Calls for Scottish tax haven status

Scottish flagAs speculation grows about if and how the Scottish National Party will push on to independence there's a growing lobby which sees Scotland's future as a tax haven. The clarion call is 'fiscal freedom for Scotland'. But any 'freedom' is not intended for the people of Scotland, but for big business.
This morning's edition of The Scotsman newspaper carries a quote from the Campaign for Fiscal Responsibility (CFFR) which says: "The game is not about dividing up the cake. It is about how do you attract a bigger cake within the UK by attracting businesses to come here. We in a global game competing against Geneva, Luxembourg or Dublin."

Alex Salmond

The idea is that Scotland should have the right to set its own corporation tax. The SNP's Alex Salmond has backed such a call. But, says tax campaigner Richard Murphy, "Tax haven wealth is all smoke and mirrors – and they're misery for ordinary people living there".

And there's agreement for this view form an unlikely place. Rhona Irving, an accountant with PriceWaterhouseCoopers, is quoted as asking: "How would you replace the tax take if you reduced it to these levels? How would you fund public services? Are you going to attract enough businesses to make up the deficit you would have?"

Last week on this site we ran a serious looking at how tax havens and what effect they had on the world economy. It was an ugly picture, and one set out in great detail in Nicholas Shaxson's excellent book Treasure Islands. In that book, he details life in Jersey for ordinary people.

No benefit

There is no minimum wage or unemployment benefit. Many people have two jobs to make ends meet. There is no NHS, so patients must pay fees to doctors. More than half the islanders do not have routine health checks. The demand for labour is controlled but the supply is not, so wages go down.

Meanwhile, wealthy individuals and corporations negotiate the tax rates they pay. For businesses booking tax in Jersey, the top rate starts at 2%. This is the future the SNP and the supporters of Scottish "independence" appear to be embracing. The only independence is for corporations to maximise profit after the political capture of another territory.

The CFFR makes much of the fact that it is independent of political parties. It talks of " a Scottish Parliament responsible for raising most of its own taxes" as leading to "improved public services and more and better jobs". But the end results of the argument it is pushing do not deliver any such outcome.

Policy of destruction

As Murphy says the CFFR "is all about promoting the neoliberal mantra that tax competition is good. It's left Ireland bust. It brought the world to crisis in 2008. The Crown Dependencies are heading for bankruptcy. But still they argue for this policy of destruction."

The Act of Union of 1707 was driven by the interests of the emerging merchant class and the desire of the Scottish ruling class to access the riches of the colonies. The actions of the Scottish nobility led the poet Rabbie Burns to observe "We're bought and sold for English gold..."

Now, that spirit of independence is being hijacked in support of a policy which would put the interests of big finance before those of the people of Scotland.

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