Westminster ‘has ruled out giving Holyrood corporation tax powers’

THE coalition government has privately ruled out Alex Salmond’s demand for Scotland to be handed control of corporation tax “under any circumstances”, MSPs have been told.

Dr Graham Gudgin, an adviser to Northern Ireland Secretary Owen Paterson, said the measure would not be added to the Scotland Bill delivering powers to Holyrood.

Linda Fabiani, convener of Holyrood’s Scotland Bill committee, is now writing to Treasury chiefs demanding an explanation, after previous claims that no decision had been taken.

“You’re telling me that UK government ministers are privately telling you that this committee is wasting its time talking about corporation tax?” Ms Fabiani asked Dr Gudgin.

The academic replied: “Yes.”

Ireland has a 12.5 per cent tax rate, less than half of the UK’s 27 per cent, and Northern Ireland wants control over this in order to compete. This has prompted SNP to warn that if Stormont gets control over corporation tax then so should Holyrood.

Dr Gudgin warned that if Scotland persisted with its demands, both countries could lose out.

“I’m quite concerned that the Scottish Government seems to blundering into this,” he said. A spokesman for First Minister Alex Salmond said last night: “It is extremely concerning that … UK ministers had never intended to even consider devolving corporation tax.”