The public will pay for Labour’s budget through food price rises, the SNP has said. The party’s economy spokesperson Dave Doogan said the measures announced by Chancellor Rachel Reeves are set to “make the cost of living crisis even worse”.
It comes as supermarket giant Sainsbury’s claimed the employers’ National Insurance rise coupled with inheritance tax on farms will cause the cost of food to soar for customers.
The supermarket’s chief executive Simon Roberts said there is “already too much pressure in the pipe” for the firm to absorb an unexpected cost rise without it affecting prices. He added that the “unexpected barrage of costs” will “feed into a higher level of inflation” for consumers.
Reeves announced in her Budget last week that employer national insurance contributions will go up from 13.8 per cent to 15 per cent. The threshold at which companies begin paying contributions has also been lowered from £9,100 to £5,000.
The Government also announced it was introducing a tax of 20 per cent on inherited farming assets above £1million. Doogan claimed Labour’s budget “will be paid out of customer pockets”.
He said: “The Labour Government must heed this stark warning which is absolutely clear that their tax hikes on farms and businesses will see food prices spiral and that’s on top of the already inflated prices customers pay because of Brexit.
“We knew Labour’s budget would hit small businesses and jobs, but now it’s clear Rachel Reeves’ budget will be paid out of customer pockets too – the cost of food has spiralled under Westminster’s cost of living crisis and Labour is set to make matters even worse.
“Sir Keir Starmer scrapped the winter fuel payment for pensioners and has gone quiet on his promise to cut energy bills by £300, all the while the cost of heating and eating continues to spiral – the more time that passes, the most this budget unravels in higher prices for people.
“Supermarkets, farmers and producers have been categorical that this budget will cause pain at the till for customers across these islands and it’s time the Labour government listened and backed hard-pressed households this winter.”
The measures on inheritance tax and national insurance were part of a big Budget from Reeves, in which she announced around £70 billion extra in annual spending and £40bn of tax hikes. The employers NI increase will raise £25bn, paying for much of the spending increases which the SNP had called for beforehand.
As part of her Budget, Reeves handed the Scottish Government a £3.4bn boost next year, and £1.5bn for the current financial year. She said this was the “largest real-terms funding settlement” for devolved governments in 25 years.
The UK Government has been approached for comment.
To sign up to the Daily Record Politics newsletter, click here