Concerns raised over devolving tax powers

THE Scottish Government was warned yesterday that devolving corporation tax north of the Border would create “significant risks and costs”.

In a letter to finance secretary John Swinney, the Conservative Treasury minister David Gauke raised concerns over one of the SNP’s key demands for the devolution of more power.

It suggested that the UK government has become further entrenched in its view that only increased borrowing powers from the list brought down by First Minister Alex Salmond should be agreed to, with corporation tax joining Crown Estates properties on a list of rejected ideas.

In his letter, Mr Gauke asked what proposals for managing the “significant costs” that would arise were corporation tax to be substantially reduced. He rejected the argument that if Northern Ireland gets new corporation tax powers, with a review there under way, then Scotland also should because its “economy is significantly more integrated with the rest of the UK”.

Mr Gauke claimed the costs of a separate tax are likely to be “significantly higher” than suggested in the Scottish Government’s discussion document. SNP Treasury spokesperson Stewart Hosie MP dismissed the letter as a “Tory attempt to hold Scotland back”.