Hervey Gibson: Taxman's arguments lead way on fiscal devolution

In the field of business taxation, it didn't need a riot to bring out the Cambo in the Prime Minister, just an electoral setback. A once-thundering London daily newspaper ran "Cameron blocks SNP tax power bid" as the main story in its first Scottish edition after the Holyrood election results were declared. It quoted UK government sources as saying that handing corporation tax to Holyrood had been "ruled out".

Alex Salmond fired the first volley. Only his party had mentioned corporation tax in the campaign, but he made it a key focus of his constituency victory speech. Now his government has appealed for views - with a deadline of 5 September so that they can be incorporated in Westminster's Scotland Bill.

Political counterfire came from Treasury minister David Gauke, initially in a Commons speech and later in this column. Unfortunately the arguments he "stands by" in an HMRC paper are founded on nonsensical assumptions, that the tax has already been devolved. He looks at things only from a UK taxman's viewpoint, not that of the Scottish or UK private sector. He glosses over the positives even for the UK taxman and doesn't even consider UK benefits of tax devolution. When the negative numbers, even inflated by the cooky assumptions, aren't scary enough he adduces some very hairy extra figures in order to save face.

The main face Gauke is trying to save is that of Michael Moore, LibDem Scottish Secretary. Moore has moved miles from the fiscal federalism advocated by his party's great Scottish leaders, Jo Grimond and David Steel, and appears to be fighting the HMRC-Conservative corner. His position is made more embarrassing by the fact his press releases don't draw any distinction between financial consequences for Scotland and those for the UK.

Two membership organisations have weighed in. The Institute of Chartered Accountants of Scotland (Icas), the oldest professional accounting body in the world, has fittingly taken a historical approach. Its intervention - reported in Scotland on Sunday - draws on its evidence on Northern Ireland corporation tax. These were broadly repeats of its Calman submission. That "represented views of members consulted over recent years, updated by several tax committees". Surprisingly, all nine arguments advanced are couched against devolution. There is no suggestion that from a specifically Scottish - or, for that matter, Belfast - point of view, devolving tax should mitigate the "headquarters deficit" outside London. It would thus help Icas members to thrive outside the metropolis.

The Scottish CBI appears to find itself in an awkward position, which it describes as "sceptical". Its Northern Ireland counterpart supports devolution but the uniformity writ of CBI HQ seems to run stronger in Glasgow. The Irish equivalent is one of the strongest advocates of taxation autonomy. CBI Scotland spoke of the need to balance "certain costs and risks" against lower tax rates. But the former would be millions of pounds, maybe tens of millions, while the latter would save members hundreds of millions or, on HMRC figures, maybe billions. Doug McWilliams, a former economic director of CBI UK, now chairman of London's Centre for Economic and Business Research, came out in favour of tax devolution after George Osborne's first Budget in 2010.I enjoy a good debate and hope it will be opened up by the Scottish Government's thoughtful discussion paper. Won't it be disappointing if Westminster ministers and professional bodies confine themselves narrowly to the interests of the tax collector? That will leave Scottish politicians and the individual companies through which we create our economy a clear field for political vision and Scotland's wider economic interests. Express your interest now.

• Hervey Gibson is chairman of Cogent Strategies International and former head of economics at Scottish Enterprise.