QUESTIONS FOR CBI OVER TAXATION CONFUSION

For immediate use: Monday 17th January 2011


Attn: NEWSDESKS


POLITICAL CORRESPONDENTS


SNP ARGUE FOR POWER TO CREATE JOBS


The Scottish Parliament should have the power to create jobs said the SNP, as opposition and a member of Scotland’s business lobby continue to argue for the power to raise taxes.


Questioning the confused approach to taxation by the Scottish CBI whose director, a member of the Calman Commission is due to give evidence on the Tory plans to allow the Scottish parliament to raise income tax in Parliament tomorrow despite his own organisation warning of damaging economic consequences (Tuesday) SNP MSP and Finance Committee member Linda Fabiani highlighted the support of the CBI in Northern Ireland for corporation tax powers to be devolved in order to create jobs.


In their manifesto CBI Scotland state:


“We remain opposed to the use of Scotland’s tax-varying power because of the additional cost and complexity that would be placed on employers. If the Calman Report is adopted by the UK government, we would support the devolved ten pence income tax rate remaining on a par with the rest of the UK but we would oppose any increase because Scotland’s tax competitiveness
would deteriorate.”


The CBI in Northern Ireland state cutting corporation tax will lead to a transformational step change” in economic performance and that “No other tax measure is likely to be as effective or as transformational for the economy”.


Ms Fabiani, a member of the Scottish Parliament’s Finance Committee and former External Affairs Minister said:

“There is a real hypocrisy’s in CBI Scotland’s position.

“Not only is the CBI in Scotland in conflict with their colleagues in Northern Ireland who recognise that it is the powers to create jobs that are most important in growing an economy, they contradict themselves.


“CBI Scotland’s own manifesto for Scotland’s election says the Tory tax raising powers in the Scotland Bill will damage Scotland’s tax competitiveness yet instead of arguing for powers that could enhance Scotland’s competitiveness the CBI Director seems set to actively argue

for the Parliament to have the power to increase income tax a move that would cut spending power, increase business costs and potentially damage the Scottish economy.

“The CBI rightly congratulated the SNP Government for not using the tartan tax yet it is now arguing for an extension of that tax in a way that it acknowledges will create an annual cost to business and that has not been shown to create a single job.

“And where the current tartan tax will only cost businesses if it is used, this Tory tax trap could lead to bills for business every year even if the tax rate stays unchanged.


“Businesses across Scotland will be confused by an approach that sees the CBI backing powers to raise income taxes but rejecting powers to reduce business taxes.


“In contrast the same business lobby in Northern Ireland is backing the devolution of corporation tax as a move which could generate 90,000 jobs for the area including up to 40% in small businesses benefitting from economic spin offs.


“While the opposition are busy arguing for the power to raise taxes the SNP will continue to push for the power to create jobs and grow our economy. “


1. CBI manifesto – page 4 “We remain opposed to the use of Scotland’s tax-varying power because of the additional cost and complexity that would be placed on employers. If the Calman Report is adopted by the UK government, we would support the devolved ten pence income tax rate remaining on a par with the rest of the UK but we would oppose any
increase because Scotland’s tax competitiveness would deteriorate.”


http://www.cbi.org.uk/pdf/20100614-cbi-scotland-manifesto.pdf


2. CBI Northern Ireland on Corporation tax:


http://www.cbi.org.uk/pdf/20111123-cbi-corporation-tax-northern-ireland.pdf


3. David Lonsdale, CBI reaction to Calman Commission


http://www.scotsman.com/latestnews/Critics-confounded-by-radical-.5367796.jp


4. CBI reaction to Scotland Bill – including costs to business


http://www.cbi.org.uk/ndbs/press.nsf/939bc8c78700388480256886003bbeac/da6e0d6f2409e803802577ec0031fbb0?OpenDocument