Governing is not easy, cutting taxes in Scotland is even harder - Brian Monteith

A few people maybe gagged on their granola and dropped their iPads in the shock of it all. Conservatives, never mind the McChattering classes, have heard such blasphemy for what seems like an age, but nevertheless Murdo Fraser MSP used his regular Scotsman column to provoke a battle of ideas during his leadership bid for the Scottish Tories.

In a normal balanced world such a suggestion should not really be that surprising. To paraphrase the standard financial services warning, taxes may go down as well as up, although we have rarely experienced the former notion coming out of the Edinburgh parliament, but thanks to the SNP government have often experienced the latter.

Yet in democracies throughout the world cutting personal or business taxes – or even both –has been tried with notable benefits to economic growth and the generation of higher disposable incomes, so why have we not heard such an idea regularly, maybe even in a Scottish election campaign?

One of the reasons many in conservative circles were relaxed about or even advocated the extension of tax-raising powers for Holyrood was the hope it could help shift Scotland’s political debate away from focussing on what parties were proposing to spend public funds on – and towards how lower taxes tax could create a more dynamic and fast-growing economy that would raise living standards and generate higher tax revenues for public services.

Unfortunately, despite a gradual but significant extension of powers so Holyrood could set the UK’s tax rates differently in Scotland, there has never been a subsequent Conservative election campaign with a serious attempt to advocate reductions in business or personal taxes. The philosophical case for a lower-taxed economy has simply never been made.

Instead, for the last ten years the focus of the Scottish Conservatives has been on becoming the best channel for voters wishing to stop a second independence referendum. In that regard it enjoyed some success, eventually becoming the leading opposition in Holyrood and in the process elbowing out Labour and the Liberal Democrats.

Yet for all the Tory chest-beating and chauvinism that such results generated everyone of any political hue or none who considered the matter seriously knew that it was, ultimately, a political cul-de-sac. The longer the journey down the policy-free cul-de-sac carried on then the longer it would take to return the normal highways of finding an attractive platform that generates hope and inspires people.

Although many could see the coming Conservative collision with reality, it finally arrived in July’s general election when, alongside the SNP’s demise, the Tories suffered a huge fall in vote share and the loss of more deposits than new kids on the block, Reform UK. More significantly, Labour mopped-up the disdain towards the SNP and dominated the Scottish political scene once more.

It is not good enough nor would it be justifiable to blame Westminster Conservatives for the Scottish Tories’ electoral mugging. The point is the party of Ruth Davidson, Jackson Carlaw and then Douglas Ross had opportunities to develop an entirely different brand of conservatism in Scotland, one that rejected the big state, high tax centrism of Cameron, May, Johnson and Sunak, and instead advocated making Scotland the most attractive economic location in the United Kingdom.

All that was on offer were warnings about higher Scottish taxes driving out many of our most talented people and businesses to the south – or beyond the UK altogether. Looking through the other end of the telescope would have encouraged Scots Tories to reveal that had Scottish taxes been lower, then the talented individuals and business investment would be coming here, to Scotland, to everyone’s benefit.

Irrespective of their personal choice for Tory leader, those who wish a more prosperous Scotland – one that is able to raise more revenues to save our public services – should be glad to see Murdo Fraser revive the idea of cutting Scottish taxes. Hopefully Murdo’s opponents might welcome it and join him in advocating it too.

That, however, cannot be the end of the story. It is easy to put forward ideas but it is far harder to govern.

If cutting taxes in Scotland is to progress then those advocating the prospect have to demonstrate how they would procure such a change. While I hold to the view of economist Arthur Laffer that it is possible to cut marginal rates of tax so greater revenues can be obtained, there can be a time lag of a year or two when the public or business behavioural response has yet to work its way through to the treasury. This is in part why it is thought necessary and wise to show how tax cuts will be funded by making savings in previous revenues being foregone.

The lack of such estimates is one reason why Liz Truss was incorrectly blamed for crashing the economy. (The economy did not crash and blame for interest rate increases and a gilt crisis lay predominantly with the Bank of England acting outwith her control.)

The Scottish Conservatives should first show how they would level-out Scotland’s tax rates with those of the rest of the UK, before then going on to advocate which lower rates of some taxes could improve economic outcomes. But they must also embrace prudence, and that requires them to say where the savings on the SNP’s massive expenditure could be found. It is hard and brave work, but real politics is never as easy as coming up with slogans.

Brian Monteith is a former member of the Scottish and European parliaments and editor of ThinkScotland.org