04 Sep 2013

The findings of a new report by the Scottish Parliament’s Information Centre have today backed up analysis by the Scottish Government that a reduction in corporation tax can increase economic growth and boost employment.

Analysis by the Scottish Government has shown that a 3% reduction in Corporation Tax could grow Scotland’s GDP by 1.4% and create an additional 27,000 jobs.

Today’s report from SPICe confirmed that “it is reasonable to suggest that in most plausible scenarios a 3% cut in corporation tax will expand the economy, create jobs and increase investment. Exports would also be expected to rise in absolute terms and as a share of Scotland’s economy.”

The SPICe paper also points out that the Scottish Government’s analysis was based on the 2010 EY Attractiveness Survey and if the 2011 or 2012 surveys had been used in the model instead, the predicted increase in employment would have been even higher.

Commenting, local MSP John Mason, who is also Deputy Convener of the Parliament’s Finance Committee, said:

“Today’s report provides extremely welcome backing to the Scottish Government’s analysis of what we could achieve with powers over Corporation Tax.

“The report from SPICe confirms the robustness of the Scottish Government’s analysis and indeed points out that using more recently published figures would see an even greater predicted impact on jobs and growth.

“Creating 27,000 additional jobs in Scotland would provide a huge shot in the arm to Scotland’s economy and be a major spur to economic growth.

“As an independent nation, taking decisions about Scotland in Scotland we will be able to use the powers over tax and welfare to build a fairer, more prosperous country.

“That is one of the clearest gains that a Yes vote in next year’s referendum will secure for people living in Scotland.”