Government must heed local business concerns over National Insurance tax increase – Carmichael
Orkney and Shetland MP, Alistair Carmichael, has today in Parliament called on the government to take seriously concerns from small- and medium-sized enterprises in the hospitality sector about the hike in National Insurance Contributions for employers. Speaking during Business and Trade questions Mr Carmichael cited his discussions with local businesses in the isles on the impact the tax hike is having on their ability to hire and keep on part-time and seasonal staff, and called for greater cooperation with the Scottish government to mitigate the harm to the visitor economy.
In the Autumn Budget the government announced an increase on employer National Insurance Contributions from 13.8% to 15%, in effect from 6th April 2025.
Speaking in the House, Mr Carmichael said:
“The impact I hear from small- and medium-sized enterprises in my constituency, primarily in the visitor economy, is that they are anticipating cutting the hours of part-time staff, laying them off, and reducing the number of seasonal employees that they will take on.
“Will the minister take these concerns seriously and work with ministers in the Scottish government to ensure that the legitimate concerns that SMEs in my constituency have do not blossom into a full-blown crisis of confidence?”
Responding for the government, the Parliamentary Under-Secretary of State for Services, Small Business and Exports, Gareth Thomas MP said:
“I am always happy to work with the Scottish Government and other devolved governments on how we can improve the business environment. I’m sure he will want to join with me in encouraging the government in Scotland to mirror the changes that we have made to business rates relief. Given the sizeable increase in the Scottish budget it is somewhat surprising that the SNP have not been willing to support the retail sector through an extension of retail hospitality relief.”
Reacting after the exchange, Mr Carmichael said:
“As we head towards the peak season for tourism and hospitality the last thing we need is another drag on jobs. The government must reconsider these tax hikes and the impact they are having on small businesses in communities like ours.”