“Financially illiterate”? Scottish Labour must do better

Ed Jacobs reports on the latest SNP/Labour row in Scotland - this time on corporation tax.


Scottish Labour really must do better.

In a report (pdf) published today by the IPPR on the impact on northern England of potential Scottish independence, the think tank notes that in the event of corporation tax being cut to 12.5% – a proposition supported by a number of businessmen and women north of the border, and in line with Ireland – the deficit in Scotland would increase by almost £4 billion a year , requiring close to 8% growth to plug the revenue gap that would emerge.

With Scottish Labour’s shadow finance secretary Ken Macintosh declaring the figures demonstrated the SNP’s economic policies are “financially illiterate”, the Scottish Labour press release states that the IPPR report:

“…shows that under the SNP’s plans to cut Corporation Tax to 12.5%, Scotland would increase its budget deficit by almost £4 billion a year, requiring economic growth of almost 8% or unparalleled cuts to the public sector to cover the shortfall created.”

The only problem is that the SNP’s policy is to cut corporation tax to 20%, a position the IPPR states is “achievable”.

The IPPR report explains:

“The likelihood of Scotland being able to slash corporation tax to 12.5 per cent – as some leading Scottish business figures argue it should – seems remote, in the short to medium term.

“Indicative calculations carried out for this paper indicate that GDP growth of approximately 8 per cent would be required to make up the lost revenue – a tall order, especially in the current economic climate.

The SNP’s commitment to a 20 per cent rate of corporation tax looks more achievable, although this will require GDP growth in the region of 4 per cent – still a risky proposition. Furthermore, Scotland is a complex society and deep tax cuts would weaken its tax base, and that is something that comes with consequences.”

Whilst Scottish politics is often more hot air than anything else, Scottish Labour would do well to establish what SNP policy actually is before attacking it.

Whether it’s a cock-up or conspiracy, the message is simple, Labour must do better…

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4 Responses to ““Financially illiterate”? Scottish Labour must do better”

  1. Sneekyboy

    Well done on correcting them on such an obvious Straw man attack.

  2. Doug Daniel

    It’s no cock-up, and calling it a conspiracy is credit it with being more thought-through than it actually is. It’s just a lie, simple as that. As is Macintosh’s claim that Scotland gets “more spending than we raise as a result of being in the Union.”

    No Ken, that’s called “borrowing”, and unless he’s suggesting rUK is in surplus as a whole and subsidises Scotland, then he’d do well to explain why he thinks government borrowing powers are somehow unique to the UK.

    Meanwhile, over at the Labour Supporters for Independence conference, there were a host of Labour and ex-Labour folk extolling the virtues of independence and how it would be the making of Scottish Labour. Good, honest folk, unlike Ken Macintosh.

  3. uglyfatbloke

    This sort of ilil-considered attack is just suicidal. At the moment Ken etc. can rely on he media – especially the BBC – to let them off the hook about daft attacks on the gnats, but that may not always be the case.

  4. uglyfatbloke

    Ken Macintosh is not alone in his ‘subsidy’ claim I’m afraid. The BBC trots it out regularly. Thing is, we expect better of Ken Macintosh since he’s about the brightest and the best of the current crop of Labour MSPs and MPs., but Labour has to do much better than this is the gnats are going to be defeated at the referendum. Personally, I don’t much care about the Union one way or the other, but I do care about evidence and so far all we’ve had are assertions and counter-assertions (and sometimes just plain old lies) from both sides. The electorate deserve better than that, but the subsidy claim is a risky strategy anyway…what happens if the BBC stop peddling it or a major newspaper exposes it? How will that help the credibility of ‘Better Together’? It’s enough of a problem that Darling is the ‘face’ of the campaign; dies anyone really expect the electorate to forget that he and Brown carry a lot if the responsibility for the current situation? No wonder the Tories can afford to be so complacent about the next General Election

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