THE SNP’s flagship pro-business policy to slash the headline rate of corporation tax in an independent Scotland could be reviewed amid claims it is costing the party support prior to the independence referendum.
First Minister Alex Salmond and Finance Secretary John Swinney have backed a plan to undercut the UK’s tax on profits to signal that Scotland was “open for business”.
However, some within the party are now lobbying for a re-think, claiming Deputy First Minister Nicola Sturgeon is sympathetic.
Last week, asked whether she personally supported the plan, she said that a corporation tax cut was “one of the ways” of giving Scotland a competitive edge, but that “more detail” on the party’s business case would be unveiled.
The pressure for a rethink came after Chancellor George Osborne announced that business rates in the UK would be cut to 20 per cent by 2015 – the same figure used by Mr Swinney two years ago when he sought to highlight the benefits of a lower figure for Scotland.
The focus on low tax havens has been sharpened following revelations about the tiny sums of tax paid to the UK exchequer by multi-national firms operating in the UK, such as Google and Amazon, both of which route their profits elsewhere.
Google bases its sales wing in Ireland, which has a rate of 12.5 per cent.
Google’s huge advertising sales base for Europe is based in the country. It means that the company paid just £6m of tax to the UK in 2011 on £2.6bn of profits derived in the country.
The SNP pledge has won support from entrepreneurs such as Sir Tom Hunter and the pro-independence Jim McColl.
One senior SNP source said that the party’s low corporation tax policy was no longer such a red line issue, largely because Osborne was cutting the UK rate to 20 per cent.
“It’s not such an issue for business any more,” the source said.
Another well-placed source said that the policy had been debated internally for the last 18 months. “However, the backers haven’t won over John Swinney,” the figure said.
Other figures said that a rethink could see the party ditching its offer of a headline rate cut and instead offering a “zero-rating” to specific industries, such as Dundee’s thriving computer games industry.
It is understood the SNP will now set out its own manifesto for a post-independence government which may lay out its full plans. Senior party sources last night insisted that the pledge for a headline rate and such specific “zero-rating” offers were not mutually exclusive.
One said: “Having control over corporation tax means we could look at all these things. There is still that commitment to look at the headline rate.”