SNP needs to ditch high-tax ideology and listen to warnings from business

At times, it seems like the SNP views raising taxes as a good thing in of itself, a sign of a ‘progressive’ and ‘fairer’ society. However, since John Swinney became First Minister, there has been a welcome acceptance of the need to increase economic growth to deliver all the benefits that this would bring.

It is within this context that SNP ministers should listen to the words of Alastair King, the lord mayor of the City of London Corporation, about the problems caused by the higher taxes in Scotland compared to the rest of the UK. Anyone earning more than £30,318 currently has a higher income tax bill, with someone on £50,000 paying £1,527 more.

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‘A globally competitive world’

Speaking to The Scotsman at the first Global Investment Summit in Edinburgh, King said he had heard about financial sector workers choosing to live in northern England rather than Scotland and businesses struggling to recruit talented staff because of the “tax gap”.

“I think anything that stops the Scottish economy being as competitive is something that needs to be addressed,” he added. “We are in a globally competitive world... [with] a lot of people from around the world wanting to eat our lunch. I think, therefore, we've got to have a competitive tax system."

Persuading well-paid financial sector workers to live in England is no way to grow the economy or government revenues. SNP ministers need to give serious consideration to whether they have got the balance right and at least consider reducing the tax gap.

Otherwise, they may find they have angered voters on the right concerned about taxation and economic growth as well as those on the left dismayed by the state of public services like the NHS. We suspect many voters are increasingly questioning whether they are getting their money’s worth.