Plaid Cymru leader Rhun ap Iorwerth warned the rise in employer national insurance contributions from 13.8 per cent to 15 per cent in April will have a disproportionate impact in Wales.
He told the Senedd: “Labour are quick to accuse others of fantasy economics whilst their own plans represent nightmare economics for thousands of employers and employees.”
Raising concerns about the impact on job creation and wages, he said employment levels are at their lowest for almost a decade – lower than anywhere else in the UK.
Senedd Members share concerns about insurance hike
He accused Labour of breaking a manifesto pledge as he pointed to an Office for Budgetary Responsibility (OBR) assessment that three quarters of the cost will be passed to workers.
Leading a debate on November 20, Mr ap Iorwerth called on the UK Treasury to fully cover the added cost to public sector employers in Wales.
He said: “It’s not the private sector only … bearing the brunt. Charities, GPs, universities – sectors already feeling the squeeze, to say the very least – have been taken to the brink.”
He pointed to “eye-watering” bills of £90,000 for some GPs, with the British Medical Association warning some surgeries could close as a consequence.
Mr ap Iorwerth said mental health charity Plattform faces a £250,000 annual bill and Welsh universities, “already crippled by financial challenges”, will face significant further pressures.
Plaid Cymru’s motion urged Welsh ministers to press the UK Government to apply a wider definition of the public sector workforce to include universities, GPs and charities.
Peter Fox, the Conservatives’ shadow finance secretary, similarly accused Labour of breaking a manifesto commitment not to raise tax on working people.
The former council leader said: “Time and time again – the chancellor went on TV and made the claim, only to u-turn after they got into power.”
Mr Fox, who represents Monmouth, said even a 1 per cent rise in employer national insurance contributions for the public sector would cost Welsh taxpayers an extra £100m.
Senedd members voted 25-19 against Plaid Cymru’s motion.