Businesses ‘fed up’ with SNP tax and spending plans
Sir Tom Hunter says businesses are now “fed up” with the tax and spending policies of the Scottish Government who are failing to convince the public they are getting value for money.
The investor and philanthropist has accused the SNP-led administration of “frittering away” money on things like the ferries and the deposit return scheme.
Deputy First Minister and Finance Secretary Shona Robison is expected to announce a new tax band in Tuesday’s budget for those earning above £75,000 as ministers attempt to reduce a £1.5 billion deficit in the public finances.
However, economists have said it will raise as little as £40 million and will not head off cuts in services. Some senior MSPs on the government benches, including former Finance Secretary Kate Forbes, oppose the tax plan.
Alarm has grown over government spending policies including the mounting bill for new ferries, which has ballooned above £300 million, together with money spent, and not recovered, on the failed deposit return scheme. Millions have also been spent trying to prop up struggling businesses such as Burntisland Fabrications and Prestwick Airport.
There are wider questions about the wisdom of universal free prescriptions and travel, which many people would be willing to pay for, while the promise of free university tuition is being severely tested and may be revisited in Tuesday’s announcement. First Minister Humza Yousaf has also placed local authorities in a financial bind by freezing council tax.
Sir Tom, speaking to Daily Business yesterday, said: “The government needs to ask whether it is providing value for the money it is spending.”
Saying he was against” the introduction of a new tax band, he added: “We need to look at how much is raised from the tax base and how we spend it. At the moment they are frittering it away on things like the ferries and the DRS. We need to be sure we are getting value for money.”
He added: “The business people I have been speaking to are really fed up with this now.”
There have been warnings that the higher taxes paid by those at the top end of the earnings scale will deter top talent staying in Scotland or being attracted to the country.
Sir Tom shared the view of Mairi Spowage, director of the Fraser of Allander Institute, who said higher taxes were more likely to deter potential incomers, while those already here would probably adjust their working arrangements to reduce their tax bill.
“It is not the people who are here that this will affect, it’s people we want to attract,” said Sir Tom. “If someone has a choice of going to Manchester or Birmingham where they will pay lower taxes then they may just do that. This is the tone that is being set.”
He said yesterday that he had spoken to the First Minister about his call in August for Scotland to be turned into a 15% corporation tax zone for three key sectors in order to stimulate its lacklustre economy.
He wanted a targeted tax cut in renewables, life sciences and big data – three sectors which he believes could be global winners for Scotland.
“I went to see the First Minister who said it was a good idea and he would write to Rishi Sunak about it.
“Is that because he knew it would get buried?”
Meanwhile, the Institute for Fiscal Studies has raised questions about free university tuition in Scotland, saying in a blog that preserving the current model will be increasingly difficult given the financial pressures facing the Scottish government.