Exclusive:Tory candidate Murdo Fraser calls for lower tax in Scotland than UK to boost economy

A candidate vying to become the next leader of the Conservatives north of the Border has called for tax rates in Scotland to be lower than the rest of the UK to help boost the economy.

Tax rates, particularly income tax, have become a key dividing line between the SNP and their opponents at Holyrood.

Those earning more than £28,867 in Scotland pay more income tax than someone with the same earnings elsewhere in the UK. But the majority of Scottish income taxpayers pay less than they would elsewhere in the UK.

Murdo Fraser, one of six candidates running to replace Douglas Ross as leader of the Scottish Conservatives, is calling to “not just to equalise tax rates with the rest of the United Kingdom, but to go further, and make Scotland a lower taxed economy”.

Writing in today’s Scotsman, Mr Fraser has insisted that “getting the Scottish economy right is the fundamental building block of every other part of our political offer”. 

He added: “If we can demonstrate to the voters that we have the policies to grow our economy, and therefore improve their standard of living, everything else will flow from that.

“And we will generate the vital tax revenues we need to fund improved public services.”

The Mid-Scotland and Fife MSP said that the “need for a clear economic plan is greater than ever”.

He claimed that “unfortunately, the approach of the SNP in government has been to go in entirely the wrong direction”, pointing to the Scottish Government “hiking taxes for everyone earning above £28,000”. 

Mr Fraser said: “This tax differential is now creating a real burden on vital sectors of the economy, and constraining our ability to deliver the growth that we need.

“Some businesses have even started talking about having to pay a ‘Scottish weighting’ in the form of higher salaries to offset the additional tax, in order to have a chance of attracting the talent they need to work here.”

The leadership candidate said it “seems obvious that this tax differential must be eliminated if we are to lift the restriction on Scottish growth”, adding: “I would argue that it is time to go further than that.”

He said: “We should be using Holyrood’s tax powers not just to equalise tax rates with the rest of the United Kingdom, but to go further, and make Scotland a lower taxed economy.

“This is a move that would need to be done over time, and funded by the proceeds of growth in the economy, but a clear direction of travel would reassure those who are currently nervous about moving to Scotland because of the threat of ever-higher personal taxation.

“More importantly, it would send out a signal to the rest of the UK, and internationally, as to the attractiveness of Scotland as a place to live and invest. 

“By creating a lower tax environment there is an opportunity to deliver a virtuous circle of a faster-growing population, increasing economic growth, and with it higher tax revenues.”