A FINAL WARNING ON HIGHER TAXES

Business leader confronts Sturgeon at dinner over tax hike plans and raises fears of ‘incalculable’ damage to the Scottish economy

SCOTTISH business leaders last night issued a direct warning to Nicola Sturgeon to scrap her plans to increase taxes – or the economy will face ‘incalculable’ costs.

The First Minister was challenged face-to-face over SNP proposals to force many families to pay more, when she attended a business dinner.

She was told our ‘sluggish economy’ cannot afford to be hit with the highest taxes in the uk – or it will face ‘great’ damage.

The warning – at the annual Scottish Chambers of Commerce (SCC) dinner – comes less than a week before the Scottish Government unveils its Budget tax plans.

SCC president Tim allan issued the warning in person to the First Minister at Glasgow’s Hilton Hotel. He said: ‘unless tax revenues were ring-fenced to drive growth and job creation, the cost for a small nation in terms of lost investment could be great.’

In an earlier statement, he had described the potential damage to the economy as ‘incalculable’.

He added: ‘Our concern is that, at a time of sluggish growth and faltering business investment, a competitive Scotland cannot afford to be associated with higher taxes

than elsewhere in the UK. A high-tax Scotland would be easy to achieve but the damage could take years to repair. We want a level playing field on tax throughout the UK to keep Scotland competitive.’

Miss Sturgeon has said ‘the time is right’ to consider increasing tax rates. She revealed a series of proposals last month which included increasing tax rates for people on a £24,000 salary.

At the dinner, Mr Allan also told Miss Sturgeon of his ‘disappointment’ that she postponed her manifesto promise to cut the cost of flights by reducing air passenger duty.

He said: ‘The economic case has been made, accepted by Government, so let’s get on with it and remove this growth inhibitor to trade.’

He said firms have already been implementing ‘contingency plans’ to prepare for leaving the EU and called on Miss Sturgeon to work with the UK Government in securing a deal which is good for business and the economy.

He added: ‘Businesses need to plan and invest – and we need Scottish and UK Governments working together to devise a policy framework which enables us to attract and retain talent from around the globe and enable growth in Scotland’s economy.’

All four proposals published by the Scottish Government include increases in the higher rate of tax, currently 40p, and the 45p top rate. In addition, three propose a new 21p rate on earnings of £24,001 and above.

The proposals also include options to introduce a new 42p rate on earnings above £75,000, rising to 50p above £150,000.

Last night, Miss Sturgeon tried to play down the tax row, saying: ‘By far the best – or rather, the least worst – way of

‘We want a level playing field’

delivering Brexit is for the UK as a whole to remain in the customs union and the single market.

‘The events of this week have increased the urgency of ensuring that place in the single market is maintained, which is essential for jobs, investment and living standards. Whatever happens under Brexit, the Scottish Government will continue to focus on making Scotland the best place in the UK to do business.

‘Next week, we will publish our draft Budget. We’ll set out how we intend to fund firstclass public services and a fair social security system and how we will achieve our ambitions for Scotland’s economy.

‘We recognise the crucial importance of providing a good environment for all businesses in Scotland. The needs of business are too often seen as separate from, or competing with, the goal of building a fairer society – the reality is the two can be mutually supportive. That is something our Budget will seek to reinforce.’

Scottish Tory finance spokesman Murdo Fraser said: ‘This is another expert view from the world of business that Nicola Sturgeon cannot afford to ignore.

‘Tax hikes would be a disaster, not just for hard workers, but businesses right across the country. Neither will forgive the SNP for hitting them in the pocket, should it do so in next week’s Budget.’

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