Burnham urged to reverse national insurance rise costing firms £1,000 per worker

The Chancellor’s decision to raise employers’ national insurance is costing the average business more than £1,000 per worker every year, figures show.

For those on the real living wage, which amounts to a full-time salary of about £26,228 a year, employers are paying an average of £890 extra in tax a year, according to analysis by the Scottish Parliament Information Centre (SPICe).

The figure rises to £1,053 for those earning the Scottish median wage of £39,879.

The SNP, which commissioned the analysis, called for Andy Burnham, who is expected to become prime minister later this month, to reverse the employers’ national insurance rise.

Chancellor Rachel Reeves raised the rate of national insurance, and lowered the tax’s starting threshold, in 2024 after Labour won a landslide election.

SNP MSP Laura Mitchell said: “Andy Burnham must, as a priority, scrap the Labour Party’s national insurance tax hike, which has destroyed jobs and cost Scotland’s businesses huge sums of money.

“This was an incredibly short-sighted Labour Government policy which has created a high-cost, toxic environment for businesses across Scotland and the UK – cutting jobs, squeezing wages, reducing investment and choking off economic growth.

“Analysis now shows that this policy is costing business in Scotland around £1,000 per employee – is it any wonder why employment is up and fewer vacancies are opening. That is the cost of Westminster.

“Westminster policies have wiped billions of pounds from Scotland’s economy, causing unemployment and the cost of living to soar.

“It’s clear Scotland needs the full powers of independence so we can build a stronger economy and a better future.”

A spokesperson for Mr Burnham said: “Andy is focused on delivering good growth in every postcode, raising living standards and giving families breathing space by tackling rising costs. On tax, he is committed to the manifesto.”