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Prize is enormous says Tory leader

Davidson warns against tax hikes to boost services

Ruth Davidson

Ruth Davidson: “go for growth” (photo by Terry Murden)

Scottish Tory leader Ruth Davidson says economic growth – not higher taxes – is the way to boost public services in Scotland. 

Speaking at a business dinner she warned that there is growing danger that Scotland will get a reputation as “one of the most costly places to set up a business in the UK”.

Instead, she argued that Ministers should “go for growth” by backing competitive taxes to help boost Scotland’s economy, and fund schools and hospitals.

Quoting estimates from the Fraser of Allander institute, she said that if wages and tax revenues in Scotland grow above UK levels by just a small amount, Holyrood stands to benefit by up to £1 billion in extra tax revenue over ten years. 

Her speech to the annual dinner of the Federation of Small Businesses Scotland followed speculation that the SNP intends to raise income tax in next month’s Scottish budget.

This would follow similar rises in property and business taxes in recent years.

It also coincides with leading business figures such as the new chairman of the Scottish Property Federation warning that higher taxes could be a “barrier to investment” in Scotland.

Ms Davidson told guests at the dinner in Glasgow: “We want Scotland to stay competitive so that we are seen across Europe as a beacon for investment, and new business.

“The prize for getting this right is enormous. By growing the economy just half a per cent above UK levels, the Scottish Government could benefit by up to £1 billion by the end of this next decade.

“It is wrong to continually punish firms simply for having the audacity to set up shop.  Instead, we need to show that, here, in Scotland, we don’t sanction wealth creators, we support them – in the knowledge that it is only through their success – your success – that the public sector can thrive.”

In her speech, Ms Davidson urged all governments involved in the Brexit negotiations to “step up the pace” to ensure firms get the certainty they need to plan ahead.

Reflecting on the sexual harassment scandal, Ms Davidson added that politics needs “a change of culture”, with more women promoted into positions of power.

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