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Scotland’s richest man rounds on CBI chief over tax powers

The wealthiest man in Scotland, Jim McColl, has accused the CBI of not properly reflecting the attitude of many of its members nor of business leaders.

McColl, the chairman of Clyde Blowers, hit out at CBI Scotland director Iain McMillan for ­pouring cold water on handing full tax-raising powers to Holyrood.

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Speaking at the launch of the think-tank Reform Scotland’s Campaign for Fiscal Responsibility (CFFR) yesterday, McColl said it was “one person’s view”.

McColl later told The Herald he had never been a member of the CBI.

He said: “I am very aware that, in that organisation, people at the top speak about their views and it is not necessarily the members’ views.

“I was chairman of the Entrepreneurial Exchange for three years and we had a policy of not commenting like that, on behalf of our members because members have different views and it is not right to assign a particular view to the group.”

He said McMillan would not have told his members before making the statement. “The CBI has fewer than 10% of business leaders in its membership. How can you make a statement like that? It is just ridiculously misleading,” he said.

“I am friendly with a number of Mr McMillan’s members and I know they share the same view as me.”

His criticisms followed a warning from McMillan that fiscal autonomy would fragment the UK’s tax system and costs to businesses would rise as a result.

A CBI spokesman said the organisation’s legitimacy was not in doubt. He added: “The reality is that fragmentation of the laws and taxes affecting business would have costs and risks and could undermine the single market and level playing field that firms currently benefit from in the UK.

“If under fiscal autonomy Scotland’s tax income in future needed to cover all our outgoings and debt liabilities, then that may lead to consequent cuts in public funding for business priorities such as transport infrastructure, skills development and business support.”

The CFFR calls for control of most taxes to be devolved to the Scottish Parliament and McColl claimed much greater fiscal responsibility would herald the dawn of a new age of economic prosperity.

He said: “We’re very much benefits-dependent at the moment. We’ve got our hand out to take some money and then we’ve got to work out how we spend it. That’s like many of the people who are on benefits in Scotland. It’s not that we want to be like that. I think we’re better than that.”

McColl said other countries had different tax regimes within their boundaries, leaving them better placed to deal with economic difficulties.

He claimed MSPs have little incentive to improve economic growth while only 10% of revenue is raised in Scotland.

“We need to have a financially responsible Parliament where politicians take full ­responsibility for raising the money they spend and for the economy they manage. We need the levers to stimulate that economy,” he said.

The campaign’s aims are based on a study by Professor Andrew Hughes Hallet, of St Andrews University, and Professor Drew Scott, of Edinburgh University.

McColl said: “The idea is simple. The Scottish Parliament would set and raise all taxes save VAT, which cannot be varied within an EU member state, and then pay the UK for shared services like defence, foreign affairs and the state pension.

“Such a relationship would usher in an era of responsible government where Scotland is part of a union of equals each paying its own way, growing its own economy and funding its own choices.”

McColl denied that businesses would move out of Scotland and disputed claims that a separate tax system would be too complicated or burdensome.

“It is very easy to administer. The cost is insignificant compared with the advantages from a business-favourable tax regime.”

A Scottish Treasury and tax collection agency would be established to operate the new system.

Ben Thomson, chair of Reform Scotland, said: “We’re launching the campaign for fiscal responsibility to act as a focal point to try and bring people together, in as wide a church as possible, who believe in the philosophy that most of our taxes should be devolved to Scotland to allow it to raise the money we spend.”

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