Strangling economy

THeRe is no greater stranglehold on productivity than tax – and yet it is the mainstay of SNP economic policy.

Scots are already preparing to miss out on a £340 tax cut provided to the rest of the UK after an increase in the threshold for the higher rate of income tax. As we reported last week, another secret Budget bombshell means they will also have to pay £135 extra in National Insurance contributions.

Today we reveal that Scottish firms face being forced to pay nearly £90million more than their english counterparts, unless SNP ministers follow Philip Hammond’s lead with a business rates revamp.

Punitive rates already act as a massive drain on profits, with medium and large businesses paying £62million more than similar firms elsewhere in the UK.

If Holyrood Finance Secretary Derek Mackay refuses to follow Mr Hammond’s example, this disparity will grow by a further £25million. It is little wonder that experts are now warning of an exodus of Scots fed up with government taking more and more of the money they earn.

The absurdity of the situation was illustrated earlier this month when a member of Nicola Sturgeon’s Growth Commission was forced to close one of her pubs because of soaring business rates.

Higher taxes rob firms of the profits they need to expand, and pile extra strain on the family finances of their employees. This relentless squeeze at a time when economic growth in Scotland is negligible is a blueprint for disaster – and yet the SNP shows little sign of changing course.

Mr Mackay must recognise that hammering hard-working Scots with higher taxes will do nothing to encourage entrepreneurialism and commercial innovation.

The £2billion boost for Scotland in last week’s Budget means that the case for a rise in income tax has been comprehensively demolished. So far, the SNP has responded by attempting to engineer yet more grievance – and vowing to continue its increasingly one-sided ‘conversation’ about tax hikes.

Mr Mackay has an unmissable opportunity in next month’s Scottish Budget to rule out those increases – and to provide muchneeded respite for businesses.