Economy ‘hit by threat of tax hikes and drive for Indyref 2’
‘Barriers to investment’
SCOTLAND’S economy is being damaged by the twin threats of tax hikes and another independence referendum, according to the boss of a major housebuilder.
Andrew Sutherland, joint managing director of Miller Developments, said overseas investors have told him Nicola Sturgeon’s decision to keep the threat of another referendum on the table is a ‘roadblock’ to investment.
He also said the SNP’s decision to consider tax rises for people earning as little as £24,000 could create more ‘barriers to investment’, which would damage the economy.
In addition, he urged ministers to change the controversial property tax that hits buyers of homes costing more than £325,000 with an eye-watering 10 per cent charge.
Critics of the SNP described it as a ‘serious warning from a serious business’ and called for the Government to stop putting its ‘fingers in its ears’ and listen.
Mr Sutherland – last night unveiled as the new chairman of industry body the Scottish Property Federation (SPF) – said: ‘There is a lot of political uncertainty, not just in Scotland but across the UK, and what we are hearing from investors who’d like to come to Scotland is there are a few roadblocks there.
‘They find the uncertainty on Indyref 2, for example, being a concern. Investors looking overseas, such as in the UK, are not emotional as to where they send their cash, so this kind of volatility makes it difficult.’ Although Miss Sturgeon has reset her timetable for demanding another referendum, Mr Sutherland insisted that has not lifted the uncertainty, saying: ‘It continues to remain a concern until it is taken off the table.’
He added: ‘Some will think, “Do I come to Scotland or go to Birmingham, Manchester, Leeds?” There are plenty opportunities elsewhere without there being that element of risk.’
Last week, Miss Sturgeon said ‘the time is right’ to hike income tax rates to fund services.
She published four proposals including a 21p band for everyone earning more than £24,000, as well as hiking charges for higher and additional rate pay- ers. But Mr Sutherland said: ‘Anything that causes a differential where the Scottish market is disadvantaged relative to the rest of the UK is a concern.
‘If there is an accumulation of these things, that creates barriers to investment and that then impacts on the Scottish economy.’
He said the SPF had commissioned research to provide evidence that raising the level at which homes incur the 10 per cent Land and Buildings Transaction Tax to £500,000 would improve tax income.
Scottish Tory finance spokesman Murdo Fraser said: ‘This is another serious warning from a serious business. But the SNP’s ongoing position is to put its fingers in its ears.’
A Scottish Government spokesman said: ‘Taxpayers across Scotland get the best deal in the UK, with a range of services and benefits which are not available elsewhere. The serious economic threat posed by Brexit, coupled with continuing UK Government austerity means we are seeing increasing pressure on public services. The time is right for a discussion about how we protect them.’