STUC concerned by move to devolve corporation tax

The Scottish Trades Union Congress has come out against further powers over business tax being devolved to the Scottish Parliament.

The STUC attacked the "hocus-pocus economics" of the Scottish government's plans for taking over control of corporation tax from the UK Treasury.

General secretary Grahame Smith disputed the claim that a cut in the tax rate would "unleash" growth.

He argued it could instead lead to inequality and poorer public services.

Mr Smith's views follow on from criticism from the employers' organisation CBI Scotland, which said the cost of running separate corporation tax regimes in Scotland and the rest of the UK outweighed the potential benefits.

The SNP government at Holyrood stressed that high-profile figures in the business community disagreed on that, and wanted to see Scotland offering a lower business tax rate.

In the STUC submission to the Scottish government's consultation paper, Mr Smith said: "We simply do not believe that cutting the rate of corporation tax will unleash a wave of private investment in Scotland.

"But we are extremely concerned that it would exacerbate inequality, undermine economic stability, increase business short-termism and threaten the funding of essential public services."

The trade union chief added: "There are no short-cuts to long-term, sustainable economic growth in Scotland.

"This paper does us all a disservice by suggesting that simple policy levers exist which, if utilised, will dramatically increase the growth rate.

"Scotland needs thoughtful policy development in order to enhance broadly based prosperity in a global economy.

"The last thing we need is the hocus-pocus economics of this discussion paper".

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