07 June 2010
Business leaders in Scotland are divided over how far the UK government should go in giving the devolved Holyrood Parliament extra powers over taxation.
The differences of opinion emerged after prominent business figures launched a campaign for Scotland to be given more tax powers than those proposed by Sir Kenneth Calman’s Commission on Scottish Devolution.
The Campaign for Fiscal Responsibility said this week that it had received an ‘encouraging rush of support’ since it officially announced its initiative on June 3.
It argued that the Calman plan to give Scotland control over a 10p share of income tax does not go far enough.
Ben Thomson, chair of the independent think-tank Reform Scotland, which is co-ordinating the campaign, said early responses had been ‘extraordinary’.
‘It would appear there is a real groundswell of opinion in favour of giving Holyrood responsibility for raising, as well as spending, the money it receives,’ he said.
Members of the CFFR believe the Calman proposals are ‘flawed’ and could ultimately be damaging to the Scottish economy.
It wants the Scottish Parliament to have the power to raise most of its own taxes, saying this would lead to improved public services and create more and better jobs.
However, the leading business organisation for Scotland, the CBI, warned that fiscal autonomy would carry undoubted costs and risks for the Scottish economy.
It called on all those who support such a regime ‘to make much more detailed and sophisticated arguments in support of their case’.
Director Iain McMillan said: ‘Fiscal autonomy means that the UK’s unitary tax system would become fragmented and businesses’ compliance costs would increase as a result.
‘Scotland’s tax income would in future need to cover all our expenditure, which currently it does not.’
The Institute of Directors in Scotland, along with bodies representing voluntary organisations, churches and trade unions, have signed a letter urging caution on rushing ahead with the Calman plans. It welcomed the UK coalition government’s commitment to enhancing the powers and responsibilities of the Scottish Parliament, but warned: ‘The central part of such a Bill – whether and to what extent to give the Parliament tax-raising powers – is shrouded in uncertainty.’
