Before the Scots voted “NO” to independence last week, key MSP figures were looking at how economic changing financial mechanisms could change.
John Swinney, Cabinet Secretary for Finance, Employment and Sustainable Growth in the Scottish Government stated “We want to create the most supportive business environment we can to help create long-term, secure growth with greater job opportunities and more prosperous businesses.”
First Minister Alex Salmond with Mr Swinney unveiled a report that sets out the “opportunities” ahead, just days before the publication of the SNP administration’s formal blueprint for independence.
The economic report focuses on a “distinct approach” to corporation tax, capital allowances, national insurance and access to finance.
Mr Swinney said: “The report provides a detailed analysis of Scotland’s economic position and the range of economic policies that any future government of an independent Scotland could use to create a stronger and more prosperous Scotland.
“The government of an independent Scotland may choose to use these additional economic levers in a number of ways.
New policies on business taxation, specifically tax rate allowances and the simplification of the current tax compliance system, could have been looked at.
Independence could have provided the government of an independent Scotland with significantly enhanced powers to boost the competitiveness of its business base and rebalance the structure and composition of the economy.”
It raises options including a “distinct approach” towards targeting corporation tax and capital allowances to encourage private sector growth and investment, particularly in small to medium enterprises.
A new Scottish parliament could have legislated for these changes and this will of course introduced a difference in Capital Allowances regimes North & South of the Scottish border, and could very much influence regional decisions about property ownership & investment.
Even though the vote for independence was a NO, It is clear to see that Capital Allowances can be used as an economic influencer to business investment, just look at the recently increased AIA. For Scotland, it could be easily used as a powerful tool to encourage inward interest in its new independent state.