The great Scots tax revolt begins

L Backlash as SNP refuses to follow Westminster’s radical tax-cutting agenda l Top business leaders like Sir Tom Hunter line up to urge Sturgeon to rethink

NICOLA Sturgeon was last night facing a revolt over her refusal to close the eyewatering tax gap with the rest of the UK.

Business leaders, economists and tax experts lined up to condemn her for refusing to follow Chancellor Kwasi Kwarteng’s radical measures to introduce the biggest set of tax cuts since 1972 in an attempt to fire up Britain’s ailing economy.

His £45 billion package includes a pledge to reduce the basic rate of income tax to 19 per cent and abolish the 45p top rate.

But income tax is devolved to Holyrood and controlled by the Scottish Government – and there are no signs it will follow Mr Kwarteng’s bold lead.

Business leaders and entrepreneurs warned Scotland faces a flight to England of high earners and wealth creators unless the SNP matches Tory tax cut plans.

Sir Tom Hunter, who established a multimillion-pound sports retail company, said: ‘The number one thing for businesses is the attraction and retention of talent. We want to attract the best people, and retain them, so they are living and paying tax here.’

He was joined by Robert Kilgour, founder and chairman of Scottish Business UK, a body which represents companies in Scotland. He said: ‘SNP Ministers are so

‘We need an urgent focus on economic growth in Scotland’

to an oppositional stance toward their counterparts at Westminster that the concept of co-operation for them is a nonstarter. Far better to shape a separate path to illustrate separation.’

Now anyone earning more than £14,732 in Scotland faces paying more in tax than they would in England. Meanwhile, someone earning £40,000 would pay £396 more in Scotland than they would in England. This rises to £1,863 more at £50,000 or £2,000 more at £80,000.

Mr Kwarteng’s reforms include stamp duty, though homebuyers in Scotland pay land and buildings transaction tax (LBTT).

For families in England buying homes worth up to £250,000, stamp duty has been abolished and first-time buyers can get stamp duty relief for homes worth up to £425,000.

But under LBTT in Scotland, housebuyers pay 5 per cent for homes worth £250,000, rising to 10 per cent at £325,000.

Due to the reforms in England, the Scottish Government is set to get a further £600 million from the Treasury but it remains to be seen if it will use it for tax cuts.

Sir Tom said: ‘If I am trying to attract someone from, for example, Manchester, and they realise they will be paying several percentage points more in tax than in England, it would be a factor in their decision-making.

‘It’s reasonable to suggest someone may reflect on this and say, “I am going to stay in Manchester”.

‘If someone made that decision, for the little tax it actually amounts to, that would be bad for Scotland, because I want to be getting the best people here.

‘The Scottish Government will be given money from Westminster and they need to decide how they are going to apply it. It would be good if they cut the tax for lower earners as well. I would look at the whole table of earners, and not just the top earners.

‘But people at the top end are creating jobs, paying the most tax, and that pays for our health service, education and so on.’

He added: ‘People get hung up on the tax rates when we should be focusing on the tax take.

‘Scotland doesn’t have enough high taxpayers. I have seen figures estimating it at 10,000 or 20,000 people. This tells me it’s not a huge number of taxpayers.

‘I want as many people in Scotland paying their tax, growing their business and employing people who will pay tax – and the tax “take” as a whole will go up.

‘The key thing is how much tax we actually raise in total.’

He was joined by former Scottish

Government economic advisers, including Jim McColl, who said: ‘There’s always a risk that if it’s more business-friendly down south, people will recognise that, so it does create a danger for the Scottish economy. There needs to be an urgent focus on economic growth in Scotland – we haven’t had that. Westminster is making the UK attractive.

‘We need to make Scotland an attractive destination.’

Sir George Mathewson, former Royal Bank of Scotland boss, said: ‘Whatever they do in Westminwedded ster must influence what you have to do in Scotland because it’s an open market. We can’t create a taxation difference between England and Scotland.’

Mr Kilgour said he was not optimistic for the future, adding he believed Ms Sturgeon would do nothing but complain.

He said: ‘Instead, we’ll get ceaseless complaints from the First Minister even though there’s an extra £600 million funding for Scotland as a result of Friday’s fiscal event. Enough to pass on tax cuts, you’d think.’

Meanwhile, one of Scotland’s biggest employers warned the SNP that its tax policies will ‘drive people out of Scotland’.

Sandy Easdale, whose transport and property empire with brother James employs 2,000 people, said: ‘It makes no sense to have two tax systems on our small island. This is guaranteed to drive entrepreneurs out of Scotland.’

David Lonsdale, director of the Scottish Retail Consortium, warned the high street desperately needs Government help.

He said: ‘It’s imperative that the upcoming Emergency Budget Review and devolved Budget ensure Scots on modest earnings benefit too from cuts in income tax, which would boost incomes and encourage spending.’

‘We can’t create a taxation difference’