Kenny Farquharson: Welcome to Scotland – a haven for the filthy rich

These days you are met by a sign that says: “Welcome to Scotland.” Not exactly a slogan that grabs you by the lapels. So I have a suggestion for a replacement. How about: “Welcome to Scotland: the best place in the British Isles to be filthy rich.”

Last week’s Budget shone a bright light on a simple truth: if you happen to be rolling in lucre, with a salary well into six figures and a fancy house in a leafy suburb, you will be even filthier in your richness if you have the good fortune to live north of the Border. George Osborne cut the top rate of income tax, handing every millionaire in the UK a nice little backhander of £45,000. And to offset that he ensured there would be a punitive new top rate of stamp duty on selling homes worth more than £2 million. While this new tax burden was received with wailing and gnashing of teeth in Kensington, where the average house price is £2m (yes you read that correctly, the average price), here in Scotland the news was greeted with the popped corks of vintage Perrier-Jouët.

Scotland, you see, has very few homes priced in the £2m-plus bracket. In fact, looking at the past decade, only ten such houses are sold here every year. So the filthy rich north of the Border will not exactly be shouldering their share of the burden as the country as a whole suffers from the Treasury’s austerity measures. This is nothing new, however. By a combination of Budget quirks and SNP policies, the rich in Scotland already get a far easier ride than their counterparts in England.

In England, as spending cuts bite, there is an expectation that if you can afford to pay for public services you should pay, while those who can’t afford them get them free. In Scotland, however, it doesn’t matter if you light your Cuban cigars with tenners, you still get free bus travel, free personal care for your elderly relatives, free prescriptions and free eye tests. You also get free university education for your children – which must be such a relief after all those years of paying private school fees. I say “free”, but of course, these things are not free. Providing these services for the rich is paid for by the not-so-rich and the not-at-all-rich – the rest of us, in other words – through our taxes. I don’t know about you, but I hope the rich are jolly well grateful.

Then of course there’s the council tax. Now, I know the SNP’s council tax freeze has been a welcome respite for cash-strapped families across Scotland at a difficult time. The problem is its lack of finesse as a policy. It is indiscriminate. It gives you a freebie whether you need it or not. In fact, in cash terms it gives a bigger tax break to the rich than it does to the poor (£193 a year for the richest 10 per cent of Scots compared to £51 for the poorest 10 per cent). Looked at more broadly, the richest 20 per cent of people in Scotland benefit more in cash terms from the council tax freeze than the bottom 50 per cent. Over the past five years the cost of financing this tax break for the richest 10 per cent has been £155m. That’s a lot of midwives, care assistants and school jotters.

Admittedly, since last year this freebie has not just been a Scottish benefit. The Tory-led government at Westminster introduced it for England as well. Still, here in Scotland, since 2007 this £155m has helped pay the stabling costs for many ponies, and has financed many skiing holidays. Money well spent, I’m sure you’ll agree. And the giveaway will continue to benefit the economies of Broughty Ferry, Barnton and Bearsden for some years yet, as the SNP continues with this policy.

My point is this. Last week the SNP condemned the Budget, saying it failed the test of “fairness”. This criticism was undoubtedly true. But is it fair for the wealthiest people in Scotland to be escaping the austerity measures currently afflicting some of the poorest and most vulnerable in our country? Is it fair that the richest people in Scotland will actually get substantially richer, courtesy of both the Scottish Government and the UK Government, while the poorest feel another unforgiving turn of the economic screw?

SNP leaders may well shrug and say the Budget is not of their doing. True, but we do not live in a vacuum. We are affected by the world outwith Scotland’s borders, and have to take these changes into account in how we order our affairs. Currently the Scottish Government has limited powers, but one of the fiscal levers it does have is property tax. Conveniently, this is also one of the most effective ways of taxing the filthy rich because it is hard for a millionaire’s accountant to hide a six-bedroom mock-Tudor villa with a three-car garage.

So, will Alex Salmond, as a believer in a fair society, use his powers to ensure the rich make a more equitable contribution to the common weal? The SNP has dragged its feet in the reform of local taxation. It failed to introduce a local income tax in the last parliament, but had no Plan B that would have won majority support (for example, new council tax bands at the upper and lower ends of the scale). As a result, the same local taxation iniquities Salmond complained about in 2007 are still taking their toll, after five years of SNP rule. There are no plans to reform the system before 2016. It is another example of the SNP being in government but not in power.

Salmond has been vocal about cutting tax (for big corporations). But since his ill-fated Penny For Scotland campaign in 1999 he has been silent on how and when he would raise tax, and on whom. An ill-divided Scotland means that is no longer good enough. The First Minister must act to make Scotland a fairer country.