Edinburgh, 8 September 2011
A report claiming that the devolution of corporation tax could create 27,000 jobs will be presented today to Scottish Secretary Michael Moore.
The Scottish Government said that economic analysis indicated that reducing the tax from 23 per cent to 20 per cent would lead to an increase:
In the level of Scottish GDP by 1.4 per cent after 20 years;
Of 1.1 per cent (equivalent to 27,000 jobs) in overall employment in Scotland after 20 years;
In overall investment in the Scottish economy by 1.9 per cent after 20 years;
And in Scottish exports to the rest of the UK by 1.4 per cent and to the rest of the world by 1.3 per cent after 20 years.
“For the first time we now have clear evidence of the potential economic benefits to the Scottish economy from Scotland securing responsibility for corporation tax. This new evidence provides a vital and significant contribution to the debate and forms part of our submission to the UK Government for economic teeth to be added to the Scotland Bill,” said Finance Secretary John Swinney.
“Since 2007 we have taken forward a range of initiatives to make Scotland the most competitive location in the UK to do business. However, under the current constitutional arrangements, control of many of the key job creating powers including 90 per cent of Scottish tax revenues are reserved.
“Corporation tax is one of the chief levers that government can use to promote growth, investment and jobs. Used wisely it can be a vital source of competitive advantage and there is clear evidence from around the world of the benefits to employment and the economy.
“The figures, in the document published today, add further weight to our overwhelming argument that with control of corporation tax, Scotland can raise its economic performance.
“We have the support of successful business leaders, job and wealth creators in Scotland such as Jim McColl and Sir Tom Hunter. The cross-party Scotland Bill Committee in the last Parliament also concluded that this power should be available to the Scottish Government if it is granted to Northern Ireland.
“There are numerous examples where corporation tax has been successfully devolved in other countries and they all continue to perform effectively and competitively. There are also examples where systems have been developed to minimise costs of administration. I see no reason why Scotland cannot follow the lead of other countries by introducing an efficient and effective system for collecting corporation tax receipts.
“The Scotland Bill provides an ideal opportunity to devolve this power and the UK Government must now act. The people of Scotland have spoken decisively and Westminster must respect the fact there is now clear majority opinion in Scotland for more substantial financial powers for our national Parliament, including transfer of responsibility for corporation tax.”