ALEX Salmond’s pledge to slash corporation taxes in an independent Scotland has been dealt a fresh blow after it was revealed that businesses north of the Border show “no great desire” to back the flagship policy.
A report published yesterday by the economic development organisation, the Scottish Council for Development and Industry (SCDI), revealed that tax cuts were not a high priority for Scottish businesses
The First Minister has promised to undercut the corporation tax rate of the rest of the UK by 3 per cent if the SNP retains power following a Yes vote in next year’s referenendum.
However, the SCDI report, Future Scotland: Discussions and Priorities, which summarised discussions with business across Scotland, questioned how Mr Salmond’s policy would be funded.
The document, which was produced on the basis of 72 interviews and 91 responses to an online survey, recognised that a “significantly” lower rate of corporation tax would attract inward investment.
But with George Osborne having pledged to cut the UK-wide rate of corporation tax from 23 per cent to 20 per cent by 2015, businesses suggested that an independent Scotland may have “missed the boat”.
The report noted: “There is no great desire to participate in a race to the lowest tax environment.”
It also said many respondents raised questions about how a competitive corporation tax would be funded and said they were satisfied by the UK government’s fiscal regime.
Yesterday, Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury in the UK government, said: “The coalition government is committed to making Scotland open for business which is why corporation tax will be cut to 20 per cent by 2015.“It is for the Scottish Government to explain why a race to the bottom is the only economic policy they have announced to date.”
Business and civic organisations have been “ill-served” by politicians on both sides of the independence debate, the report said said, adding that the economy could not afford to become a “football” in the debate.
Last night, SNP finance secretary John Swinney said: “The Scottish Government welcomes this report and the positive contribution SCDI makes through its engagement in the debate on Scotland’s future.
“SCDI has rightly identified a number of key areas where greater progress could deliver stronger growth for Scotland’s businesses and the communities, and it is only with the tools of independence that future Scottish governments will be able to fully meet these ambitions.
“I welcome SCDI support for the Scottish Government’s proposal for a formal Sterling area with a shared currency, which is not only common sense but would ensure the continued UK-wide market in areas like financial services that their members want to see with independence.”
Mr Swinney added: “We agree with SCDI that the quality of debate and information could be improved by discussion. We remain disappointed that Westminster continues to resist any such discussion.”