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Chambers boss calls for 'step change'

Warning to Holyrood: ‘higher taxes will drive away talent’

Liz CameronA warning has been fired at politicians not to drive talent away from Scotland by imposing taxes that make it less competitive than the rest of the UK.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the new intake of politicians will require a “different mind-set” to look at what is desirable and what is achievable.

The Chambers’ Sustaining Growth, Supporting Business campaign sets out the key priorities for Scotland’s businesses over the next five years.

It says the next Scottish Parliament will be the first to wield extensive powers to raise revenues in Scotland as well as to spend them and this “fundamental change in the dynamics of the powers of the Parliament must result in a step change in the approach of our politicians to their job and a recognition of the potential impacts to Scotland’s economy.”

Parties have been setting out their tax plans, with Labour and the Lib Dems pledging to increase income tax and the SNP saying it will not raise the threshold for higher rate tax payers in line with those south of the border.

Ms Cameron said: “The Scottish Parliament is 17 years old.  It is now an established institution in Scottish life and in the Scottish economy but over the next few years it will progress its transformation from a body charged with spending taxpayers’ money in Scotland to one which is responsible and accountable for raising a large part of that money too.

“That transformation will require a different mind-set from our politicians – one which understands the need to balance what is desirable with what is achievable in a way that our devolved Parliament has never done before.

“In terms of the Scottish economy, the Parliament will now have more powers to help make us the most competitive and attractive region of the UK in which to do business.

Copywriting 3 72dpi bigger with outlines“The starting point should be to ensure that our rates of personal taxation are at least as competitive in Scotland as in any other part of the UK – if it isn’t, it could drive valuable talent away from Scotland and act as a barrier to attracting new investment in our economy.

“We must also recognise that our business rates regime is becoming less competitive than other parts of the UK, particularly for medium and large businesses.  We welcome plans to reform the Rates system in Scotland but this must be considered alongside the range of other business taxes and the end result must be to deliver a system that is fair and efficient.”

She added: “The Scottish Parliament must also flex its muscles with the Treasury and seek new solutions on taxes which remain reserved.  For example, our tourism industry should benefit from a lower rate of VAT, just like their competitors in 25 other EU nations currently enjoy.  The Scottish Parliament is coming of age and must act responsibly in the interests of our economy.”

Scottish Conservative leader Ruth Davidson said:  “This is a hugely important intervention from one of Scotland’s most prominent business figures.

“Liz Cameron could not be clearer: higher taxes will drive out talent from Scotland and deter investment and jobs from coming here.

“Her comments are a wake up call to Labour, the SNP and the LibDems. They have used this campaign to wage an irresponsible and cynical bidding war over who can increase tax the most – with no regard whatsoever for the destructive impact this will have on jobs and the economy.

“Their proposals to make Scotland the highest taxed part of the UK are irresponsible and completely wrong-headed.

“We need a plan for jobs, not a plan for ever higher taxes. I can assure people that the Scottish Conservatives will campaign hard in the next Scottish Parliament to make the case for fair and competitive taxes not just because taxpayers deserve a break, but because – as Liz Cameron says – it is the best way to keep our economic recovery on track.”

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