BMA Scotland warns National Insurance rise could be ‘substantial blow’ to Scottish practices

The chair of the Scottish general practice committee has warned the National Insurance rise in Labour’s first Budget could be a “substantial blow” to Scotland’s doctors.

Rachel Reeves announced on Wednesday that there would be a hike in national insurance employer contributions, raising concerns GP surgeries will have to consider making staff redundant.

Dr Iain Morrison, chair of the BMA Scottish General Practice Committee, has now called on both administrations to provide additional funding to prevent GP’s “shouldering the burden”.

He told The Scotsman: “The recent announcement of a significant rise in employer’s National Insurance Contributions from April 2025 is potentially a substantial blow to Scotland’s GPs who are already struggling to ensure practices are financially sustainable in a period of substantial under-resourcing.

“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.

“BMA Scotland has already raised concerns about the impact of this tax rise directly with the Cabinet Secretary Neil Gray, and we are working hard to ensure the resources necessary are provided to support practices with these new costs. However, until that support is guaranteed GPs will understandably be extremely concerned and we are advising them to begin planning now on how they can keep their practice sustainable.

“We would call on both governments to urgently provide reassurances on additional funding and ensure GPs will not be forced to shoulder the burden of these extra employment costs at the expense of the care they will be able to provide to patients.”

Health Secretary Wes Streeting has also been asked to give GP’s an exemption. | Getty Images

Concerns were also expressed by Age Scotland, who claimed social care in Scotland was in a “precarious place”.

Head of Policy Adam Stachura said: "Scotland needs greater availability of care homes and community care services, not less, and staff need to be paid more fairly for the crucial work they do. But that becomes much harder to achieve if care companies and organisations such as charities with very fine financial margins struggle to cope with further cost increases such as this. We are very worried about what the future holds for them.

"Social care in Scotland is in a very precarious place with huge challenges recruiting and retaining its vital workforce. If it becomes harder to do that and keep the businesses going, then the crisis we are facing deepens - ultimately leaving older and disabled people without the care they need and rightly deserve."

Meanwhile, a care group has called on the UK government to exempt social care providers from the hike or ring-fence funding to cover it.

Independent Care Group (ICG) chairman Mike Padgham said: “The government has to do something and it has to do it quickly, as I am already hearing from providers that this might be the last straw for some of them.”

It follows Care England, which represents providers in adult social care, claiming the national insurance rise, combined with wage rises, will leave the sector with “an additional circa £2.4 billion funding hole to plug”.

The Royal College of GPs (RCGP) has now announced it has contacted Wes Streeting, seeking assurances that practices will be protected like “the rest of the NHS and public sector”.

After government sources indicated that GP surgeries will not be eligible for compensation over the rise, the Liberal Democrats have now branded it the “GP penalty”.

Liberal Democrat Treasury spokesperson Daisy Cooper MP said: “The government must scrap this GP penalty immediately.

“After years of the Conservatives disgraceful neglect, our primary care services are in crisis and this could push many to reduce the number of staff they employ or just decide to shut up shop.

“Instead of investing in our GPs and their staff, the government has put more pressure on them in a move that will make it even harder for patients to see a GP when they need to.”

A UK Government spokesperson said: “Health is a responsibility devolved to the Scottish Government and the Autumn Budget provided it with a record £47.7 billion settlement – the largest in real terms in the history of devolution.”

Onegovernment minister yesterday said the UK is in a “very different world” compared to the turmoil which followed Liz Truss’s economic plans, as the Government sought to quell post-Budget market jitters.

The scale of extra borrowing in Ms Reeves’ Budget – around £32 billion a year on average – saw yields on government bonds increase as the market responded to the Chancellor’s plans.

The value of the pound has also fallen against the dollar following Labour’s first Budget in more than 14 years.

But Darren Jones, Ms Reeves deputy at the Treasury, told Sky News that “markets always respond to budgets in the normal way”.

“I think we’ve all got PTSD from Liz Truss,” he added.

The Treasury minister compared Ms Truss’s decision to sack the Treasury’s chief official and snub an analysis of her spending by fiscal watchdog the Office for Budget Responsibility (OBR), with Labour’s plans.

He added: “Completely different in contrast to now: We’ve got verified reports from the independent Office for Budget Responsibility that say we meet our fiscal rules earlier than had been planned originally, 2027-2028, that those tough fiscal rules means there is a fiscal consolidation and that strong approach to public spending.

“We’re in a very, very different world.”

The senior minister conceded that the headline Budget tax rise in national insurance contributions (NICs) for employers would impact “working people”, following a similar admission by Ms Reeves.

The £25.7 billion change to employers’ NICs is expected to raise around £16.1 billion by 2029/30 as firms curb wage rises, cut hours and reduce profits – while public sector employers get compensation in their budgets for the change.

Asked by Sky News if it would impact workers, Mr Jones said: “Yes, but the question in the manifesto, the promise in the manifesto, was not to increase the rate of tax that employees pay in their payslip.

“It says that we make a promise to working people, that’s people who go to work and get a payslip, that we will not increase income tax or national insurance.”

The Resolution Foundation economic think tank has branded the increase a “tax on working people”, and said it will show up in their payslips in slower growth.

The OBR forecasts that by 2026-27, some 76 per cent of the total cost of the NICs increase is passed on through lower real wages – a combination of a squeeze on pay rises and increased prices.

The measure could also lead to the equivalent of around 50,000 average-hour jobs being lost, the watchdog said.

Mr Jones also admitted to broadcasters that GPs and care homes will have to pay the NICs increase.

But he told BBC Breakfast some GPs “may end up in a better position than they were in before” because of extra investment across the NHS.

Despite an endorsement from the International Monetary Fund (IMF), financial markets have not been reassured by the Budget.

The yield – or interest rate – on a 10-year gilt, an indicator for the cost of state borrowing, hit 4.568 per cent on Thursday afternoon, the highest point since August 2023, while the pound also weakened against the dollar.

Gareth Davies, the shadow exchequer secretary to the Treasury, told Sky News that market moves in the wake of the Budget are “embarrassing” for the Chancellor.