BORING though the UK Budget was, it still gave food for thought in two ways. One was whether it matched Chancellor Philip Hammond’s claim that “austerity is coming to an end” – to which my answer in this column last week was no; certainly not if you look at the dismal growth forecasts following on from his measures.

The other concerned the Budget’s particular effect on Scotland, now that a wide gap is opening up between the points at which workers north or south of the Border move to the higher rate of income tax. This is what happens to Scots on a salary of £44,300 a year, above which they pay tax of 41p in the pound. Hammond announced that, In England from next April, only people earning £50,000 or more will be taxed at the higher rate, which remains at 40p in the pound, while everybody else pays 20p in the pound.

The Chancellor of the Exchequer was already planning this change, but not meaning to introduce it until 2020. Now, in an effort at a Brexit boost, he will bring the tax cut forward. It is by any standards a minor move. But it’s the thought that counts. After a decade of squeeze, the Tories obviously want to start winning back their lost reputation as a low-tax party.

By contrast the Government of Scotland glories in its own form of fiscal rectitude, of keeping both taxes and spending as high as possible even though the ultimate parameters of our system are set at Westminster. So Nicola Sturgeon slammed Hammond’s “absolutely damning and shameful Budget”. Her Finance Secretary Derek Mackay, due to present his own package next month, promised a “fairer, more progressive path”. We can presume there will be no tax cuts for anybody, then, at least not for Scottish train drivers, opticians and fire chiefs (the sort of fat cats who in our country earn between £44,300 and £50,000 a year). Nor are there likely to be any such cuts while Mackay’s path to the sunlit uplands of social justice remains so long and steep.

In other words, within a year of gaining the right to set our own rates of income tax, we see a clear difference in policy and outlook between Scotland and England, one that I would expect to persist as long as the political complexion of the two nations differs. Scotland will get higher taxes, England will get lower taxes. We then have perfect conditions for testing which option is more conducive to the welfare and prosperity of two closely comparable western societies in the early 21st century.

This is, of course, a debate which has been raging for some time, not only in the UK but also right across Europe and America. The weight of the evidence is that taxes can indeed rise so high as to drive some rich people into emigration – think Sean Connery – whereas if held low they will keep everybody contentedly at home. In the 21st century it is a growing problem, because societies are becoming more mobile. This is a good quality for capitalist societies to have (socialism, by contrast, tried without success to make societies immobile).

Capitalism works towards its maximum potential through the most efficient application of factors of production, one of which is labour. We should therefore try to get our workers into jobs where they can produce the most, and encourage them to change jobs if they can produce more elsewhere – for instance, if an advance in knowledge creates a new industry.

Every year the Massachusetts Institute of Technology issues a list of the 10 best innovations over the last 12 months. In 2018 it includes a method for printing out metal spare parts (for just-in-time manufacture), artificial embryos, domestic (as opposed to corporate) artificial intelligence, zero-carbon natural gas, together with others I can’t even understand, let alone write about. The optimistic message is that youthful geeks should start commercially exploiting these discoveries for themselves and then they will be billionaires by the time they are 30, just like Steve Jobs or Mark Zuckerberg.

All this is about as far away as you can get from anything that might reasonably be called socialism. By these standards Scots are already living in a socialist society, even if it nestles in the bosom of the capitalist UK. Just a small example: Our Government enforces right across the public sector a policy of no compulsory redundancies, even for people who have seen their familiar place in an organisation vanish and who would be much better (for Scotland as well as for themselves) going off and doing their own thing.

As we operate our system, such people have no need to shift from being less productive to being more productive. This is bad for us all.

Some do make a useful move, of course. But for many more it is much too easy to stay where they are and go through their occupational motions till they pick up their inflation-proofed pensions at the end of a working life which will have been quite useless for the purpose of supplying goods or services to a market.

To show it’s bad for Scotland, I’ll point out how far we have fallen behind the Swiss or Norwegians who today produce about twice as much in each working week as we do. They also earn much more money: On average £60,000 a year for the Swiss, nearly £40,000 for the Norwegians, £27,000 for us. There can be no sustained increase in wages without higher productivity. The extra cash for the public sector pay bill now being flung about by the Scottish Government is water on sand.

It is not as though this Government tries hard to ease things for those few Scots who might venture into the real capitalist world of innovation and progress. The riskiest time for a business start-up is the first two years, when the entrepreneur has to bear the initial costs before getting back any cash flow from a successful product. Conditions may be starting to improve a bit now, but year on year from 2010 to 2016 the annual number of Scottish start-ups actually fell. No wonder. Quite apart from the financial aspect, in Scotland going bust is a stigma carried by the temporarily bankrupt for the rest of their lives. In California it is a normal part of business education, if anything a positive line to enter on the CV. So, when it comes to enterprise, Californians rush in where Scots fear to tread. Who are the true fools?

The tax regime in Scotland reflects the indifference to capitalism of a Government always keener to stress how much it will spend on us than how much it will leave us to spend for ourselves. For the moment it can argue that the consequences are minor: Not many Scots will up sticks and move to England merely because they are being charged an extra 1% in income tax. But that could mark the start of something bigger for a nation aiming before too long to take back control of its own economy.

To define ourselves as a high-tax country rather than a low-tax country is precisely the wrong thing to do when we lie right on the edge of Europe, far from our markets.

Our entrepreneurs of the future will need to think hard whether they really want to stay in this hostile environment or to go somewhere else – not, after all, a solution to life’s problems with which Scots are unfamiliar.