Policy defended

Scotland’s quality of life worth higher tax, says Flint

Douglas Flint at Abrdn AGM
Douglas Flint: no problems recruiting staff

Douglas Flint, chairman of FTSE 100 investment manager Abrdn, has offered a defence of the Scottish government’s higher income taxes.

Following yesterday’s AGM in Edinburgh, Sir Douglas was asked if the company had struggled to recruit top staff because of the differential in taxes between Scotland and England.

“No,” he replied bluntly, adding that he could see why some people would be attracted to Scotland despite paying more income tax.

“The cost of living is less. In terms of being able to just drive out of the city into the countryside, would you be willing to pay 1% more for that? Some people would.”

His comments came after claims that Holyrood’s higher income taxes will act as a deterrent to top talent being attracted to, or staying in, Scotland.

Research by Scottish Financial Enterprise found that more than 80% of financial services firms believed the tax divergence was routinely affecting their ability to attract and retain people north of the border.

Ryanair, the budget airline, told members of Holyrood’s economy committee that it was struggling to recruit engineers from other parts of the UK to work at Prestwick airport because of the tax burden, the Scottish Daily Mail reported.

New UK government data appears to disprove the anecdotal evidence, and indicates that thousands more taxpayers moved to Scotland than left each year in the period after the Scottish Government was given powers to change income tax.

The research showed that an average of 4,200 more taxpayers moved to Scotland than left every year from 2017-18 to 2021-22.

In the latter period alone £200 million in additional taxable income was brought into Scotland with more Higher and Top rate taxpayers moving to Scotland than leaving.

Shona Robison, the Deputy First Minister and Finance Secretary, said the research was “yet more proof that Scotland is an attractive place for people to live and work” and noted that £200 million in additional taxable income migrated to Scotland in the 2021-22 financial year.

“We know people base the decision on where to live on a range of factors, and by coming to Scotland they have access to a range of services and benefits not available elsewhere in the UK, including free tuition and prescriptions.”

SNP MSP Gordon MacDonald said: “I welcome this research which confirms what we already knew – that Scotland is an attractive place to live and work with a progressive approach to taxation that raises additional funds for public services.

“The figures debunk baseless Tory claims about Scotland’s progressive approach to taxation.”

However, a deeper diver into the research showed 1,030 higher earners have left Scotland to reduce their tax burden, equivalent to £61m in tax receipts.

A new Scottish tax band, of 45% on earnings between £75,000 and £125,140, came into force on 6 April. It means there are now six tax bands in Scotland.

AGM disrupted by protestors

A protestor unfurling a banner at the Abrdn agm

The Abrdn AGM at the Assembly Rooms in Edinburgh was disrupted as a handful of climate activists used their small shareholdings to gain entry and talked loudly over Sir Douglas Flint’s opening remarks. They were ejected by security guards.

The protestors were demanding the asset manager end investment in coal, oil, and gas. Outside the hall, protesters staged a ‘disobedience’ dance routine set to ‘Stayin’ Alive’  and unfurled banners reading ‘abrdoomed.’

Cathy Allen a retired teacher who also took part in the action, said: “Abrdn’s investment in coal, oil and gas is a one-way ticket to environmental and financial ruin.

“If they persist in financing fossil expansion, they’re steering their company straight into disaster. It’s time for Abrdn to wake up and smell the carbon emissions before it’s too late.”

Sir Douglas Flint and chief executive Stephen Bird both defended the company’s actions on reducing exposure to fossil fuel companies.

Sir Douglas said it was a complicated process, not least because many countries still depended on fossil fuels to power their economies. However, the company took its responsibilities seriously and was constantly engaged with companies to meet transition requirements.

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