Prospective prime minister Andy Burnham should scrap the Labour Party’s “short-sighted” national insurance tax hike, an SNP MP has said, as new analysis reveals unemployment rates have risen.

The rate of employer national insurance contributions (NICs) rose from 13.8% to 15% in April 2025, while the threshold at which it is paid back has been cut from £9,100 to £5,000.

New SNP MP for Arbroath and Broughty Ferry, Lara Bird, said the policy was “choking-off” economic growth in Scotland.

She said: “Andy Burnham must urgently think again and scrap the Labour Party’s national insurance tax hike, which has destroyed jobs and been a disaster for small and medium-sized businesses.

SNP MP Lara Bird called for Andy Burnham to scrap the policy (Robert Perry/PA)

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“This was an incredibly short-sighted Labour Government policy, which has created a high-cost, toxic environment for businesses across Scotland and the UK – cutting jobs, squeezing wages, reducing investment and choking-off economic growth.

“I want businesses across Scotland to thrive but damaging UK Government policies, including the national insurance tax hike and Brexit, are holding them back and costing Scotland billions.”

Ms Bird’s comments come as new analysis reveals UK unemployment has increased since the Labour Government announced the national insurance tax hike in 2024.

The research, produced by the House of Commons Library and commissioned by the SNP, shows the number of unemployed people in the UK has increased from 1.48 million when the Labour Government came to power in July 2024 to 1.76 million at the most recent count in April.

Job vacancies have also seen a decrease in this time, as in July 2024 there were 867,000 vacancies but by April 2026 that number fell to 707,000.

The research shows the number of unemployed young people aged 16-24 has increased from 618,000 in July 2024 to 735,000 in April 2026 – an increase of 116,000.

Ms Bird continued: “Arbroath and Broughty Ferry is a prime example. Our area is known for the fantastic local businesses located here – creating good jobs in our community and benefiting Scotland’s economy as a whole. The national insurance tax hike has been a hammer blow for these businesses, adding billions of pounds in extra costs, preventing growth and reducing vacancies.

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“The UK jobs market has significantly weakened under the Labour Government – and the UK now faces a growing unemployment crisis as a result of damaging Labour Party policies. All the evidence suggests it will get worse not better unless something urgently changes.

“Under the Labour Party, UK unemployment has reached the highest levels since the Covid pandemic and young people have been disproportionately hit, with youth unemployment at its highest levels in over a decade – damaging their life chances.

“With Westminster policies wiping billions of pounds from Scotland’s economy, and causing unemployment and the cost of living to soar, it’s clear Scotland needs the full powers of independence so we can build a stronger economy and a better future.”

Following the NIC hike, an employer employing someone earning the UK median wage of £39,000 would be liable for employer NICs of around £5,235, rather than the £4,250 it would have been liable for if the threshold and rate had not changed.

This is an increase of around £985 per UK median wage employee.

The UK Government has been approached for comment.