East Kilbride SNP councillors say they have “great concerns” about the consequences of Labour’s Employer National Insurance Contribution (NICs) hike and the “huge damage” itcould inflict on local businesses and third sector charity organisations.
Changes to Employer NICs will come into effect from April 2025.
The rate of Employer NICs will increase from 13.8 per cent to 15 per cent. Employers will start to pay Employer NICs on salaries from £5,000 (reduced from £9,100).
The legal minimum wage for over-21s will rise from £11.44 to £12.21 per hour.
Councillor John Anderson, who sits on the board of one of the council’s arm’s-length bodies, has claimed Joani Reid, Labour MP for East Kilbride, “chose to ignore” the scale of concern and warnings about Labour’s tax raid and voted against an amendment aimed at preventing a policy which will push up prices, lower employment, lower wages and penalise low paid workers the most.
He said: “We heard that the council faces a £15million additional bill. South Lanarkshire Leisure & Culture – already reeling from a savage Labour/Lib Dem budget cut – will have to find £600,000 to pay the additional cost and from one of the arm’s-length bodies saying they will have to either reduce staff numbers or cut back on some of the important services it delivers in the community.
“So far Joani Reid and her cohorts of Scottish Labour MPs have supported cutting the Winter Fuel Payment for pensioners and failed to scrap the two child limit on benefits. The question is: will Joani keep blindly backing Starmer at all costs?”
Councillor Archie Buchanan, who sits on several local charity boards, added: “Joani Reid and Labour refused to listen when major firms warned the tax-raising measure of a hike in employer’s nation insurance contributions would push up prices and impact on hiring as well as adding to inflation and the cost-of-living crisis.
“This policy will have a devastating effect on the charity sector and the rhetoric of Labour’s promise of change before the election is not the change we are experiencing now. No wonder people feel they were duped.”
He added: “Rachel Reeves raised the rate of National Insurance Contributions for employers from 13.8 per cent to 15 per cent and lowered the salary threshold from £9100 to £5000.
“I am calling on Rachel Reeves to reimburse the full cost year on year to all charities for the cost of increasing Employer’s National Insurance or the cost in lost charity organisations will be catastrophic.”
Joani Reid MP blasted the SNP councillors’ ‘attack’ as “playground stuff” and said the first Labour budget for 14 years “marked an end” to the long years of decline and disinvestment in public services.
She said: “The SNP seem to believe in the Santa Claus theory of public services – that the money to pay for them gets delivered by magic and nobody ever has to pay.
“That would explain why they keep promising things that are never delivered – like free bikes for all school children, reduced class sizes and shorter hospital waiting lists.
“They must think if they wish for something often enough – or maybe if they write it on a note and burn it in the chimney – the money will appear in a big red sack.
“Labour, in contrast, knows that you do not get something for nothing.
“Our budget – the first Labour budget for 14 years – marked an end to the long years of decline and disinvestment in public services. There will be more money available for schools, police and public transport – and in Scotland devolution means decisions about how it is spent will be made here.
“But we don’t pretend that extra money falls from the sky or can be picked off the boughs of the magic money tree.
“The SNP are perfectly happy to spend the money they get from the Labour government and just as keen to demand more and more and more of it. But they also oppose every measure taken to pay for it.
“It’s not serious politics. It’s just playground stuff that adults should have grown out of years before.
“So they can attack me all they like personally and politically but until they start behaving like adults they will be going nowhere.”
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