Increase in employer National Insurance contributions is estimated to cost public sector organisations in Wales £380 million
Plaid Cymru has warned that Labour’s rise to National Insurance contributions “risk causing both economic and social harm on communities.”
A cross-party amendment to the National Insurance Bill, led by Plaid Cymru, and supported by the Green Party and SNP, calls on Labour to reverse this tax rise.
The budget's NI increase will cost public sector organisations in Wales £380 million. For Welsh public services, including childcare and care providers, the impact will be devastating.
Small businesses and charities will also suffer. The OBR has warned that the average £800 cost per employee increase in employer NICs will inevitably lead to lower wages, adding pressure to already struggling households.
Plaid Cymru Treasury spokesperson, Ben Lake MP, who tabled the amendment, called for “more progressive and fairer ways to raise revenue” and urged other MPs from Wales to support his party’s proposals.
Ben Lake MP said:
“The UK Government’s proposals risk causing both economic and social harm on communities. The Office for Budget Responsibility has warned that the increase in Employer National Insurance Contributions will lead to stalled real wage growth and higher prices for workers.
“It will also impose significant additional costs on the public sector, third sector organisations, and small businesses, with no provision in the Bill to reimburse vital groups such as university employees, GPs, social care staff, and charities.
“The UK Government had the opportunity to explore more progressive and fairer ways to raise revenue – such as equalising Capital Gains Tax with Income Tax or introducing a Wealth Tax. Instead, they opted for a path that shifts the burden onto those least able to bear it, at a time of significant financial strain on public services and businesses.
“Plaid Cymru cannot support this approach, which prioritises short-term fixes over long-term fairness and sustainability. We are urging are fellow MPs from Wales to reconsider their support for these proposals, and instead support Plaid Cymru’s fairer solutions that reflect the needs of Wales and its communities.”