Academic notes ‘risk’ that higher tax rates put people off coming to Scotland

There is a “risk” higher income tax rates will dissuade people from coming to Scotland, the former head of Glasgow University has said.

Professor Sir Anton Muscatelli also said “difficult choices” lie ahead on tax.

The academic retired at the end of September after 16 years at the helm of the institution.

Scottish Labour commissioned him to publish a report on regional economic development in Scotland, which is due to be published on Monday.

He told BBC Scotland’s Sunday Show that Scotland has not had an integrated policy on economic growth for much of the devolution era.

He said: “Scotland doesn’t have a comprehensive industrial strategy, it has a more piecemeal policy.”

Asked about the transition to renewable energy, he said: “It’s going to be a decade of hard yards but it will absolutely be of benefit to Scotland.”

Discussing the tax system, he said the higher rates in Scotland, which apply to those on larger incomes, help pay for public services.

He said: “We can’t just focus on tax rates, we have to focus on growth.

“The danger is – and this is what I’ve heard from people who I discussed elements of the report with – they’re worried that people are perhaps being put off.”

He said he wanted to highlight a “risk” of people being put off from coming to Scotland as a result of higher taxes, saying there is not currently “fantastic evidence” on the impact of the Scottish income tax rates.

The academic continued: “Ideally it has to be front of mind of government that you can’t deviate too much from UK-wide rates because otherwise you could be less competitive.

“All I’m saying to future Scottish governments is: think about it.”

He said the current Scottish Government faces “difficult choices” if the Chancellor choses to raise income taxes in her Budget later this month.