Analysis: SNP's positive response to Sir Tom Hunter tax proposals further sign of pro-business swerve

Nationalists often look towards Ireland for inspiration and the SNP continue to do so

Sir Tom Hunter’s proposals for targeted corporation tax cuts for specific growth sectors of the Scottish economy received an intriguingly positive response from the Scottish Government.

The suggestions, put forward in a newly published paper, were for sectors such as artificial intelligence (AI), medical technology and renewables to pay just 15 per cent corporation tax – down from the UK-wide level of 25 per cent – in a bid to boost growth, increase the tax take, and improve employment.

In essence, the plan would be to follow Ireland’s example and hope foreign direct investment could boost Scotland’s “anaemic” growth figures.

Humza Yousaf pledged to reset the relationship of businesses with the Scottish Government when he entered Bute House

On the face of it, these are proposals the SNP should struggle to back given the party’s commitment to progressive taxation, leaving them open to accusations of being contradictory through taxing the rich, but not businesses. But they also offer an opportunity to continue the summer-long pivot towards businesses, one economy secretary Neil Gray grasped in his response.

Firstly, any additional power for Holyrood is welcome news for the SNP, so it makes sense to back its devolution.

Secondly, the basic argument for such a targeted policy allows the SNP to continue making the right noises as it rebuilds its relationship with businesses and as Scotland continues to perform well in terms of foreign direct investment.

Thirdly, there is also arguably no big contradiction at the heart of these plans when it comes to progressive taxation.

In Ireland, those earning the most also pay a significant amount in tax. Those in the highest tax band often have a marginal tax rate of 70 per cent once pay related social insurance, which goes towards Ireland’s welfare state, and universal social charge, a tax on gross income, including pension contributions and other non-cash benefits, are taken into account.

A low business tax environment is not necessarily a low personal tax environment. Overall, therefore, these proposals from Sir Tom are a no-brainer for the SNP to back.

They tick every political box, including with independence, and help to boost a central mission of the new leader, helping to dispel concerns raised about the party being anti-business. Expect to see more.