THE Labour Party’s national insurance tax hike is "destroying jobs, squeezing wages and choking off economic growth", the SNP has said, after figures show the number of people on payrolls fell by 55,000 between March and April this year.
The figures, published by the Office for National Statistics (ONS) on Tuesday, forecast the number is to drop by a further 109,000 in May.
Deputy First Minister Kate Forbes said the figures showed "Scotland’s labour market remains resilient despite global challenges impacting the economy", with the median monthly pay of payrolled employees in Scotland higher than the UK overall.
Responding to the figures, Liz McKeown, director of economic statistics at the ONS said: "Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on”.
Yael Selfin, chief economist at KPMG UK, also warned: "It is likely that businesses will look to offset some of the rise in employment costs through a combination of reducing headcount and slowing hiring activity. Given this, we expect the unemployment rate to edge higher over the coming year".
Ruth Gregory, deputy chief UK economist at Capital Economics said "most indicators show labour demand is clearly weakening."
The SNP have pointed towards Rachel Reeves's UK Budget last October, where she said that employers’ NICs would rise from 13.8% to 15% on a worker's earnings above £175. The changes will kick in from April 1, the same day by which the Scottish Government must have passed its Budget legislation.
As the tax rises were levied on employers – in order to allow Labour to claim they had not technically raised taxes on working people – Scotland's local authorities and public service providers also face cost increases.
SNP deputy Westminster leader Pete Wishart MP said: “The Labour Party’s national insurance tax hike is destroying jobs, squeezing wages and choking off economic growth - with unemployment rising to a four year high as businesses and public services grapple with the increased costs of hiring employees under Keir Starmer’s government.
“The Chancellor must use the UK spending review tomorrow to scrap her damaging jobs tax hike - and implement measures that support small and medium businesses, public services and charities to create jobs and boost incomes - rather than forcing them to cut jobs and wages.
“Voters were promised things would get better but under the Labour government unemployment is rising, the cost of living is sky high, and the economy is moving in the wrong direction, with growth down, borrowing up, and public finances in a worse position than when Rachel Reeves entered Downing Street.
“The SNP repeatedly warned about the damage Labour Party’s job tax would do. Scottish businesses need support not punishing tax hikes from Westminster. Unlike Keir Starmer, the SNP will always stand up for Scotland and support our small and medium businesses to grow and benefit our communities.”
