By Karen Peattie

RESPECTED Scottish business leaders Lord Willie Haughey and Sir Tom Hunter have hit out at the UK Government over its decision to pay for reforms to the care sector and NHS funding in England by increasing National Insurance contributions from April 2022.

Speaking on The Go Radio Business Show yesterday, the high-profile business stalwarts firmly opposed the rise in NI contributions, calling instead for those who can afford it to be taxed more instead and suggesting that increasing Corporation Tax would be a more sensible and palatable option.

Sir Tom mooted the idea of an “insurance bond” that people contribute to from a young age that can then be drawn down to pay for care years down the line.

He described the Government’s move to increase NI as a “bad policy”, noting: “It is anti-enterprise and it is anti-job. There is no disagreement around this table about the need to take care of people in their later years but – and here’s the but – everybody thinks that the Government has money.

“The Government doesn’t have money – the Government taxes us, the taxpayer, and decides how to spend it. So, in social care, if you can afford it, you shouldn’t be a burden on the NHS or anybody else and I think there should be an insurance bond that you pay into from an early age, if you can afford it, that then pays out to take care of you in your later years.

"If you can’t afford it then that is where a civil society steps in to take care of you.”

Sir Tom, pointing out that people like him should be paying a bigger share, added: “National Insurance is wrong because it is a tax on the lower paid which is not fair or equitable, and it is a tax on the employer.

"Surely the brains around the Government table can up with something better.”

Labour peer and owner of City Facilities Management Holdings Lord Haughey told show host Donald Martin, the editor of The Herald and The Herald on Sunday, that those who could least afford to pay more would be severely affected.

“My problem with NI is that you have to pay it whether you are making money or not.

“I would prefer to see an increase in Corporation Tax where you pay tax because you are making money. I understand that you need money for the NHS but I think there is better way of doing it.”

Asked if an increase in National Insurance contributions would dampen the economy by taking money out of people’s pockets, Sir Tom said: “Absolutely. We need to get our economy back on an even keel.”

Meanwhile, Lord Haughey asked if it was right that Prime Minister Boris Johnson had broken an election promise not to raise National Insurance when he entered Downing Street in 2019.

“When it is a big part of your manifesto and you sweep into power with a majority you couldn’t believe … how can you go back on that pledge?” he said.

Sir Tom, however, added: “When did any politician ever keep their word?”

The new health and social care tax will begin as a 1.25 percentage point rise in National Insurance from April 2022, paid by both employers and workers, and will then become a separate tax on earned income from 2023, calculated in the same way as National Insurance and appearing on an employee’s payslip. Along with guests from the Scottish business community, The Go Radio Business Show features business advice and insight from Sir Tom Hunter and Lord Willie Haughey at 11am on Sundays.