Scotland should have lower taxes than UK, claims minister dogged by accusations of 'cronyism'

Scotland should use its tax-varying powers to drop its income tax rate below that of the UK’s in what would be an “innovative” move, a Scotland Office minister has said.

Malcolm Offord, who was appointed a minister during the Boris Johnson premiership, also rejected accusations of “cronyism” made by party colleagues.

In an interview with The Scotsman from the Arctic Circle Assembly in Reykjavík, Iceland, the peer challenged the Scottish Government to go further on tax cuts than the now U-turned plans from former Chancellor Kwasi Kwarteng.

Speaking prior to the wholesale U-turn by newly-elected Chancellor, Jeremy Hunt, which saw almost all of the mini-budget’s tax measures reversed, Lord Offord said the tax disparity between Scotland and the rest of the UK should be “immediately” addressed by the Scottish Government.

"We should be having a strategy to bring talent into Scotland”, he said, claiming people were disincentivised to move to Scotland and there was a need to increase the size of the private sector.

"Under the devolution settlement there is leeway on income tax of three pence in either direction against the UK tax rate.

"A business enterprise agenda that saw that tax being cut, perhaps even becoming lower than the UK, would be very innovative.”

He added: "It’s not right that Scottish people should be taxed more in Scotland just for living in Scotland.

Scotland Office minister, Lord Malcolm Offord spoke to The Scotsman last week.

"I feel strongly that they should have the same incentive to keep more of their own money.

"I feel strongly that we should be having a real growth agenda and enterprise agenda in Scotland to increase the private sector because the more the private sector grows, the more tax take we take into the Treasury, the more we can invest in public services.”

The peer also defended the decision by Liz Truss to go all-out for growth, despite the approach appearing to fatally wound her premiership.

He said support for energy bills, which will now only last until April rather than two years, was overlooked as the main, inflation-busting measure of the mini-budget.

Lord Offord, who worked in the City of London for 25 years before returning to Scotland to set up the private equity boutique Badenoch & Co, refused to say whether he would have sacked Mr Kwarteng had he performed so poorly at his company.

Despite repeating the Prime Minister’s explanation for the market reaction, that the groundwork for the mini-budget had not been laid well enough, the minister also claimed Ms Truss had in fact given people notice of her plans during the leadership campaign.

He said: “The big difference between her and Rishi [Sunak’s] leadership campaign was that Rishi’s said ‘status quo’ and she said ‘no, we need to be more bold and more daring than that, we need to go for growth and the way to do that is to cut taxes’.

"It’s not like it wasn’t highlighted or wasn’t forewarned.”

Lord Offord faced accusations of cronyism ahead of the 2021 Holyrood election when internal party critics fumed at his endorsement as a candidate from a key internal committee.

Asked whether he is a crony, the minister said “I don't recognise the term”, labelling the criticism “allegations of tittle-tattle”.

He said: “I absolutely reject any allegation of cronyism. It’s a matter of public record that I made some donations to the Conservative Party, they were done over a period of 15 years. I wasn't even a member of the Conservative Party when I did that and I did that purely as an ordinary citizen.

“One thing was to see that the Government of the day had a pro-growth agenda. There was no question of that being linked in any way to serving in Government and when the call came, I was more surprised than anybody and deeply honoured to be offered the chance.”

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