UK Economics

Sturgeon told stop independence war & act NOW on tax timebomb as Scotland nears recession

BUSINESS leaders have pleaded with Nicola Sturgeon to shelve a string of tax grabs as Scotland teeters on the brink of recession.


First Minister Nicola Sturgeon under increased pressure as Scotland faces recession

Some of the country’s biggest industry groups demanded a swift shake-up of the £2.8billion-a-year rates system to boost growth and investment.

Bosses also pressed the First Minister to ditch a £62million raid on thousands of firms and re-think plans which will see middle-class Scots hit with the largest tax bills in the UK.

The call for a “bold and ambitious” budget heaps pressure on her administration ahead of Finance Secretary Derek Mackay’s expected autumn spending review.

But there was anger after Cabinet colleague Keith Brown insisted there was no plan to slash business rates.

Tories said a five-year freeze would give firms a “helping hand” in the wake of June’s Brexit vote.

Economy Secretary Mr Brown said backing infrastructure was “the most effective way” to provide certainty.

He highlighted Ms Sturgeon’s £100million boost to accelerate public building – despite being attacked for using money left over from last year’s budget.


The ‘ambitious’ budget increases pressure on Finance Secretary Derek Mackay’s spending review

Figures show Scotland’s economy had already officially flatlined before the EU referendum.

The Scottish Government has the power to remedy this situation now, before the impact is felt

Scottish Chambers of Commerce chief executive Liz Cameron

Ms Sturgeon has previously promised to “listen very carefully to the business community”.

Former RBS chairman Ken Barclay is heading a government review of rates but this won’t finish until next summer – months after the April revaluation.

Scottish Chambers of Commerce chief executive Liz Cameron warned firms faced a “rates time-bomb”.

She said: “The values that will apply are based on the economy as it was on April 1, 2015 – over a year before the EU referendum and before the worst effects of persistent low oil prices became apparent.

“If the Scottish Government chooses to do nothing about next year’s rates bills, then businesses will be hit with valuations that bear no relevance to the economic conditions they will be facing next year.

“The Scottish Government has the power to remedy this situation now, before the impact is felt.”

Scottish Chambers of Commerce chief executive Liz CameronPH

Scottish Chambers of Commerce chief executive Liz Cameron warned firms faced a ‘rates time-bomb’

There have been concerns that doubling the so-called large business supplement earlier this year has hit medium-sized firms too and put Scottish companies at a competitive disadvantage. The Scottish Retail Consortium insists it should be scrapped alongside a “fundamental reform” of rates and demanded “tangible action”.

Ms Sturgeon will cancel the UK Government’s tax giveaway for the squeezed middle by refusing to raise the wage threshold for the higher 40p rate from £43,000 to £45,000.

She will only put the salary threshold up to £43,387 next April when Holyrood controls the levy.


Business leaders are now demanding that SNP act now to remedy the situation

SRC director David Lonsdale said: “Now is not the time to raise taxes on the vast majority of working Scots, which would, of course, impact on their discretionary spending. However, the Scottish Government should go further and look to reduce the burdens on retailers so they are at the least no more onerous than elsewhere in the UK.”

Mr Brown told BBC Radio Scotland’s Good Morning Scotland: “We are in a new situation just now post Brexit – there are huge uncertainties.

“The most effective way to make an economic impact, to provide certainty in terms of jobs and to businesses is to invest in infrastructure, not just because it employs people right away but because it improves productive capacity of the country.”

He later said thousands of firms had been helped through the small business rates relief scheme, adding: “We will continue to do everything we can to support jobs and the economy, as well as pressing the Tory government at Westminster to address some of the huge uncertainty it has created.”

But Scottish Tory finance spokesman Murdo Fraser said: “The SNP have let the economy brief slip as they continue to obsess about independence.

“After nine years in power they still have a lot of work to do and to allow the Scottish economy to grow they must support retail businesses all they can.”

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