TOP TAX ADVISER : WHY I FEAR FOR SCOTLAND UNDER NICOLA

DONALD PARBROOK

Nicola Sturgeon and I are almost exactly the same age.  We both grew up in the west of Scotland and we both attended state schools but I can’t think of any other things I might have in common with her save for a genuine belief in doing what is best for others when you can.  

Like many, I really did believe the fever pitch “YES” excitement would die away after September.  But nothing appears further from the truth.

I hoped that we might put the divisiveness behind us and move forward as one, accepting our “team GB” status and that the politicians would return to working hard for the people they represent.

The referendum process left families and friends bruised and I hoped the lid was back on Pandora’s Box and we could all build our friendships again, accepting the vote.

However, it appears that having got within sight of the 50% target, those who want to break away are determined to use the referendum campaign as a platform for yet more devolution, more differentiation and less alliance with those south of Gretna within the UK.

They see last year and this election as stepping stones and that the will of the majority of those around them is a democratic inconvenience to be overcome in the name of nationalism at all costs, at some time ahead.

There is no doubt, the SNP and its supporters still want independence and that their “No.1 objective” is unchanged – just delayed.

However, what worries me more is the use of devolved power purely and simply for socialism rather than to satisfy some democratic deficit.

I wonder how a left wing experiment for “Scotland but not England” with higher taxation on the rich (we’ve seen it with stamp duty already) might affect the wealth creators and the middle classes   – those with good jobs, valuable houses and families here.
With Salmond passing the baton to Sturgeon it appears the Labour party has been replaced as the voice of the Scottish Left by Nicola Sturgeon.

And boy, is she on the left.  As she rightly stamps her own vision and authority on the SNP it is clear that Salmond’s more pragmatic stance has gone and that the “progressive” vision she has is for a shift to Left wing, large state, high tax structures.

Will she get the chance to create our very own socialist independent state?  Or merely more power to make Scotland a socialist region of the UK?  The latter looks very likely now. 

So, as we face the election, I have to say, as a tax adviser within a firm of accountants, “what’s in it for us” if the SNP get some of their wish list?

When is somebody ‘rich’?

As far as I can see the SNP vision of fiscal autonomy is all downsides for the middle class – and the dangers of having regions of the UK with quite different tax and spend policies is really quite unattractive as we make Scotland a special “high tax” region of the UK… the very opposite of what a geographically challenged zone of a country would want.

For me, how would “fiscal autonomy” change my life?

My job will surely change as new tax rules come into force just for Scotland (like the new Stamp Duty replacement) but I’ll still need to be up to date on “Rest of UK” too – the longest tax code in the world bar none plus Scotland.  Deep joy for all of us working in tax.

My income will surely be taxed more heavily than now, as a higher earner but more worryingly, is that it will be taxed more heavily than if I lived in Carlisle or Manchester.

My property value has probably dipped with the new higher stamp duty in Scotland for above average properties (I get no sympathy) – and the duty is higher than equivalent houses in England (and remember not all of England has London prices!) but having worked damn hard to repay my mortgage (some of it) it’s upsetting that government policy would damage the value of my main asset.

I was asked once to define “when is somebody rich?” The answer is “when they have more money than me!”

The SNP appears, with its commitment to 50 per cent tax rates (even though this would raise almost nothing in Scotland), to want to send a signal to people that it is a party that punishes wealth.  A party that will tax the rich hard to retain large public sector commitments. 

Such a stance is possibly viable if applied across the UK as a whole. However, if applied in Scotland by a party that has not only minority support in Scotland but represents a tiny fraction of the UK vote, is utter folly.

People in my experience only occasionally leave the UK to avoid tax.  However, people do move around the UK for better opportunities for their families.

If we get fiscal autonomy and Scotland chooses to “move to the Left” on taxation, I think it is fair to say that many of those businesses and people who urged a NO vote will finally consider a drift south.

And certainly inbound businesses to the UK are hardly likely to choose Scotland over England if we offer higher taxes to prop up additional state largesse.

I write this article not to urge people to suddenly become “Right wing” but because if we are to move “Left or Right” it is better to do it as a whole.

What the SNP want, in creating fiscal autonomy so they can have “progressive” policies”, is for Scotland to become an “anti-Hong Kong” special zone.  Instead of having a light touch/low tax business hub we will move in the other direction.

It is my deep concern that if Scotland moves unilaterally to higher taxation than England that the economy will suffer and under-perform, leading to a downward spiral.

For me, personally, the easy answer could be to move to England and commute to my family if the business climate becomes less attractive.

I have no fear of that, only dismay at the prospect but nationalism seems very ugly to me, and doubly so when it is not about creating a better democratic legitimacy (we voted ‘No’) but it is about creating a socialist mini-regime in Holyrood. The question is, will I have the bottle…. And will I need to?

I do fear for Scotland, as surely I’m not the only “hard working person” now worrying about ‘Devolution Plus’ as much as independence. 

Donald Parbrook is director, Milne Craig Chartered Accountants, and writes in a personal capacity.

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