Avoid tax divergence and be ‘pragmatic’ on nuclear, next government urged

Business leaders have challenged the next Scottish government to avoid “harmful” tax differences with the rest of the UK, while also adopting a “pragmatic” approach to nuclear power.

CBI Scotland insists having higher income tax rates for higher earners in Scotland is making it harder for businesses to recruit – saying this in turn is forcing talent south of the border.

In an election manifesto issued ahead of May’s Scottish election, the business organisation said the next government must have a “clear strategy that avoids harmful divergence with the rest of the UK”.

It further called for business rates to be modernised, as well as saying there is a need for a “more pragmatic approach to nuclear energy” – after SNP ministers steadfastly refused to back the construction of new nuclear power stations in Scotland.

With the UK Government seeking to invest in new nuclear technology as part of its push for low carbon energy, businesses say Scotland’s position should be reassessed “to ensure the country does not miss out on the jobs and investment”.

CBI Scotland also wants the next Holyrood government to deliver an improved skills system, as well as expanded funding for childcare so families can receive help for infants from the age of nine months.

By doing this and mirroring the expansion of childcare funding support provided in England, the business group said around 2,200 people a year could be helped to return to work – boosting Scotland’s economy by £80 million a year.

There is also a call for the next administration to deliver a Clyde Metro link between Glasgow – Scotland’s largest city – and Glasgow Airport, saying this would be a “transformational project for growth and connectivity”.

Speaking as the manifesto was published, CBI Scotland director Michelle Ferguson said all political parties must “stay laser-focused on pro-enterprise policies that will boost prosperity across every part of the country”.

Adding the May 7 election “must become a line in the sand”, she insisted Scotland’s existing set up for taxation, infrastructure, education and skills “simply isn’t good enough”.

Ms Ferguson said: “For too long, Scotland’s households and businesses have been shortchanged by an economy that has fallen short of our ambitions.

“We need all parties competing at this election to recognise that growth really is the only game in town and that they need to stay laser-focused on pro-enterprise policies that will boost prosperity across every part of the country.

“Tax and regulatory drift, creaking infrastructure and an education and skills system that isn’t meeting the needs of business simply isn’t good enough.

“Not only does it restrict investment and growth at a domestic level, but it makes us less attractive to the global talent and investment we need to thrive in the years ahead.

“This election must become a line in the sand. A moment when we start to match our ambition for a high skilled, high growth, digital economy with the action needed to make that a reality.

“The key to success lies in every party’s manifesto – business is committed to that goal and simply wants our political leaders to pledge to joining us on that important journey.”

Deputy First Minister Kate Forbes insisted the “SNP is the party of business”, adding: “Under John Swinney’s leadership, our economy is one of the best performing areas of the UK with business investment in Scotland at a 20-year high.

“Global credit rating agencies recently praised Scotland’s prudent fiscal management under the SNP, and we’re outperforming Labour-run England in a series of key areas – but we know there’s more to do.

“Growing the economy and supporting businesses to prosper are top priorities for the First Minister – this will be reflected in next week’s Budget and our party manifesto later this year.

“Businesses are still reeling from the impact of Brexit and on top of that Labour has piled on pressure for small businesses with their thoughtless national insurance hikes.

“Decisions taken by governments in Westminster are holding Scottish businesses back – the SNP is the only party that wants to rejoin the European Union and regain access to the world’s largest single market.”