Exclusive:Sir Tom Hunter's plan for 15% corporate tax zone to save Scotland from 'appalling legacy'

The next generation of Scots will be forced to contend with "an unbelievably appalling legacy" unless action is taken to turbo-charge the economy, Sir Tom Hunter has warned.

The entrepreneur accused SNP ministers of stifling growth and said businesses are now paying a "location premium" to attract talent into the country due to "one of the highest tax regimes in Europe".

He suggested learning from Ireland and introducing a 15 per cent "corporate tax zone" for key global growth sectors such as renewables, life sciences and AI.

Sir Tom Hunter | PA

Writing exclusively in The Scotsman, Sir Tom said: “It’s time for a grown-up debate and action over how we make Scotland an economic powerhouse. We need to stop doing those things that don’t add any value and focus on what delivers. Otherwise, with a ticking demographic time bomb, we will leave an unbelievably appalling legacy for the next generation of Scots to contend with.”

Sir Tom, one of Scotland's most prominent businessmen, said it was “time to stop moaning and start fixing” as he set out a series of suggested reforms.

On tax, he said: “I know from my own experience and that of many other entrepreneurs, we are now paying a location premium to hire anyone into Scotland. People will not leave in droves, but nor will they arrive in droves either unless business pays a premium, therefore reducing its competitive advantage.”

He added: “It’s the tax take, not the tax rate, that pays for our public services. So my suggestion to Holyrood and Westminster – make all of Scotland a 15 per cent corporate tax zone for three key global growth sectors: renewables and low-carbon manufacture and services; life sciences and medical technologies; and software, big data and AI.

“The Irish experience tells us we will net more tax, more jobs and more value from this highly focused approach with one agency in charge of its delivery, than we will with our current strategy.

“Our governments should concern themselves with tax revenue, not the tax rate. If Labour put taxes up, they will without doubt stifle growth and our SNP Government have already been doing that.”

Elsewhere, Sir Tom advocated “aligning education to economic development and job skills” and took aim at government inefficiencies and the size of the public sector.

“Not only do we have more public sector employees in Scotland, they are better paid,” he said. “The Scottish Fiscal Commission noted last year that ‘the median pay for a full-time public sector employee in Scotland was £2,400 higher than in the UK’.

“Five years ago, it was £700. We pay more and get worse results than the rest of the UK. Don’t get me wrong, we should pay our public servants well for effective delivery.” He called on governments to “look within yourselves and drive efficiencies”.

Meanwhile, Sir Tom said there was a housing “crisis” and advocated “a fast-track planning system”.

He said: “BrewDog took two years for a planning application in Edinburgh and one month in the US where they paid extra for an expedited process. Ours is a non-planning process.”

He called for “a sensible scheme that protects those in rental accommodation, but does not debilitate investment in new house building – numerous pension funds simply won’t look at investing in Scottish housing until they know there is stability and an investable proposition”.

Conservative MSP Liz Smith, her party’s finance spokeswoman, said: “Sir Tom Hunter’s diagnosis of, and remedy for, Scotland’s ailing economy is an accurate and devastating critique of SNP governance.

“Growth has flatlined under the nationalists because their high taxes are deterring entrepreneurs and investment. Scotland is crying out for a greater focus on growth, coupled with reform of our bloated public sector.

“We are in the midst of a housing emergency, yet SNP policies have actually reduced supply and driven up rents.

“It’s high time the SNP got out of their Holyrood bubble, listened to one of our most successful businessmen and philanthropists, and got Scotland moving again.”

Deputy First Minister Kate Forbes said: “Economic growth is a key priority and ministers are working hard to maximise the economic opportunities that lie ahead.

“Scotland has the potential to be one of Europe’s fastest-growing start-up economies. I look forward to continuing working with Sir Tom Hunter, and private and public partners across the country, to continue supporting our entrepreneurs and start-up businesses scale-up, succeed and flourish.

“We will continue to keep our tax policy under review to ensure it delivers for taxpayers and the wider economy.”