be the subject of detailed discussions between the Scottish Government and the UK Government as we proceed with our budget steps.