The logic behind the SNP’s proposals for devolving Corporation Tax can be summed up as follows – ‘Scotland needs more jobs, a reduced Scottish business tax would create jobs, ergo, Scotland should have power of Corporation Tax’.Â
If it was an attempt at a mathematical proof, my old uni lecturer would tell me it was so sieve-like that it’s only good for rinsing potatoes.
Â
No, for me it’s a backwards step and the downsides of Scotland having one (lower) tax take and rUK having another are as follows:
1 – George Osborne is already cutting Corporation Tax so any further reduction north of the border would simply be a race to the bottom. If zero-tax is a terrible idea then too low tax is certainly not a good one.
2 – There is no guarantee that benefits will outweigh the expense. Scotland could be left with a bloated public sector and a lower private tax take with which to finance it. Dare I mention Ireland?
3 – Did we vote for this? The SNP may have a majority at Holyrood but I can’t remember this being discussed. There’s a lot of high-fallutin’ talk about Calman this and autonomy that but paltry tax-raising powers only scraped through with a Yes vote 14 years ago so I just hope ‘the people’ don’t get left behind in these debates and decisions.Â
4 – So much for we’re all in this together. The naked opportunism of this move hardly suggests that Scotland is a team player within the UK. The SNP’s tactics are beginning to sit awkwardly against Cameron’s admittedly occasionally abandoned ‘respect’ agenda.
5 – Scotland should be looking for companies to invest here because they are impressed with Scotland’s skills, workforce, R&D and location, not to mention proud of putting a fair share of profits into society. They shouldn’t be investing here just because there’s a 20% deal going. This isn’t GroupOn. Â
#1 by Gryff on August 17, 2011 - 9:43 am
Talk of changing Corporation tax is very worrying to me, for every firm attracted to Edinburgh instead of London I worry that one will be attracted to Paisley instead of Bradford, or Glasgow instead of Manchester. Perhaps I only think like this because I am instinctively British, but I am not happy with the idea of Scottish growth, or indeed independence being directly to the cost of the North of England.
#2 by Colin on August 18, 2011 - 12:57 pm
Mercantilism as an economic theory was destroyed in 1776 when Adam Smith published the Wealth of Nations.
Your critique of lowering corporation tax rests essentially on the medieval mercantilist principle that there is a fixed amount of wealth in the world and that someone can only become richer if another becomes poorer (or one nation can only become richer if another nation becomes poorer).
The cause of countless conflicts and hundreds of thousands of deaths, it turns out that this principle is completely false.
#3 by Indy on August 17, 2011 - 9:53 am
Did we vote for it? Yes. Maybe you should do a critique of the actual consultationl paper issued by the SG? Because I don’t think you necessarily have got the logic of it.
http://www.scotland.gov.uk/Resource/Doc/919/0120242.pdf
#4 by Social Democrat on August 17, 2011 - 10:19 am
@Gryff
Not enough companies are being attracted to Edinburgh, Paisley and Glasgow. The answer surely is not to allow this to continue with the associated detrimental impacts for social justice and the economy out of a sense of warped solidarity which contends that there are poor people in Bradford, so we should be poor too.
Forgive me for using your words to paint an alternative scenario:
“Talk of changing Corporation tax is very worrying to me, for every firm attracted to Oslo instead of Stockholm I worry that one will be attracted to Stavanger instead of Orebro, or Bregen instead of Gothenburg. Perhaps I only think like this because I am instinctively Scandinavian, but I am not happy with the idea of Norwegian growth, or indeed independence being directly to the cost of Sweden.”
The point is Norwegian growth and independence has not been to the detriment of other Scandinavian nations so why should this be the case for the British nations?
For those who oppose the Scottish Government’s plans to enhance the economy in Scotland through corporation tax I would ask them to rise to Tom Hunter’s challenge as articulated in The Scotsman this morning to “to come up with alternative ideas to stimulate… a moribund economy”
As Tom Hunter said himself: “We have a chance here to build a nation that in its own small way can lead the world. Frankly, I’m tired of the advocacy around the status quo, we’ve had that for decades and we track backwards not forwards as a nation.”
The time for “we cannae do it” is over. If there is an objection to a suggestion to stimulate the economy let’s hear what the workable alternative is.
#5 by Jeff on August 17, 2011 - 10:41 am
Of course, the four Scandinavian nations have broadly similar Corp Tax rates ~27% (higher than the UK’s) as they astutely recognise that a race to the bottom would take place to everyone’s detriment if one nation started undercutting a neighbouring nation.
Mentioning Scandinavia isn’t always a free pass to winning an argument in favour of independence, which is all this Corp Tax business is about anyway, if we’re honest about it.
#6 by Indy on August 17, 2011 - 11:25 am
The UK Government is already consulting on devolving corporation tax to Northern Ireland. If Northern Ireland can vary corporation tax Scotland should also be able to do so – and so should Wales.
Between them, the respective devolved administrations should be able to work out a way in which they will not undercut each other but can focus on giving themselves a competitive advantage against the south east.
I don’t see how you regard that as unfair – it is hardly “fair” that the vast majority of both public and private sector investment is focused on London and the south east. But that’s the way it is. Why should the Celtic fringe nations be denied the right to carve out some kind of an economic niche for themselves which allows a bit of healthy competition?
#7 by Angus McLellan on August 17, 2011 - 6:32 pm
They may have broadly similar headline rates but they have very different ways of calculating liabilities and consequently considerable variation in effective rates when seen from an investor’s perspective (from 40% in Finland to 55% in Denmark). As usual, information is available from the OECD. If I understood the Institute for Fiscal Studies’ Mirrlees Report suggestions on corporate taxes (which is far from certain), they seemed quite keen on something like the Norwegian “shareholder model”. So the headline rate is not all that important, either for business or investors. What matters more is how allowances for investment and depreciation are handled and how taxable profits and dividends are calculated.
Of course the likelihood of the Treasury and the Unionist parties ever coming up with a scheme to devolve taxes – not just corporation taxes but any taxes – which works well and allows more than just headline rate changes is vanishingly small. Take the SVR and Calman on income tax as examples.
#8 by Dougthedug on August 17, 2011 - 10:36 am
1 – I can’t see the logic here. Zero tax is bad because the Government gains no revenue at all but 100% tax is bad because the company makes no profits at all no matter how well it does so the most effective tax is somewhere in-between. The trick is to set the tax level to it’s most effective level.
2 – Lowering corporation tax isn’t a one-off event. If it does work it will be beneficial. If it doesn’t work then they can just bring it back up again.
3 – The logic of this says that unless it was in the manifesto then the Government can’t do it. I’ve never heard of that rule before but luckily it was in the manifesto so it doesn’t apply.
Page 3
“With the support of Scots in this election we will press for improvements to the current Scotland Bill to bring greater financial responsibility to the Scottish Parliament. This will include responsibility for Corporation Tax…”
Page 28
“The UK government is currently considering Corporation Tax devolution for Northern Ireland and we will press the case for Scotland too.”
4 – If the SNP was about team-playing in Britain it wouldn’t be trying to remove Scotland from the Union and I wouldn’t be a member.
5 – If Scotland had skills, workforce, R&D and location and a 100% Corporation tax no-one would dream of coming here. Stop pretending that tax isn’t a factor that companies take into account when the locate to various countries.
#9 by Dr William Reynolds on August 17, 2011 - 10:46 am
Jeff ,of course there are pro’s and cons to all decisions.However for me,the issue is about when a Scottish government will gain control of the economic levers,necessary to create jobs.You believe it is a backward step,fair enough ,we need to agree to disagree.
I am not interested in damaging the economy of other countries but I believe that the nation of Scotland should have full fiscal autonomy.As for being a team player,I am all for colaboration with other nations within the UK,but find it odd that being a team player makes it necessary to allow the economic levers for growth to remain in London.I guess that is because we are different.I see Scotland in the same way as I view my wifes nation of Finland.finland has fiscal auronomy but is a good team player within the Scandanavian block of countries.The view that Scotland needs full fiscal autonomy is supported by leading Scottish business men,who are more able than I am to explain why it is needed.
#10 by Jeff on August 17, 2011 - 10:55 am
Happy to agree to disagree but answer me this if you will. You are the MP for Newcastle/Liverpool/Manchester and a few miles up the road in Scotland Corporation Taxes have just dropped 10%. What do you do? Campaign for similar rates in Northern England?
Cameron decides to give into popular demand and the UK suddenly has Corporation Tax rates of 15%. How does Scotland get its competitive advantage then? Dropping rates again?
An independent Scotland should be thinking in, at least, a European context and trying to get one over on everyone else isn’t the way to do it. Harmonised tax rates across the EU is surely the goal to drive up standards and equality so, without sounding too much like Dragon’s Den, with this offer from the SNP, I’m moving closer to out than in when it comes to independence.
#11 by Indy on August 17, 2011 - 11:29 am
Post independence I would probably agree – but we are at least about five years away from independence – and they are going to be five ery tough years for jobs and the wider economy as the public spensing squeeze starts to bite.
#12 by Indy on August 17, 2011 - 11:53 am
So how would you answer the director of a company in Stornoway who asks you why it is fair that their company has to pay the same headline corporation tax rate as a company based in London?
#13 by Doug Daniel on August 17, 2011 - 12:06 pm
Harmonised tax rates across the EU is surely the goal to drive up standards and equality
Why stop at tax rates? Why not just go the whole hog and have a single EU economic policy? The thing is, the countries of the EU are all different, and have a variety of things going for them. For some, a lower tax rate is the best way of levelling the playing field against countries like Germany.
Besides, it’s all very well talking of Scotland not being a team player if it goes and undercuts England’s tax rates, but I’ve seen little evidence of Westminster trying to encourage businesses away from the South East of England and into places in Scotland, Wales and the north of England that need these businesses more than the South East does.
You are the MP for Newcastle/Liverpool/Manchester and a few miles up the road in Scotland Corporation Taxes have just dropped 10%. What do you do? Campaign for similar rates in Northern England?
Well, yes, quite frankly. We all know England is a very unbalanced country anyway, and who says tax rates have to be uniform from north to south? Why can’t Westminster have lower tax rates in the north of England to try and encourage less concentration of businesses in the south east?
Of course, we all know the answer – because that’s where the voters they truly care about live. But why should Scotland suffer as a result, when there is something it could do to rectify the situation?
#14 by Dr William Reynolds on August 17, 2011 - 12:09 pm
Jeff,I fully believe that the nations within the British isles are capable of working together and supporting each other.If the parliaments for each nation were equal in terms of economic decision making powers this is a reasonable assumption.As you point out ,the Scandanavian countries comprised of four equal parliaments (in Oslo,Stockholm,Copenhagen &Helsinki) are quite capable of working together to set rates of corporation tax.However,the Scottish,Welsh and NI parliaments are not the equal of Westminster.Economic decisions that effect growth in the nations who only have parliaments with limited powers,are taken in Westminster.This can be problematic when economic decisions taken in London,harm the economies of the other nations.
Since all parliaments in the Scandanavia block are equal,a single country can deviate from the rest,should it be in the national interests.That was my point.Collaborating and being a team player works when you have the freedom and power to make your own decisions.Scotland is not in that position.
Regarding your assertion that the SNP is wrong on corporation tax,well it is a complex area.I know some of the arguments about the impact of lowering and raising corporation tax.The only thing that tells me is that while there are benefits,there is always a potential downside to anything.There are better informed people than me out there (from business and leading economists) who argue that control of corporation tax by the Scottish government is very necessary.Of course the results might depend on the calibre of the politicians who are making the decisions.However,that is not unique to Scotland and the possibilty of negative outcomes does not undermine the case for having the power to make decisions.Since there is a growing groundswell of people from business and economics who favour corporation tax being controlled by the Scottish government,it might be helpful to invite them to discuss the rational for their belief.
#15 by Allan Rennie on August 17, 2011 - 12:59 pm
Hmmm yes not sure about this one Jeff, tend to agree with approx 80% of your posts. But this one I can’t get on board with, I find your arguments, well, a little wishy washy.
The crux of the issue is fiscal autonomy, and I’m all for that. Lowering corp tax rates need not be the be all and end all. In tough economic times we can lower taxes to encourage growth and in better times raise the tax to take full advantage of better conditions.
Yes, in an ideal world the EU would compete on an even keel, but this is sadly not the reality and not only is there stiff competition within the EU for business but tough competition in the UK and indeed in Scotland itself.
Your point about the North was an interesting one, lower corp tax already exists in the UK for specific regions but in another form. My former employer opened up it’s European branch in Liverpool, the main reason being ‘that the UK Government were offering huge subsidies for companies setting up in Liverpool’. So why shouldn’t Scotland be allowed to setup it’s own incentives?
You are right to point out that ‘mentioning Scandinavia isn’t always a free pass to winning an argument in favour of independence’ but by the same token mentioning Ireland or Iceland isn’t always a free pass in winning an argument against independence.
I had this argument a few months ago on here with Adrian or was it Aidan (i’m rubbish with names, apologies), his claim (and those of many other Unionist) was that the Irish economy collapsed due to it’s low corp tax. In reality that was not the case. The Irish economy collapsed due to it’s banks lending to every property developer under the sun, property’s were developed but nobody filled them, leading to huge black holes in the banks and then subsequently the Government (who guaranteed such loans) finances. In the two years I spent in Dublin, numerous foreign companies continued to invest and set up shop including the likes of Microsoft and Intel. In fact I’d go as far to argue that Ireland’s economic collapse would have been far more severe had it not been for it’s low tax rates.
#16 by Social Democrat on August 17, 2011 - 1:05 pm
@ Jeff
“Mentioning Scandinavia isn’t always a free pass to winning an argument in favour of independence”
That is true, Jeff, but it is little wonder that unionists don’t like talking about Scandinavia given the dividends of independence amongst a group of nations that share an intimate social union are so obviously demonstrable.
However, in this case I contend citing Scandinavia is sound, as these countries are able to work together as independent nations without undercutting each other. This point is the central basis of my original post.
#17 by Social Democrat on August 17, 2011 - 1:18 pm
As a post-script I would also like to point out that in order to achieve our optimal economic potential, we need full control of the necessary fiscal levers (rather than just corporation tax which, as i understand it, is desired as a stop gap by the SNP in order to give us some competitiveness within the stifling environment of the over-centralised UK state until independence or fiscal autonomy is achieved).
Further, to be able to co-operate with other European nations on achieving a fair harmonisation of corporation tax, we need to have the sovereignty and equality of status to enable us to fully participate.
#18 by Old Mortality on August 17, 2011 - 3:12 pm
I’m surprised that nobody’s mentioned the Azores ruling which would require Scotland to forgo an amount of block grant equivalent to the lost corporation tax revenue. I don’t know what it would be in Scotland’s case, but politicians in NI are already getting cold feet because of it. I’d be mightily impressed if Scottish politicans took a different view.
#19 by Indy on August 17, 2011 - 4:27 pm
The discussion paper does mention the Azores situation as well as the Basque Country and Gibralter.
But I suspect that this may be one of those heated debates about Scottish Government policy which does not actually refer to the any SG publication associated with it – bit like independence really lol/
#20 by An Duine Gruamach on August 17, 2011 - 5:34 pm
It’d certainly put the “subsidy junkies” crowd’s gas at a peep, no?
#21 by CassiusClaymore on August 17, 2011 - 4:03 pm
Jeff
My comments on your 5 reasons……
“George Osborne is already cutting Corporation Tax so any further reduction north of the border would simply be a race to the bottom. If zero-tax is a terrible idea then too low tax is certainly not a good one.”
Osborne can’t afford to cut CT. It raises huge revenue from the City. No chance he’d ever cut to 12.5% – this is proven by the fact that the Irish have had their rate for years and Britain hasn’t been able to compete.
Scotland, on the other hand, can easily afford to cut CT as Scotland has a very small CT base.
“There is no guarantee that benefits will outweigh the expense. Scotland could be left with a bloated public sector and a lower private tax take with which to finance it. Dare I mention Ireland?”
Ireland’s CT rate has been an enormous and unqualified success. It has generated enormous employment and prosperity. Ireland’s problem, like Iceland, is that it had to bail out its oversized and poorly-supervised banks. It’s nothing to do with their CT rate, which is the jewel in their economic crown.
“Did we vote for this? The SNP may have a majority at Holyrood but I can’t remember this being discussed. There’s a lot of high-fallutin’ talk about Calman this and autonomy that but paltry tax-raising powers only scraped through with a Yes vote 14 years ago so I just hope ‘the people’ don’t get left behind in these debates and decisions.”
It was regularly discussed, and has been recognised SNP policy for years.
“So much for we’re all in this together. The naked opportunism of this move hardly suggests that Scotland is a team player within the UK. The SNP’s tactics are beginning to sit awkwardly against Cameron’s admittedly occasionally abandoned ‘respect’ agenda.”
Nations compete against each other for business. Fact of life. You can’t stop that unless you think there should be a world government. Tax arbitrage is a huge opportunity for Scotland.
“Scotland should be looking for companies to invest here because they are impressed with Scotland’s skills, workforce, R&D and location, not to mention proud of putting a fair share of profits into society. They shouldn’t be investing here just because there’s a 20% deal going. This isn’t GroupOn.”
Meanwhile, in the real world……companies do locate, or relocate, based on tax rates. This is why so many UK companies have moved to Dublin and Zurich. A 12.5% rate would have them flooding to Scotland, and our CT revenues would rocket. Of course, this is why the Treasury are against it.
CC
#22 by Barbarian on August 17, 2011 - 4:11 pm
Northern Ireland is in a unique postion, since it borders the Republic which is to all purposes is a separate country.
The SNP’s plan was never discussed during the election campaign, and accountancy professionals have raised serious concerns about it.
There is more to attracting inward investment that simply lowering taxes. Skillsets and infrastructure are just as important. You also have the issue of companies which have offices across the UK – how is that resolved?
Then you will have Westminster and Holyrood playing political battles as each lowers tax to beat the other, and that will simply create uncertainty.
Westminster would simply has more economic levers to play with, and they will use them.
The SNP are wanting these powers not for economic stability, but to win the referendum. Why can’t they understand that if they maintain the consistency they had in the last parliament, they will probably achieve their aim. However, the majority seems to have gone to certain heads.
One final point – if they get power of corporation tax, but then fail in the referendum, then lose the elections, and Labour get back in, what then?
#23 by Indy on August 17, 2011 - 6:02 pm
Erm googling SNP corporation tax brings back about 583,000 results whuicgh suggests that the SNP has mentoned corporation tax from time to time!
It was front and centre in the SNP manifesto:
“As part of our work to secure more jobs for Scotland we will continue our efforts to bring new job-creating powers to the Scottish Parliament. With the support of Scots in this election we will press for improvements to the current Scotland Bill to bring greater financial responsibility to the Scottish Parliament. This will include responsibility for Corporation Tax and Excise Duty, enhanced borrowing powers and responsibility for the Crown Estate Commission. And we will bring forward our proposals to give Scots a vote on full economic powers through an independence referendum.”
#24 by Doug Daniel on August 18, 2011 - 10:01 am
“The SNP are wanting these powers not for economic stability, but to win the referendum. Why can’t they understand that if they maintain the consistency they had in the last parliament, they will probably achieve their aim. However, the majority seems to have gone to certain heads.”
Here’s an outlandish thought, but could it be that the SNP genuinely think that having these powers would help them in their immediate aim of helping Scotland recover from the economic mess the UK government has put us in? I think you’re right that if they just carry on at the pace of the last parliament, Scotland would eventually become independent, but then as far as I’m concerned, we’re already on a one-way street with independence at the end. The thing is, the quicker we get there, the better it is for Scotland, which is why the SNP want to do more than just steady the ship.
#25 by CassiusClaymore on August 17, 2011 - 5:42 pm
Barbarian
“You also have the issue of companies which have offices across the UK – how is that resolved?”
Answer – by those companies doing their very best to fall within more beneficial Scottish CT regime as much as they can, to Scotland’s huge advantage!
CC
#26 by Ben Achie on August 17, 2011 - 5:56 pm
Merkel already tried to pressurise the Irish on their lower level of CT, and with fiscal convergence likely to occur within Euroland then she may yet get her way. There is no doubt a lower CT rate has benefitted Ireland, whatever happens in the future, and it’s a good policy to examine for Scotland precisely because the base is so low – none of those proposing it expect the actual revenue to fall in the medium term, and, with Full Fiscal Autonomy, any reduction would have to be made up from elsewhere. Team playing – and team building – is about respect, communication and shared responsibility, and there’s been precious little evidence of that in the UK for the last generation and more.
#27 by Anon on August 17, 2011 - 6:31 pm
“The SNP’s plan was never discussed during the election campaign.”
This is utter hogwash. We all know that this has been recognised SNP policy for several years now. It gets mentioned constantly in debates where the economy is discussed. This is almost as much of a non-argument as “The party whose raison d’etre is an independent Scotland never mentioned independence during the election campaign”. Lowering corporation tax is as well known an SNP policy as exists, notwithstanding independence, which some people bizarrely like to claim has just been shoved onto the agenda from nowhere too.
#28 by NoOffenceAlan on August 17, 2011 - 8:48 pm
Corporation tax only applies to companies making a healthy profit.
If companies are to be encouraged to grow in Scotland, then better would be a reduction in up-front costs e.g. business rates, rents, energy etc. to tip those companies which are currently below-break-even to above-break-even.
#29 by Observer on August 17, 2011 - 8:50 pm
Agree with Jeff here, & the fact that the Scandinavian countries all have similar (high) rates of corporation tax is the clincher.
This would be a race to the bottom, losing all governments revenue at a time that they can’t afford that.
#30 by Indy on August 18, 2011 - 12:12 pm
Not so. Again, if you would actually read the discussion paper you would see that the average effective corporation tax rate in Finland, Sweden and Denmark is lower than in the UK. Only Norway has a higher rate.
#31 by proletarian on August 17, 2011 - 8:55 pm
(a wee end of night comment)
The “Ayes” have this one in the bag, definitely, as far as Wednesday @ 9pm goes anyway, by a landslide!
#32 by commenter on August 17, 2011 - 9:15 pm
“1 If zero-tax is a terrible idea then too low tax is certainly not a good one.”
If 100% tax is a terrible idea then too high tax is certainly not a good one.
“2 – There is no guarantee”
See also: Independence.
“3 – Did we vote for this?”
I should but don’t know the answer to this one – did the SNP promise to fight for increased tax powers in their manifesto? If I had to guess I know what I would guess though.
“4 – So much for we’re all in this together.”
You’re right here – the SNP are trying to make things better in Scotland And they’re doing it deliberately. (c) George Foulkes.
“5 – Scotland should be looking for companies to invest here because they are impressed with Scotland’s skills, yadda yadda yadda.”
IMO tutting at companies for not subscribing to a touchy feely worldview where tax is unimportant and Scotland has the magical ability to outperform all other competitors won’t actually work.
#33 by Andra on August 17, 2011 - 9:36 pm
Why the obsession with Corporation Tax? When we’ve not had the guts to raise or lower Income Tax (by the 3p facility that we have)?
Scottish politicians seem obsessed with big business; while ignoring small business. If they reduced Income tax they might encourage people to start business, and move to Scotland to live and work.
It is hypocritical to call for greater tax powers when they are chicken to use the ones they have.
#34 by Doug Daniel on August 18, 2011 - 10:18 am
*Sigh* Do we really need to drag up something that was settled about a year ago?
Why SVR was useless anyway
#35 by Andra on August 18, 2011 - 9:32 pm
Your article leaves me even more confused. Why would SVR be used only to increase tax (everyone seems to assume that SG would raise rather than lower the rate); yet SNP seems sure they would reduce Corporation Tax. Where would the money come from to lower corp tax – yet proceed with tax and spend socialism.
It smacks of nothing but political point scoring by the SNP – they have no guts to use the powers they have, yet constantly muddy the waters by demanding powers they don’t have.
#36 by Cameron on August 17, 2011 - 10:00 pm
Did we vote for this? Well, the SNP hardly kept it a secret did they. In fact they wouldn’t shut up about it for the longest time, it was even one of their justifications for why we need independence. If you didn’t once hear them talking about reducing corporation tax then you are politically illiterate and should have watched the news more.
That said, whilst I used to believe it was a good idea I’m not so sure anymore. Do we really want to attract fickle companies to Scotland that will leave the second anything cheaper pops up? Surely we have more to offer than that.
I doubt a low corporation tax would really make that much difference to an internationally trading company, only to companies trading mainly or largely in Scotland who don’t really need to be attracted here.
At any rate we should be trying to grow Scottish companies and keep them in Scotland not attract foreign companies here.
#37 by Tony on August 17, 2011 - 10:03 pm
Thanks to social democrat for his contribution and for providing Tom Hunter’s comments, hopefully some of his positivity will rub off on other labour backers and supporters.
Jeff
From what I gather the main thrust of your comments point to how unfair it is for the north of England it would be if Scotland lowered CT, and would result in an unfair balance that previously benefited the south-east of England.
Hmmm, I’m not sure that England would think twice if a similar scenario concerned it’s decision with the pas de Calais and metropolitan Paris. Weird that you would opt out of independence over this, I wonder if your interest in this is personal considering where you earn a living, wouldn’t blame you if it was a factor. However i considered you were a wee bit more classier than your ‘gorgeous George Galloways’ of this world. ;¬)
#38 by Jeff on August 18, 2011 - 10:50 am
I don’t think living in England is a factor when it comes to independence, I fully expect to be back in Scotland before too long but, that said, I did (genuinely) buy a shiny pair of Union Jack cufflinks the other day so I guess Old Blighty is getting under my skin in a good way a little bit. Nothing necessarily wrong with that.
At the end of the day though, independence really isn’y a big issue for me which I think a lot of people, certainly many commenters on here, find difficult to fathom as, quite reasonably, it seems to be their number one priority when it comes to their Politics.
The main point of my argument is linked to how unfair this would be on the north of England but it’s broader than that as I think it’s important for all European countries to think, at least, in a European context. So, really, what I’m saying is that Scotland slashing Corp Taxes would be just as unfair on the people of Calais as it would be on the people of Carlisle.
I don’t think that’s an invalid argument to make but, to be honest, comments have resonated on here and a Europe where difficult regions, be it in Poland or Prestonpans, have the flexibility with Corp Tax to keep comeptitive with London and Frankfurt then yes, that has a lot of merit. I’d still like to see it done via the EU rather than unilaterally in individual nations.
#39 by Indy on August 18, 2011 - 12:20 pm
Who is to say that they would be “slashed”? From my reading of the discussion paper what they are prpposing is much more targeted than that.
As well as looking at the headline rate they are also looking at providing more generous allowances for small companies, greater support for companies engaging in R&D or investing in green technology, and support for economic development in particular areas of Scotland.
If we could cross reference to Kate Higgins’ discussion of persistent unemployment in particular parts of Scotland this would seem to be a useful lever.
#40 by Erchie on August 17, 2011 - 10:40 pm
Jeff
In a sense this article is pointless
You disagree with the SNP, big surprise. You don’t see Scots Independence as a worthwhile goal
So anything that the SNP does towards a SCOTTISH advantage, as opposed to just being good, obedient North Britons, is something you are going to disagree with, because you do not want the same things
So writing articles like this pointless
#41 by Jeff on August 18, 2011 - 10:33 am
I disagree Erchie. For example, I am strongly in favour of full fiscal autonomy but I think there is a huge difference between Scotland raising and spending its own money and Scotland taking control of Corporation Tax and then dragging rates down to win cheap and dirty business.
I suppose the key to any Scottish independence desires that I do hold (and I do) is the thought of Scotland being an equal partner in Europe, having a seat at the table and taking a turn at the rotating presidency (except they don’t do that any more do they? Ah, it would’ve been nice though). The problem here is, I find it difficult to reconcile ‘Scotland in Europe’ and harmonisation within that zone with Scotland pulling Corp taxes lower than most other (all other?) members of the Eurozone.
So I’m not cocking a snoop at independence for the sake of it, I can assure you.
#42 by Random Lurking Scotsman on August 17, 2011 - 11:15 pm
On the issue of full fiscal autonomy, I’m wondering what the significance of recent moves by Merkel and Sarkozy to form some sort of fiscal union to solve the Eurozone debt crisis will be for Scottish independence.
While we in the UK argue about the pluses and minuses of Scotland having full economic powers, it appears that the Eurozone is beginning to coalesce into a full fiscal union, with the fiscal powers of individual Euro member countries eventually being given over to a Eurozone economic government.
If this happens, and we vote for independence, I’ll be curious to see what happens next. We could keep the pound and basically shadow the fiscal policy of rUK, or decide to go full into the Eurozone which by the time of independence (let’s say perhaps 2017 or something like that with all the wrangling that would occur) could very well demand that Scotland hands over a vast amount of its newly gained independence to another Union, in which case we’ve just changed a few details but could find ourselves stuck in largely the same position.
This only came out today, but needs to be talked about. If a Eurozone government is formed and begins making decisions for the Eurozone on a federal level, it could well affect Scotland just as badly as something Westminster might do if it gets things wrong.
#43 by Brian Nicholson on August 18, 2011 - 12:23 am
After see the evolution of this site since the election, I am waiting for the name change to “Lesser Nation.org”. There has been a distinct shift in commentary in favour of the status quo (unionism) and opposed to the SNP government, and even more ominously, becoming more antagonistic towards independence and a referendum. Perhaps the mods can offer an explanation regarding this change.
#44 by Jeff on August 18, 2011 - 10:28 am
Well, we welcome all feedback Brian so thanks for that. We won’t be changing the domain name just yet though.
I like to think that a better Scotland is one where positive disagreement can take place, including this blog and the subsequent comments. The assumption that “better nation†is equivalent to independence is a pretty dangerous road to go down if you ask me.
This isn’t an independence blog and it isn’t an SNP blog so I would ask you to not be too surprised or disappointed on the regular occasions when any of us don’t toe the party line.
Scotland is a democracy and the majority will should win out every time. If this post is anything to go by, devolving Corporation Tax is a foregone conclusion 😉
#45 by Rev. S. Campbell on August 18, 2011 - 7:13 pm
“Scotland is a democracy and the majority will should win out every time.”
So you’d be happy for there to be a referendum on capital punishment, yes?
#46 by Jeff on August 18, 2011 - 9:16 pm
Nope.
I don’t believe in government by referendum, referendums should be reserved for big decisions that are simply too important for Parliament’s to make – entering the Euro, Scotland being independent, whether Downtown Abbey should be on STV, that kind of thing…
I don’t think capital punishment is anywhere close to being high up enough on the agenda to being a referendum issue, even if a majority is in favour (which I find hard to believe).
#47 by Rev. S. Campbell on August 18, 2011 - 10:28 pm
As far as being “high up the agenda” goes, there are over 100 e-petitions calling for the restoration of capital punishment already on the Government website. It’s the most popular single subject.
http://www.bbc.co.uk/news/uk-politics-14400246
There are currently more signatures against it than in for, but polls still consistently show a majority in favour and I wouldn’t like to bet on the outcome of a vote, especially if they started with bringing it back for child-murderers.
The state taking people’s lives is about as “big and important” a decision as could be imagined. That’s the problem with demanding democracy, Jeff – you might get it. As we’ve seen from the reaction to the riots, there are an awful lot of idiots in this country.
#48 by Rev. S. Campbell on August 19, 2011 - 10:36 am
http://www.guardian.co.uk/media/greenslade/2011/aug/19/newsquest-capital-punishment?CMP=twt_gu
#49 by Andra on August 18, 2011 - 9:40 pm
Personally I believe we can be a better nation within the UK. We’re not nearly as badly off is the SNP try to persuade us. We are one of the best off parts of the UK; with amongst the best quality of life in the UK. There are lots of things that need improved, as there are in every big and every wee nation – but saying that independence is needed to make these improvements is a case of the grass always being greener on the the other side. If we stopped blaming others and devoted our attention to striving for a better nation then we’d all be better off.
#50 by A Student on August 18, 2011 - 12:23 am
Scotland with corporation tax powers alone is feeble.
I’d consider lower business taxes alongside a new 63% top income tax bracket.
Such ideas are divisive, risky and imagination yet it’s better than a decade of Tory rule.
That is the choice: a debate on the future or an enforced lethargy.
#51 by Rev. S. Campbell on August 18, 2011 - 11:13 am
Jeff, these are almost as feeble as your seven “reasons” for the trams, almost none of which actually constituted reasons in any traditional sense of the English language.
1. “any further reduction north of the border would simply be a race to the bottom”
You really see a tit-for-tat series of competitive reductions until we reach zero?
2. “There is no guarantee that benefits will outweigh the expense.”
There are never any guarantees of anything. Let’s do nothing about anything forever! If the cut doesn’t work, we can put CT back up.
3. “Did we vote for this?”
In so far as any individual and specific policy in a party’s manifesto can ever be said to have been individually voted for, then yes, we voted overwhelmingly for it. You’d have to have been living on Mars for six months before the election not to know the SNP wanted to cut CT.
4. “So much for we’re all in this together. The naked opportunism of this move hardly suggests that Scotland is a team player within the UK.”
I can’t believe an intelligent man like you would even say something this facile, to be honest. Since when did the SNP claim to stand for being “a team player within the UK? Isn’t their *entire primary reason for existing* pretty much the exact opposite of that?
5. “[companies] shouldn’t be investing here just because there’s a 20% deal going.”
Nobody who cares about the economy gives a rat’s arse-hairs WHY companies invest in Scotland, as long as they do.
#52 by GMcM on August 18, 2011 - 11:54 am
Jeff you’re absolutely spot on with this post. I don’t always agree with your point of view but you do speak for what you belive in and not what you think people who comment on the site want to read.
Surely even the SNP supporters on this site can see that what Labour predicted has started tio come true – the SNP govt are being distracted by this issue of CT. While they could be using the powers they have to create jobs and stimulate growth they’re wasting time complaining about the powers they don’t have and unemployment is rising.
I’m often hearing that Labour should stop disagreeing with every policy the SNP come up with – can the SNP maybe do the same with Labour policies?
Why don’t they use their time to create jobs via a Scottish Futures Jobs Fund rather than complaining about not have control over CT?
I know what the unemployed in Scotland would want.
#53 by Indy on August 18, 2011 - 12:29 pm
Suggest you go back a page or two and read Kate Higgins’ artcle which is very useful. The SG is using the limited powers that it has effectively but it’s not enough.
Arguing that we should create jobs through a Scottish Futures Jobs Fund is typical Labour pissing in the wind frankly. £40 million a year, which is what they funded it a, would not create 10,000 jobs, that’s laughable frankly. And there is a limit to how much can be achieved through upskilling and retraining people, necessary as that is. People are not unemployed simply because they are unemployable. You can retrain someone till the cows come home but f there are no jobs in their area they are still going to be unemployed. How to get more private sector investment into employment blackspots? That is the question. Labour say using business taxation as a lever can’t be part of the answer. OK then – so what is the answer?
#54 by GMcM on August 18, 2011 - 2:17 pm
The SNP are not doing enough.
The FJF was not pissing in the wind Indy. The OECD, whom you love to quote when it comes to Norway, praised Labour for creating the FJF. Scottish Labour came up with the idea of a SFJF to help reduce unemployment in Scotland when the coalition govt scrapped the FJF. I fail to see how an effective program of job creation is ‘laughable’. Your right wing views on Corporation Tax cuts driving job creation is laughable frankly.
I agree that the 40m figure is not right. It would be closer to 65m (£6500 per job).
It would create jobs on the scale outlined and the SNP should introduce it.
The SNP should be investing heavily in education and job creation. They should be imaginative and work within the devolution settlement to create jobs, NOT squabbling about a power that we don’t have at Holyrood or implementing unfair council tax freezes which reduce money going into local authorities and add to the unemployment problem.
#55 by Indy on August 18, 2011 - 5:38 pm
Labour’s future jobs fund was pish. Spending 40 million a year could not possibly have created 10,000 jobs. That is what was laughable.
It is increasingly obvious to voters how these election gimmicks work – and the SNP is not guiltles,s though not as bad as Labour.
You work out how much money you can squeeze out for whatever the particular policy is and then say what outcome can be claimed to arise from that – which is generally in the form of a nice round number which can easily go on a leaflet.
So some Labour researcher says I have found a way we can commit to spending 40 million a year on a future jobs fund. How many jobs can we say that will create? 5000? Too low. 20,000? Too high. OK somewhere between those two points, let’s say 10,000.
And does anyone ever ask them to show how exactly they are going to create these 10,000 jobs by spending 40 million a year? No, Because everyone knows it is a totally made up figure. It’s pish and that kind of nonsense is no longer good enough.
You have really got to get your head out the clouds here. Take a look at the Scottish Budget projections. There is a public spending squeeze coming and no way to avoid it. So while yes of course the SG has to invest in education and job creation the SG must also work equally hard on supporting the private sector to create jobs – because that is where the majority of jobs over the next few years are going to have to come from.
It is simply moronic to try and look at this in terms of being left wing or right wing. We are in the situation that we are in and have to use every tool at our disposal to try and get out of ir.
#56 by Dr William Reynolds on August 18, 2011 - 12:30 pm
The name Better Scotland is fine.I also think that this site and other non line media outlets that encourage all views in a reasonably civilized debate, makes an important contribution to our understanding about how Scotland fits into the modern world.I am an SNP member but value the fact that this is not an SNP blog.
I agree with Jeff that in a democracy,the majority view will win out every time.If we view the surveys of public opinion ad views expressed by leading business people and economists,the argument for full fiscal autonomy (including corporation tax powers) is gaining ground.I think that the logical flaws in Jeffs 5 points,have been adequately exposed,althugh he may not agree.No worries,it is an interesting debate.It might be useful to follow it up by inviting one of Scotlands leading business men to contribute an argument entitled :”The case for control of corporation tax by the Scottish Parliament”
#57 by Osbert on August 18, 2011 - 1:01 pm
@Rev Campbell #44 wrote:
“Nobody who cares about the economy gives a rat’s arse-hairs WHY companies invest in Scotland, as long as they do.”
I beg to differ – I care a very great deal about the economy, or rather the social benefits that can result from the economy, AND I care a great deal about why companies invest in Scotland.
We’ve seen, again and again, the dangers of encouraging inward investment with grants etc, and lower corporation tax is likely to lead to similar results – companies have no long term connection with the locality, and will move as soon as a better deal is on offer elsewhere.
@Indy #37 wrote:
“As well as looking at the headline rate they are also looking at providing more generous allowances for small companies, greater support for companies engaging in R&D or investing in green technology, and support for economic development in particular areas of Scotland.”
Good! I can see the benefits of using CT in this way, more subtly that the sledgehammer of headline rates. There must be other policies that could be promoted through differential allowances and rates – including my current enthusiasm, employee owned businesses.
#58 by cynicalHighlander on August 18, 2011 - 5:20 pm
Why tinker with just one tax which on its own will not sort anything when the bigger picture is that the present system is on the brink of collapse.
Oil Limits, Recession, and Bumping Against the Growth Ceiling
#59 by Barbarian on August 18, 2011 - 7:47 pm
The SNP had the tax stuff in their manifesto, something I’m well aware of. But it wasn’t promoted properly.
I’m in favour of more fiscal powers up here, but only if they are used sensibly.
A Student – why bash the high earners with higher tax rates. It would be better closing off the tax avoidance schemes. Some of these people are creating jobs, so why penalise them?
(And no I’m not one of them!)
#60 by Jeff on August 18, 2011 - 9:20 pm
From the SNP’s manifesto:
“With the support of Scots in this election we will press for improvements
to the current Scotland Bill to bring greater financial responsibility to the
Scottish Parliament. This will include responsibility for Corporation Tax and
Excise Duty, enhanced borrowing powers and responsibility for the Crown
Estate Commission. And we will bring forward our proposals to give Scots
a vote on full economic powers through an independence referendum.”
I stand corrected and will be available for tomato throwing (inside a set of stocks, naturally) at the Royal Mile in due course… 😉
#61 by Brian Nicholson on August 19, 2011 - 4:53 am
Jeff, no one would want anything than unfettered debate from all points of view. My concern was that rather than seeing that, we were seeing only an anti-SNP point of view recently. Others may disagree, but that is my personal viewpoint. Rather than feel it is criticism, please take it as encouragement to continue to offer all points of view.
#62 by equal person on August 20, 2011 - 12:50 pm
“If we stopped blaming others and devoted our attention to striving for a better nation then we’d all be better off.”
As has been crystal clear to all who look at matters from a neutral or objective viewpoint not one of us here who are in favour of “renormalising” the way we live in this part of the world and have a command over the levers that are so important to our lives (or more accurately, “don’t” have any command over our own business)…
…not one of us blame “anyone else” for the current difficult position we find ourselves in (and will continue to be in less we re-assume control over our own lives again)…
if there’s anyone to blame (and there always is) it’s “ourselves” or more accurately “those among us” who can’t or “won’t” see the reality or the truth of things that shout out from every part of life in Scotland.
We don’t blame “anyone else” though some of us do get a tad frustrated at how easy fooled some among us seem to be.
Whether people like or dislike the governing S.N.P. it doesn’t change the fact that they are the only grouping of people who are genuinely trying to better the quality of living here in Scotland for “all of us”.. no cliques or favourites… “all of us”.
Inspite of a London orchestrated media & press trying to muddy the waters at every turn, the truth of what’s right and who’s doing what is still recognised by the overwhelming majority of people here in Scotland: (May 5, 2011, S.N.P. 69 seats)
I can’t understand the hesitation of some to assert control of their lives and stand on their own feet… while nations of people all over the world fight for the right to use their own voice and make their own decisions.. here in Scotland we have people who fight “not to control their own lives”.
You couldn’t make it up.