The Treasury will give Scotland £300 million in compensation for the tax increase

National insurance contributions are the UK’s second largest income stream after income tax.

It is paid by employees and the self-employed on the basis of earnings and profits, and by employers in addition to the wages they pay.

This obviously has implications for public sector employees working for the Scottish Government.

Around 600,000 people are employed in Scotland’s public sector, representing 22% of the total workforce – compared to around 17% in Britain as a whole.

That has fueled concerns at Holyrood that Scotland could be left wanting if the compensation for the increase in national insurance is not proportionate to the public sector.

Scottish Finance Minister Shona Robison had urged the Treasury to provide what she called “clarity” on how any mitigation measures could work.

Earlier this month, Ms Robison said: “The increase in National Insurance for UK Government employers could hit services in Scotland to the tune of around £500 million – and the more we look at this announcement, the more we realize it. to worry about.

“With the failure of the Treasury to provide clarity on any mitigation process at the time of budget publication, services across Scotland are feeling increasing confusion and anxiety at the very time they need to be able to move forward plans.”

A Scottish Government spokesperson said the Scottish Parliament had agreed to the UK Government covering the cost of the change – “in excess of £500 million”.

They said: “These UK Government policies risk hampering economic growth and damaging public services, and although discussions with the Treasury are ongoing, we still have no certainty about Scotland’s budget.”