SNP’s corporation tax strategy faces resistance

A LEADING UK economist has warned that the SNP’s flagship plans to slash corporation tax would be strongly resisted by the European Union and the Westminster government.

Christopher Allsopp, a former member of the Bank of England’s monetary policy committee, said it was “likely” that the SNP would be unable to go ahead with its plans to reduce the tax in an independent Scotland due to opposition from the EU and the UK.

Mr Allsopp, a director of the Oxford institute of energy studies, made the claim during a Royal Society of Edinburgh conference on Scotland’s future relationship with the UK.

He said: “There has been a lot of talk about corporation tax, but there are likely to be objections from the European Union, as well as some Treasury resistance to having different corporation tax rates within the UK.

“Ireland has low corporation and this is a thorn in the flesh of Germany in particular.

“It would be quite controversial within Europe and within the UK.”

However, SNP MSP Stewart Maxwell, a member of the Scottish Parliament’s Scotland bill committee, defended the calls for corporation tax responsibilities and said that devolving the powers would help boost investment in Scotland.

He said: “Corporation tax is a vital source of competitive advantage in a global economy, which would allow us to boost investment, attract new businesses and take the right decisions for Scotland.

“There is clear evidence from around the world that a competitive corporation tax regime has been a feature of the economic success of many countries.

“There is no reason why Scotland would be any different.”

Andrew Whitaker