To ask the Scottish Executive what estimates have been made of the impact on the Scottish economy of the Chancellor of the Exchequer’s decision to continue with the increase in employers’ national insurance contributions by 0.5% from 2011 and how much this is expected to remove from the Scottish economy.
The UK Government’s plans will increase the overall UK tax burden by £18 billion in 2011-12. This includes increasing both employee and employer national insurance contribution rates by 1%. Whilst the impact on employers will be partly offset by the accompanying increase in the employer national insurance threshold, the rise is still projected to cost the Scottish public sector £50 million next year. By raising staff costs for firms across Scotland the higher contribution rate could threaten jobs at a time when the Scottish labour market and the economic recovery remain fragile.