Exclusive:SNP must narrow Scotland-England income tax gap in Budget, says City of London
The City of London Corporation said there were ongoing concerns in the financial sector
SNP ministers should act to narrow the income tax gap between Scotland and England when they set out their spending plans later this year, the governing body for London's financial district has said.
Chris Hayward, policy chairman at the City of London Corporation, said there were ongoing concerns within the financial sector over the tax regime. He is due to meet First Minister John Swinney today.
Senior business figures have repeatedly spoken out against Scotland’s income tax policy. Anyone earning more than £28,867 in Scotland pays more than they would elsewhere in the UK.
Those earning £50,000 pay £1,542 more, while someone earning £200,000 pays £7,478 more.
Mr Hayward previously said the income tax disparity north and south of the Border was a source of “significant concern” in the financial sector and a “risk to Scottish jobs”.
Asked if this remained the case, he told The Scotsman: "Well, it hasn't changed, and that's a matter for the Scottish Government, not for me, obviously. But do we have concerns about getting high quality skills, top-end skills in Scotland, staying in Scotland? Yes, because the tax regime as it stands isn't necessarily helpful to that. But that's a matter for the Scottish Government to deliberate on and decide on.
"I think it's been said not just by me, but by many of the financial services sector up here in Scotland that they have concerns about that, and so I'm sure it will come up in my discussions with the First Minister."
Asked if he wanted to see movement on this issue in the Scottish Budget on December 4, Mr Hayward said: "I think, on behalf of the sector, yes I would like to see some movement.
“But there are many priorities for government to focus on, of which this is one, but it's not the entirety, and of course it must be for the Scottish Government to make the decision as to where its balances of priorities are when it comes to its Budget.
“It's not for me to advise the First Minister or the Scottish Government on that, other than to express the view that yes, I think it would be helpful if there was some movement on this issue."
Mr Hayward added: "The Scottish financial sector wants it. They've said that openly, and we support that view."
The last Scottish Budget saw the creation of a new income tax band for those earning between £75,000 and £125,140, while the top rate rose by 1p in the pound. The threshold for paying the higher rate of tax was frozen at £43,663.
Last year, Judith Cruickshank, managing director of commercial mid-market at the Royal Bank of Scotland, raised concerns that workers in the financial sector were choosing to live in northern English cities rather than move to Scotland where they would pay more income tax. Edinburgh has the second biggest financial services sector in the UK.
Elsewhere, Mr Hayward said he wanted to build on an existing partnership agreement between the City of London and the Scottish Government.
"What I'm going to be saying to the [First Minister] is how do we put some measurable objectives, which have metrics attached to them, on to that partnership agreement?” he said. “Things that will actually benefit Scotland and the Scottish economy, and also, of course, because it's a partnership agreement, will help us in the City of London as well.”
He also spoke about the importance of private finance when it comes to meeting net zero commitments.
"The key to getting to net zero is to attract private finance,” Mr Hayward said. “Public finance alone cannot solve net zero.
"And the way you attract private finance is first of all, you need stability and continuity in government policy, whether its government policy in the Scottish Government or it's government policy from the UK Government. And frankly, we haven't always seen that, and I think that that does not build confidence in the private sector to invest in net zero.
"So what I would say to both governments is, now we've got a Labour Government in power with a large majority in the United Kingdom, we've got five years potentially, therefore, of political stability - what we need to see is five years of consistency towards net zero.
"Because net zero is a challenge not for either government - it's a global challenge, frankly, and it's one which we have to play our part in in the United Kingdom. We have some of the best green finance products in the world. We need to be shouting about that. We need to be really driving the case for investment in net zero, and what I would like the governments to do is to re-pledge themselves, both governments, to that commitment for net zero by 2050."
The UK Government has committed to reaching net zero by 2050, while the Scottish Government’s target is five years earlier.
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