Call for independence tax clarity

Mar 16 2012

The Scottish Secretary is due to call for clarity over taxes in an independent Scotland.

Michael Moore will tell the Scottish Council for Development and Industry conference in St Andrews that the debate on independence is "real and urgent" and that the Scottish Government needs to make clear to people what an independent Scotland's economy would look like.

Mr Moore wants to know what tax rates would be, how much would be spent on public services, and who would regulate the banks.

In his speech he will say: "Those who support separation move seamlessly from economic model to economic model, alighting on any system that seems to suit, then floating on to the next when it becomes expedient to do so.

"Until 2008 we were being enticed to break away from the UK and join the arc of prosperity with Iceland, Ireland and Norway. Since the financial crisis, the arc has shifted east by about 1,500 kilometres. The Scandinavian model - Denmark, Norway and Sweden - is their ideal now. From deregulated Celtic Lion to social democratic haven in one inelegant rhetorical flourish."

Mr Moore will say that the Scottish economy is very different from the Scandinavian model, and "tough choices" would have to be made if it was to be adopted.

"Take tax. Right now, the UK Government takes in just over 37% of our country's wealth in tax. In Norway, in 2009, the government took in 41.4%, in Sweden it was just under 47%, and in Denmark it stood at a fairly substantial 48.1% - more than 10 percentage points higher than the UK.

"That's the equivalent of more than £2,500 in tax for every man, woman and child in Scotland. Is that what the Scottish Government proposes? After all, Scandinavian-style public services and a generous welfare state do not come for free."

Mr Moore believes VAT, corporation and income tax would have to be increased if such a model was adopted in Scotland.

He added: "It's easy to say that you want Scotland to be like Scandinavia. It's harder to show how you would do it. What people in Scotland need is clarity about what an independent Scotland's economy would look like."