{"id":18853,"date":"2024-11-25T19:23:21","date_gmt":"2024-11-25T19:23:21","guid":{"rendered":"https:\/\/gpt.m2mbeta.com\/?p=18853"},"modified":"2024-11-25T19:23:21","modified_gmt":"2024-11-25T19:23:21","slug":"extra-300m-allocation-will-not-cover-tax-hike-says-scottish-finance-secretary","status":"publish","type":"post","link":"https:\/\/gpt.m2mbeta.com\/?p=18853","title":{"rendered":"Extra \u00a3300m allocation will not cover tax hike, says Scottish finance secretary"},"content":{"rendered":"
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\"GettyGetty Images<\/span><\/div>\n<\/div>\n

SNP minister Shona Robison says the Scottish government will be left \u00a3200m short <\/figcaption><\/p>\n<\/figure>\n
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Scottish Finance Secretary Shona Robison has warned a \u00a3300m increase in UK government funding is “simply not good enough” and will not cover a planned rise in employer National Insurance contributions. <\/p>\n

Treasury officials in London are said to have told their counterparts in Edinburgh that they should receive between \u00a3295m and \u00a3330m extra to pay for additional public sector staff costs.<\/p>\n

A UK government source told BBC Scotland News there is “hundreds of millions of pounds” heading to Holyrood.<\/p>\n

However, Robison said more than \u00a3500m would be needed to cover the staff costs of those directly employed by in the public sector, rising to \u00a3750m when indirect employees such as those in childcare, colleges or social care are included.<\/p>\n<\/div>\n

‘Unacceptable’<\/h2>\n<\/p>\n
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She told BBC Scotland News: “This cannot stand. <\/p>\n

“The UK government Treasury will need to think again on this to make sure that Scotland\u2019s public services are fully funded for the employers\u2019 National Insurance contribution and we\u2019ll be pursuing the Treasury very rigorously about this point.\u201d<\/p>\n

The UK government is believed to have used the Barnett Formula \u2013 designed to give devolved nations a proportionate share of spending in England \u2013 to reach the \u00a3300m figure. <\/p>\n

However, Robison described that total as “unacceptable” and \u201cvery low\u201d based on the Scottish government\u2019s projections using the same formula.<\/p>\n

\u201cWe can\u2019t have a situation where the UK Labour government gives resources with the one hand through [Barnett] consequentials but takes away with the other through not fully funding the employers\u2019 National Insurance contributions,” she said. <\/p>\n

SNP had raise fears that they could be short changed because Scotland has a larger public sector when compared proportionally to the UK as a whole. <\/p>\n

The finance secretary said it should be viewed as a positive that Scotland proportionally employs more teachers, nurses and police officers and should not be \u201cpunished\u201d for doing so.<\/p>\n

She has called for clarity from the UK government on the amount of compensation it will receive ahead of the Scottish Budget, which is due to be announced next Wednesday. <\/p>\n<\/div>\n

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\"GettyGetty Images<\/span><\/div>\n<\/div>\n

Chancellor Rachel Reeves announced a hike in employer’s National Insurance in the autumn Budget <\/figcaption><\/p>\n<\/figure>\n
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Chancellor Rachel Reeves announced the National Insurance change in the UK Budget last month to boost public service funding.<\/p>\n

Reeves said Scotland would receive \u00a33.4bn in additional funding in 2025-26 when she laid out her tax and spending plans – though this did not include compensation for National Insurance.<\/p>\n

The UK government source said the extra \u00a3300m would mean the Scottish government had “no more excuses”.<\/p>\n

They added: “Scots expect delivery from the SNP and to use this money to reduce NHS waiting times and raise attainment in our schools – not fill in a budget black hole created by years of financial mismanagement and waste.”<\/p>\n

The Scottish government is also set to receive an additional \u00a31.5bn for this financial year, 2024-25 – though it said this was in line with its budget expectations.<\/p>\n<\/div>\n

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National Insurance contributions are the UK’s second-largest revenue stream behind income tax.<\/p>\n

It is paid by workers and the self-employed on earnings and profits, and by employers on top of the wages they pay out.<\/p>\n

The chancellor increased the rate of employer National Insurance contributions \u2013 from 13.8% to 15% \u2013 and lowered the threshold at which employers have to start paying National Insurance contributions \u2013 from \u00a39,100 to \u00a35,000.<\/p>\n

This, of course, applies to public sector employees who work for the Scottish government.<\/p>\n

About 600,000 people are employed in Scotland\u2019s public sector, making up 22% of the total workforce \u2013 compared to about 17% in the UK as a whole. <\/p>\n

Scotland’s public sector is also relatively better paid than the UK workforce. <\/p>\n

That fuelled concerns at Holyrood that Scotland would be left short if compensation for the National Insurance increase is not proportional to its public sector.<\/p>\n

A Scottish government spokesperson highlighted that in a vote last week the Scottish Parliament had agreed the UK government should reimburse the cost of the change – “over \u00a3500m”.<\/p>\n

They said: “This UK government policy risks hampering economic growth and damaging public services and whilst discussions with the Treasury are ongoing, we still do not have certainty ahead of the Scottish budget.\u201d<\/p>\n<\/div>\n

‘Tough’ choices<\/h2>\n<\/p>\n
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The Fraser of Allander Institute, an economics research unit at the University of Strathclyde, has also estimated<\/a> that the Scottish government will be left about \u00a3500m short as a result of the tax changes. <\/p>\n

Director Mairi Spowage said: \u201cYou could say, well, the larger public sector in Scotland, the fact that it\u2019s better paid, that\u2019s sort of down to the decisions of Scottish government.\u201d<\/p>\n

But she warned it would be \u201ctough\u201d for SNP ministers to cover a \u00a3200m shortfall.<\/p>\n

Spowage added: \u201cIt will definitely be challenging to absorb that in other parts of the budget.\u201d<\/p>\n<\/div>\n

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\"PAPA Media<\/span><\/div>\n<\/div>\n

Scottish Labour leader Anas Sarwar accused the SNP government of making “ridiculous” claims about the Treasury compensation <\/figcaption><\/p>\n<\/figure>\n
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Scottish Labour leader Anas Sarwar highlighted that the Scottish government was getting an extra \u00a31.5bn in this year’s budget, and \u00a33.4bn in 2025-26. <\/p>\n

He told BBC Scotland News: \u201cOnly an SNP government could pretend that \u00a35bn more money means \u00a3200m less money. <\/p>\n

“I think people would frankly laugh in the face of a government that tries to make such a ridiculous claim.”<\/p>\n

Scottish Conservative leader Russell Findlay described the National Insurance increase as \u201ccatastrophic\u201d and \u201ccounter-productive\u201d.<\/p>\n

He said it was \u201centirely proper\u201d for the UK government to provide compensation.<\/p>\n

\u201cIt\u2019s now incumbent on the SNP government to ensure that that\u2019s passed on,\u201d he said.<\/p>\n

\u201cBut that will protect the public sector who have been hammered by the NI rise, but what it won\u2019t do is protect the private sector.\u201d<\/p>\n<\/div>\n<\/div>\n

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Source: <\/em> www.bbc.com\u2026<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Getty Images SNP minister Shona Robison says the Scottish government will be left \u00a3200m short Scottish Finance Secretary Shona Robison has warned a \u00a3300m increase in UK government funding is “simply not good enough” and will not cover a planned rise in employer National Insurance contributions. Treasury officials in London are said to have told […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-18853","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=\/wp\/v2\/posts\/18853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18853"}],"version-history":[{"count":0,"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=\/wp\/v2\/posts\/18853\/revisions"}],"wp:attachment":[{"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gpt.m2mbeta.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}