UK Government should devolve VAT and corporation tax to Holyrood, think-tank claims

The UK Government should devolve VAT and corporation tax to Holyrood, a think-tank has claimed.

Reform Scotland today published a range of policies shared by a mix of Scotland’s main parties in a bid to drive the Scottish Parliament away from arguing about the constitution.

The organisation calls for more financial powers for Holyrood following the UK’s departure from the EU.

Other policies include creating a new land use strategy, a feasibility study on pay-as-you-drive road pricing and directly electing mayors.

First Minister Nicola Sturgeon at the Scottish Parliament in Holyrood. Picture: PA

The report says: “The current financial settlement has left Holyrood hugely reliant on a single income stream with NSND income tax accounting for 65 per cent of all devolved revenue. Following the UK’s departure from the EU, VAT should be devolved to Holyrood.

“Corporation tax should also be devolved and the opportunity taken to design a tax policy that attracts more entrepreneurs and incentivises the creation and development of new businesses.”

The think-tank describes itself as a “public policy institute which works to promote increased economic prosperity, opportunity for all, and more effective public services”.

Reform Scotland also recommends allowing all children to take eight National 5 exams, setting a single date to start early years childcare, piloting the devolution of healthcare to local authorities, introducing a Basic Income Guarantee and banning short prison sentences.

The report also suggests Holyrood has not worked as well as it should have done.

The document explains: “The drawbridges have been hiked up and the parties have fought one another every bit as intensely as their equivalents do at Westminster.

“Committees have broken down along party lines, bad faith has usually been assumed, and the familiar witch-hunts have been undertaken, the usual resignations demanded.”

Chris Deerin, director of Reform Scotland, said: “Holyrood was supposed to be better than this.

“In the heady early days of its creation, there was both the sense and the intention that the Scottish Parliament would work differently to Westminster.

“There would be less of the two-swords-length approach to politics, more constructive working across party lines, perhaps even a longer-term view of the national interest.

“Apart from a few rare occasions, it hasn’t worked out like that.

“That’s why Reform Scotland has decided to publish a manifesto ahead of May’s election that explicitly proposes policies that might garner cross-party support.

“We believe each of our suggestions would improve the state of the nation a little and taken together would do a great deal of good”.

A UK Government spokesperson said: “Now more than ever, people in Scotland want to see the UK Government and the devolved administrations working together.

"The United Kingdom is the most successful political and economic union the world has ever seen. We are at our strongest when we work together. We need to focus on continuing to tackle the pandemic and rebuilding our economy.

“Through the Scotland Act 2016 we transferred a raft of powers to Holyrood, including on income tax and welfare, and as a result, the Scottish Parliament is now one of the most powerful devolved legislators in the world.”

The SNP have been approached for comment.

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