Next Scottish government urged to rule out further income tax rises
Scottish Financial Enterprise wants Scotland’s political parties to commit to a package of measures aimed at boosting growth
The next Scottish government should commit to a presumption against further income tax rises, a leading financial trade body has said.
Scottish Financial Enterprise (SFE) said ministers should also consider bringing senior business people into substantive roles in government.
The calls are included in a new manifesto produced by SFE ahead of the Holyrood election, which outlines a package of measures designed to make Scotland the “engine room” of the UK economy.
The trade body describes itself as the principle voice for Scotland’s finance industry, which is worth £17.7 billion to the economy and is by far Scotland’s most valuable export, according to recent figures from TheCityUK, which represents the wider UK sector.
The SFE manifesto calls on all political parties to commit to a presumption against further income tax divergence with the rest of the UK, as well as a wider simplification of the tax system to drive growth.
It says the next government should introduce a binding annual economic growth target, while also expanding the use of private capital in major infrastructure projects.
Elsewhere, it calls for a meaningful review of university and college funding.
The income tax gap between Scotland and England has long been a source of friction with business leaders.
Anyone earning more than £33,500 pays more income tax in Scotland than if they lived south of the Border. Someone earning £50,000 pays around £1,500 more, and a person earning £125,000 pays £5,200 more.
Sandy Begbie, chief executive of SFE, said: “The next Scottish government, whatever its make-up, has a huge opportunity to turbocharge economic growth in Scotland.
“That is why Scottish Financial Enterprise is calling for the introduction of annual growth targets, as well as a presumption against further tax divergence with the rest of the UK, as part of a package of measures to turn Scotland into the engine room of our economy.
“By following these measures, the next administration can not only stimulate growth, strip away red tape, and encourage investment – they can also fundamentally reset the relationship between business and government.
“Incoming ministers should also consider bringing senior business people into substantive roles in government, as many other countries with higher growth rates have successfully done.
“Only by working with Scotland’s world-leading sectors, including financial and professional sectors, can the next Scottish government deliver on its ambitions, boost growth and increase the tax revenues that support the public services on which we all rely.”
Miles Celic, chief executive of TheCityUK, said: “Scotland’s financial and related professional services industry is a major national asset, but there is no room for complacency.
“SFE’s manifesto builds on many of the themes from our ‘no time to lose report’ with PwC, which makes clear that against a backdrop of geopolitical and technological change, the UK must act with greater ambition and pace to reinforce its position as an open, internationally connected, world-class financial centre.
“Doing so could unlock over £53bn in additional annual economic output by 2035.
“By backing innovation and resetting the framework for growth through stable, predictable tax and proportionate regulation, we can unlock investment and deliver lasting benefits for households and businesses across the country.”
Comments
Want to join the conversation? Please or to comment on this article.