Businesses up and down the land are sounding alarm over high taxes — but the SNP isn’t listening

HUMZA Yousaf promises a socialist paradise in the event of independence – but who would be left to pay for it?

After all, many Scots might well have upped sticks long before then, driven away by relentless SNP tax raids.

Those who remained would expect a world-class NHS and education system – as promised – but there might be fewer taxpayers around to fund public services.

Economic growth would be unachievable if higher earners headed for the hills, as many have already done.

Happily, the chances of the SNP’s separatist pipe dream coming to fruition are somewhere between negligible and non-existent.

Struggling

But in the meantime, many Scots have to put up with a fresh assault on their pay packets – and from the start of this month the tax-grab ramped up in earnest.

It should come as no surprise that companies now warn they’re struggling to recruit executives because the SNP has turned Scotland into the highest-taxed part of the UK.

As we reported yesterday, 80 per cent of firms in the finance sector say tax divergence has led to them struggling to attract and retain workers.

Everyone earning more than £28,850 a year pays more income tax in Scotland than they would in other parts of the UK.

Since the start of this month, an ‘advanced’ 45p tax rate has been operational for earnings between £75,000 and £125,000, while the top rate was increased by 1p to 48p.

It’s no wonder that Sandy Begbie, chief executive of Scottish Financial Enterprise, believes we are ‘beyond the tipping point’.

He warns that the ‘tone is one of divergence increasing further and that is also creating a negative backdrop to attracting people to Scotland’.

Nor is he alone – last month Chris Hayward, policy chairman of the City of London Corporation, said that the SNP’s decision to create an income tax ‘gulf’ between Scotland and England is a ‘significant concern’.

And Judith Cruickshank, a senior manager at the Royal Bank of Scotland, has previously raised concern about finance workers opting for English cities, where income tax is lower.

One respondent to the business survey said he was ‘now starting to have concerns raised over the Edinburgh location of my firm’, as ‘talent attraction at the senior levels’ is beginning to impact the firm’s ‘ability to grow’.

Banking bosses know and will admit privately that the SNP’s reckless tax experiment will come at a cost – though it won’t necessarily happen overnight.

Some estimate that the effect of the SNP’s high-tax addiction won’t be felt fully for five years.

The impact of turning Scotland effectively into a no-go area for anyone with an ounce of aspiration cannot be overestimated. Higher and top rate taxpayers were estimated to account for 65 per cent of the total income tax take in 2023-24.

It’s worth reflecting when you check this month’s payslip (if you can bear it) that 39 per cent of Scots don’t pay any income tax – a completely unsustainable situation.

Yet the freebies still come thick and fast, all part of the SNP’s ‘social contract’ which is often cited as the justification for those brutal (and naturally very ‘progressive’) tax hikes.

The Institute for Fiscal Studies has said further tax rises will be needed if the Scottish Government continues to commit to ‘free’ universal services such as covering the cost of tuition fees, personal care and bus passes. ‘Free’ prescriptions alone cost a weighty £1.4billion a year – a figure that has risen by 19 per cent in the past decade – while each year £10.5million is spent by the NHS on paracetamol, £2.9million on aspirin, £1.6million on sun cream, and £1.8million on shampoo.

There is also waste on a mind-boggling scale, from the millions poured into incomplete ferries to the cash squandered on those ludicrous papers on independence churned out by civil servants.

One of the latest such documents, which looked at the marine sector, cost an average £10.85 for every download, as so few bothered to read it.

It’s an outrage that this flannel is still being produced. Officials should be laser-focused instead on remobilising our moribund economy and getting more Scots into jobs.

Alternatives

One in 20 working-age people have never done a day’s work in their lives in parts of Scotland, and the numbers have rocketed since the SNP came to office.

We’re all so inured to industrial-scale waste, constitutional game-playing and endless tax hikes that many have come to accept it as inevitable – but of course it’s not.

Devolution was supposed to be about radical alternatives to the status quo, but there’s precious little vision or appetite for reform when it comes to the economy.

Liz Truss’s memoir, serialised in the Mail, is a fascinating insight into her ill-fated attempts to push ahead with tax cuts and limit public spending.

She and her cohorts made a hash of it by not preparing the ground for their bold plans – and now her short tenure is presented as proof that tax cuts must be taken off the table. Yet what she proposed was entirely legitimate – even if the implementation was botched.

In Scotland, the debate about meaningful tax cuts never took place, and probably never will.

Yet lower tax helps improve productivity by enabling firms to invest in capital, training, and research and development – and it encourages risk-taking and entrepreneurship.

Rewarding

It also increases participation in the workforce by making it more rewarding to move off benefits and into work. But countenancing tax cuts would require an end to the Leftwing, statist ideology that has held sway for decades.

And it would go against every instinct of our lacklustre politicians, most of whom have a limited understanding of how the economy works – think of shamed former finance secretary Derek Mackay.

He’s remembered mainly for quitting hours before the Scottish Budget in 2020 after it emerged he had bombarded a teenage boy with inappropriate online messages.

But he also admitted he’d never heard of the Laffer Curve, which dictates that revenues can go up if taxes are cut. Luckily, Tory MSP Murdo Fraser was on hand to explain the concept.

There’s little evidence Mr Yousaf or anyone else in his Cabinet has a better grasp of the basics than Mr Mackay.

As we report today, a Scottish Government review has suggested that small firms should be stripped of £300million of rates relief if they don’t pay their staff a living wage and comply with ‘fair work’ conditions.

Remember, these are companies which struggled through the lockdown years and are now desperate for respite from crippling rates, which for many of them pose an existential threat.

For as long as the SNP is committed to high-tax lunacy, Scotland will stay on a path to economic ruin.