SNP health secretary Neil Gray has called on Labour to back his party’s calls to devolve National Insurance (NI) to Holyrood.

Mr Gray’s demand comes in the wake of the Labour UK government’s £25 billion hike in employers’ NI contributions in October’s Budget, amid concerns on the cost to public-sector employers.

While the NHS is exempt, GP practices, councils and organisations delivering outsourced social care are not, leading the Scottish government to estimate it could put a £500m dent in the extra £1.5bn this year, and £3.4bn in the next that chancellor Rachel Reeves delivered to Scotland’s coffers in her Budget.

A UK treasury spokesman assured that “additional funding” to meet the costs would be forthcoming, but as negotiations continue between the governments, Mr Gray called for full reimbursement and devolution of NI stating: “Our public services should not pay the price for Labour’s UK Budget.

“The question for Labour today is: will they stand up for Scotland — or will they stand up for the Prime Minister?”

Defending the employers’ NI hike, Scottish Labour deputy leader Dame Jackie Baillie hit back: “The single biggest threat to Scotland’s NHS is the SNP’s dangerous incompetence, and no amount of deflection and scaremongering can hide that.”

Speaking to the Star, Red Paper Collective’s Vince Mills warned devolution of NI would “limit the capacity of a progressive UK government to redistribute wealth across the regions and nations,” adding: “What Scotland really needs are the powers to take democratic control of the economy like serious borrowing powers so that we can invest in publicly owned enterprise.

“The SNP could help by using existing powers to take Grangemouth into public ownership and not selling off Prestwick airport, now that it is making a profit.”