By Keith Aitken in Edinburgh | 29 May 2013
First Minister Alex Salmond’s plans for an independent Scotland to stick to sterling and slash corporation tax have come under fresh fire.
A survey by the Scottish Council for Development & Industry, a broad-based economic lobby whose members range from trade unions to financiers, found little support for Salmond’s plan to aggressively cut corporation tax to attract investors. But members did accept the need for Scotland to control its own policy levers and to remain in the sterling currency area.
However, economists Jim and Margaret Cuthbert , whose paper was published last month, backed a separate currency as the best option for Scotland in the event of a 'yes' vote at next year’s referendum. The two economists, who are often quoted with approval by Salmond and his ministers, say only ‘token’ independence could be achieved if Scotland remained subject to Bank of England discipline in the sterling zone.
Although the SCDI is more business-driven than it used to be, it remains a popular economic voice with ministers, and Finance Secretary John Swinney welcomed the survey findings that matched Scottish government policies, such as keeping the pound. But the survey found little support for Salmond’s plan to undercut corporation tax rates in competitor countries, including the rest of the UK, to lure inward investors. SCDI members thought that UK Chancellor George Osborne’s programme for lowering the UK rate from 23% to 20% meant that Scotland had missed that boat.
‘No particular consensus was detected for a significantly lower tax environment,’ the report says.
‘Most respondents articulated the desirability of a wider business environment that ensures we can invest appropriately in good infrastructure, skills and education to support the economy’s long-term needs.’
Meanwhile, contributing a chapter to the Scotland’s road to socialism, a Left-wing anthology edited by Professor Gregor Gall, the Cuthberts wrote: ‘If Alex Salmond were to win a “yes” vote in the referendum, what he would have would be a mandate to negotiate for the establishment of something far short of any meaningful concept of independence.'
They add: ‘If Scotland wants to have the Bank of England as lender of last resort, then Westminster could not possibly agree [to greater economic independence] without binding up Scotland in fiscal ties which would radically limit its right to borrow, or to pursue an independent taxation policy.
‘So it is just not feasible that anything approaching independence can emerge from the current referendum.’
