Letters: Scottish Government managed to dodge ‘tax trap’

He is right that a tax “trap” was laid for the SNP Government. He is right also that the total amount gained by the government is very small, that tax avoidance is far more significant, and that “late payments” are a very important issue if we want to encourage economic growth.

Of course, as Gordon acknowledges the full levers of the tax system and other economic matters are not available to the Scottish Government and will not be until we get political and economic independence. In this context his point about “late payment”, particularly from public authorities to small and medium-sized business, could and should be addressed by the Scottish Government now.

Where I disagree with Gordon is that I take the view that the SNP Government has skilfully avoided the tax trap set for them. If it had used the personal tax system to raise substantial public money, as Labour are demanding, it would have raised a greater amount, but not really addressed the distribution very significantly, and the Unionist parties would have attacked the SNP with some grounds.

By re-arranging the personal tax burden in the way that the SNP have, they have managed to effect some redistribution (albeit quite modest) which sends out a very good message to the voters. The Tories and their media will, of course, still attack them, but most voters will see that this attack has no substance and it will backfire on them.

In addition to that, this modest redistribution, together with the increase in public-sector wages at the lower end, will shift resources towards the low-income families who have a high propensity to spend. This through the multiplier effect will increase effective demand for small business, which is also badly needed at this time.

If the government takes note of Gordon’s point about “late payments” and takes action, this could be helpful to small business, and with the increase in effective demand, it could assist them to grow.
Andy Anderson
Saltcoats

AS a staunch Unionist Allan Sutherland (Letters, December 16) loves to bombard us with his unique and usually flawed take on economics (and also usually containing and analogy based on the price of cigarettes, on which he is an expert), which he thinks prove that Scotland cannot successfully exist outside the UK.

In his latest letter he says that Scotland’s growth at 0.7 per cent will be half that of UK growth at 1.4 per cent. The OECD vigorously disputes that figure and says UK growth will be one per cent in 2018.

Mr Sutherland states that the Scottish Government is not allowed to borrow, but he’s got that wrong too as it can borrow up to a limit (imposed by the UK Treasury) of £450 million. Which might explain where the finance for some of the progressive projects which Mr Sutherland is sceptical about in his letter is coming from.Mr Sutherland also has the required faith in the GERS figures, but would never concede that the bulk of the GERS data still comes from UK sources and 25 of the 26 income figures are estimates. And the fact that the expenditure data includes very significant amounts spent for Scotland by the UK Government, such as expenditure on Trident for example, and not on Scotland, cannot be mentioned.

However, putting the debate on the validity of the GERS figures to one side, the fact that Mr Sutherland feels he has to inflate the current deficit to £14 billion to bolster his argument also casts doubt on the general accuracy of his other assertions.
Douglas Turner
Edinburgh

THE recent House of Commons report on the HS2 Ltd annual report and accounts has a summary as follows: “During 2016/17 HS2 Ltd made £1.76 million of unauthorised payments to staff – a shocking waste of taxpayers’ money – through compulsory and voluntary schemes offered at enhanced terms well in excess of those authorised by the Department of Transport. There is no way that these sums can be recovered.’’

It goes on to criticise severely the HS2 management performance, and adds: ‘’We remain concerned that the relationship between the department and HS2 Ltd was not robust enough to prevent this and that ultimately Simon Kirby, the then chief executive of HS2 Ltd, has not been held to account for his actions.’’

I wonder what the Scottish Conservatives and the Scottish Unionist press would have made of this if it had happened under an SNP Scottish Government. You only have to see the headlines in the last two issues of the Scottish Daily Mail when reporting on last week’s Budget to get a flavour. Those in favour of Scottish independence must re-double their efforts to overcome this one-sided reporting.
Nick Dekker
Cumbernauld

REGARDING your headline “Scotland leaves UK behind with progressive tax shake-up” (The National, December 15). Could I ask how, as a public-service employee, these changes are going to benefit me? In the last seven years I have had a real-terms pay cut of 18 per cent.

On a salary of £32k (minus 14.7 per cent pension payments) I may be entitled to a two per cent pay rise. This is, of course, offset by an increase in my income tax of 1p in the pound. Which takes me back to the one per cent increase I was probably going to get anyway. Even for those in the lower band it only equates to a possible two per cent rise. Considering inflation is still at three per cent it’s a another wage cut all round.

The Scottish Government should be doing more, and not falling into the Westminster trap of thinking they can fool the electorate with a play on figures.
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