THE SCOTTISH GOVERNMENT has reversed its pledge to slash three points off corporation tax.
SNP leader Nicola Sturgeon announced the policy U-turn when the party unveiled its new 84-page economic plan, Scotland’s Economic Strategy (March 2015), yesterday.
“We have no intention to engage in a ‘race to the bottom’. Instead, we will use these powers to create a long-term competitive advantage, not through a blanket approach, but by using targeted changes,” the plan says.
The latest version of its economic strategy is built around four core areas – investment, innovation, internationalisation and inclusive growth.
A key driver of this economic thrust is the Scottish Government’s intention to create a new Scottish Business Development Bank to help foster greater growth opportunities for small and medium sized firms.
First Minister Nicola Sturgeon outlined the policy shift alongside a raft other pledges designed to eradicate economic inequality.Despite the change of emphasis, the UK government has so far rejected calls for devolution of corporation tax.
The SNP leader referred to the Organisation for Economic Co-operation and Development (OECD) estimates “that inequality actually reduced the UK’s economic growth by 9% between 1990 and 2010 – by that reckoning the cost of our inequality has been a total loss to the UK economy of £100bn, almost £1,500 for every person who lives in the country. That loss is also an indicator of what we stand to gain economically if we put tackling inequality at the heart of what we do.”
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