Government will not have certainty on ‘huge’ £500m sum when Budget set

The Scottish Government will not have certainty on reimbursement for the national insurance contributions (NIC) rise when it publishes its Budget on December 4, John Swinney has said.

The First Minister called on the Treasury to provide more clarity on how public services will be compensated for the rise.

Chancellor Rachel Reeves announced an increase in the threshold paid by employers in her first Budget last month, estimated to raise more than £25 billion.

The Scottish Government has stressed that public services should be shielded from the increase, which it says will cost the public purse £500 million.

The UK Government says the Scottish Government will receive an extra £3.4 billion next year as a result of the Chancellor’s decisions as well as £1.5 billion in the current financial year.

Speaking to journalists during a visit to Wardie Primary School in Edinburgh on Wednesday, Mr Swinney said discussions with the Treasury on reimbursement for public services are ongoing.

The First Minister said: “We still do not have certainty, and I don’t expect us to have certainty on this question when we set a Budget on December 4.

“Now this is not some trivial, inconsequential factor. This is half a billion pounds.

“It’s a huge amount of money about which we have financial uncertainty as we go into the Budget.”

He said he is particularly concerned about the impact of NIC rises on the care sector.

As the SNP is a minority Government at Holyrood, it will need votes from another party in order to pass its Budget.

Mr Swinney also hit out at Scottish Labour’s proposal for winter fuel payments if it wins power following the 2026 Holyrood election.

Anas Sarwar’s party announced it would create a devolved payment if it wins the keys to Bute House in 2026, but would make it a “fairer system” through means testing.

Mr Swinney said this is “abject hypocrisy” and is intended to “clean up the mess left behind by the decisions of the UK Labour Government”.

The Health Secretary said the Chancellor’s national insurance hike could cost the NHS as much as £200 million.

Speaking during a debate in Holyrood on Wednesday, Neil Gray accused Ms Reeves of “balancing the Budget on the backs of charities”.

He said: “So it all boils down to, once again, Scottish Labour asking Scottish public services to pay for a bad UK decision.

“What a shameful position they have got themselves into where they will sell out our Scottish public services to fill the UK Treasury coffers.

“This Government will not stand for it.”

Scottish Labour deputy leader Dame Jackie Baillie accused the Scottish Government of blaming others for the state of the health service and the nation’s finances.

She told MSPs: “What is genuinely puzzling is that the Scottish Government is still supposedly in discussion with the UK Government and I have not heard that negotiations have ended.

“Perhaps more negotiations and less posturing would serve the people of Scotland much better.”

The Treasury has been contacted for comment.