Meeting of the Parliament 20 November 2024
I appreciate the point that Murdo Fraser makes, because I think that the increase is regressive for growth, which is supposedly the UK Government’s number 1 priority. The UK Government’s own figures, from the Office for Budget Responsibility, demonstrate that the increase is going to have a negative impact on growth.
Later in my speech, I will come to some of the elements in the private sector that have a contractual relationship with public services, and Ivan McKee will touch in greater detail on the impact on the wider economy, which Murdo Fraser is right to point out.
The funding situation means that Scotland’s public services would pay the cost of the UK Government’s tax increase. It would mean that what the UK Government’s budget gives to Scotland with one hand, the chancellor will take away with the other.
As members know, NHS Scotland is our largest employer, with more than 180,000 staff working day in, day out to protect the nation’s wellbeing. My officials have estimated that the total direct costs to the national health service alone in 2025-26 will be almost £200 million as a result of the change.
We also estimate at this stage that there will be a further £40 million cost impact on independent contractors that provide vital NHS services, such as general practitioners, dentists, pharmacists and optometrists. That is not included in the £500 million, which is of acute concern to me. The chancellor has decided not to include any funding for independent contractors, which means not a penny for the GP practices on which our communities rely.
Dr Iain Morrison, chair of the Scottish general practitioners committee, recently told The Scotsman:
“These additional costs could threaten the viability of practices and lead to cutbacks in services—which ultimately means that it is patients who will suffer.”
I have also heard directly from Dr Morrison—and I will be meeting him later today—on his concerns regarding the national insurance uplift, and from professionals representing NHS dental, ophthalmic and pharmaceutical sectors. I am grateful for all their submissions.