HERE we go again. Michael Fry parroting the political dogma of the ruling party down south, saying that Scotland has the characteristics of a socialist state (Scotland’s tax regime for business is the real hostile environment, November 6). He is entitled to his opinion of course, but he has little evidence to support this claim. In fact, even his own examples contradict this assertion. To read his article you would think that Scotland was suffering paralysis as a result of the burden of high taxation and government bureaucracy. Before jumping to conclusions, let’s examine the evidence.

Personal taxation in Scotland is higher than that in the rest of the UK, but we need to examine what the extra income achieves as well as who is paying more. Firstly, Scotland’s economic output is the highest in the UK except for the Greater London area, and its growth, measured by the increase in its Gross Domestic Product, GDP, is highest in the UK, full stop. It has a significant net surplus of exports over imports. Wales is the only other part of the UK which has a surplus, but it is only a small one.

Scotland has been a land of innovation ever since the days of the Scottish Enlightenment and remains so to this day. The largest proportion of applications for patents to the European Patent Office, around 37%, are applied for from London, not because the research was conducted there but because the company was registered there. Despite this “London bias”, 9.7% of all UK patent applications were from Scotland. This compares well to the 8.3% of the UK population that live here.

Scottish students do not have to pay university tuition fees and there is some circumstantial evidence that, because they spend less time working to cover their costs, they may be more innovative and productive. It could be said that free prescription charges and dental check-ups and our shorter hospital waiting lists are not just a benefit to the individual but also return workers to the workplace quicker and result in better productivity. Taxes pay for these services and tax avoidance deprives the economy of these benefits.

Michael quotes Norway and Switzerland as more productive than the UK. Yes, and the burden of taxation in Norway is one of the highest in the world, at around 45% of GDP. Income tax rates in Switzerland are just over 40% for all tax-payers. Levels of business taxes in the UK, at 19%, soon to be reduced to 17%, are lower than in Norway, at 23%,

and just a fraction of a percent higher than Switzerland, at 16.55%. The Norwegian sovereign wealth fund, derived largely from the country’s oil and gas reserves, has a value of $1 trillion to invest in infrastructure, a policy which we in Scotland are prevented from following.

Scotland is not taxed too much, but the Westminster Parliament has voted to reduce tax for the richest members of society. It has also failed to address large-scale tax avoidance by UK businesses. This is the result of a belief in “neo-liberal” economics, which was tried out during the reign of Margaret Thatcher as PM, when it was described as the “trickle down” theory. It was discredited then, but still looms large in the economic policy of our Westminster government.

I do not advocate a return to the days of “supertax” of 90%, but I believe Scotland has it about right.

Pete Rowberry

FOR once I disagree with Mr Fry. For one thing, Norway has higher tax rates than UK. Public pensions are no longer what they were, and cost the individual considerably more (unlike CEOs etc). And I scarcely think that we will be regarded as a high-tax country with both such small differences when the median wage is around £25K, and we are not yet a country with control over our finances.

Norman Mackenzie