Stamp Duty Land Tax was devolved in 2015 with Land and Buildings Transaction Tax coming into force (“LBTT”). However, we also have the flexibility to lower and increase income tax rates.

Taxpayers in Scotland are already identified and 10p in the 20p/40p/45p rate goes to Holyrood although this Scottish segment (Scottish Rate Income Tax) mirrors the UK rate. More powers are coming in the next year or two.

Somewhat depressingly, it seems to me that the consensus is that Scotland is of a permanently left wing tendency. But is endlessly higher taxation really a moral requirement?

The rich already pay a lot more than the poor. What is the point at which the richer in society are paying their fair share? Is it 40% top rate? 50% ? Some say 60% of income.

It is as if the good parts of Thatcher’s legacy have been forgotten, this being that lower rates of tax do not always bring a lower yield for the Exchequer. Does the moral case to squeeze the rich take precedence over responsible taxation?

I believe that government should never take more money away from its people than is absolutely required. Tax is to raise public funds, not punish wealth creation. I do not believe it is right that tax rates are ever set at a level above that which optimises state income.

Those on the Left calling for a rate above 45% in Scotland should be required to present evidence that a higher rate will create more tax for the government overall allowing for “southward emigration” of wealth to England.

I also believe that there needs to be a proper debate about how tax impacts the economy. Scotland’s government, with little past influence on economic performance, has been able to avoid this debate.

However, the devolution of tax powers brings responsibilities as well as opportunities. We need to consider whether Scotland’s rather sick economy (huge deficit, declining oil jobs and revenues) needs a high tax/ high spend approach or whether the kick start will come, not from government spending and public largesse (debt/tax funded) but instead from trying to create the environment for businesses to develop and for inward investment.

Are the two compatible? It would be quite easy to blame Brexit and Westminster for our challenges but to do that without using the devolved powers is to fail to use the powers we have to help Scotland.

If lower tax rates would genuinely help attract people and jobs, then we should at least have the debate to see if we can manage to find a way to have lower taxes. Can we not find the savings in public expenditure somehow – no matter how unpopular that would be?

Without a successful economy all that lies ahead for Scotland is a bigger deficit, fewer jobs and (critically) fewer private sector and skilled jobs. That cannot happen.

We must not let the private sector wither as a form of legitimate price for social justice. Wealth must be created to be redistributed.

Scottish businesses wants certainty. Brexit brings uncertainty. But, that is no excuse for compounding uncertainty with talk of a further referendum. It’s my view that many businesses are already thinking less of Scotland and more of England thanks to the “neverendum”. Now is simply not the time to re-open Pandora’s box.

It’s time to take independence off the table. It’s time to put that debate away for a decade or more and to look at the powers we’ve got in Holyrood and to have a debate about how those powers can be used not just for social justice but to help build confidence in Scotland as a place for businesses to thrive.

This is a plea, whether you like the idea of independence or not, let’s agree to disagree, and put the subject away, see how Brexit goes and meanwhile get the heads down to get Scotland working again.


Donald Parbrook is Director, Milne Craig Chartered Accountants

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