The recently published Barclay review of Business rates in Scotland makes interesting reading.

The scope of the review has been constrained in a number of ways, not least by the stipulation that its recommendations should be revenue neutral. That requirement is a shame because one of the problems with the governance of Scotland and the UK is that local government has too little financial autonomy, relying for most of its funding on central Government handouts rather than money raised directly from the local community. Something we should look at is how local authorities could have more financial freedom, authority and accountability - but that is for another day.

The section of the Barclay report which really caught my eye though was not the easy political hit that Rates should be slapped on private schools (so why not Universities?) but the proposed reduction in the large business supplement to bring it into line with England. The report specifically says that this recommendation is “in the context of current Scottish Government policy to ensure that Scotland is the best place to do business in the UK”.

What the report, prepared by independent and sensible people, is therefore recognising - and in financial terms it is by far the biggest individual proposal they make - is that it is stupid to tax wealth generating business more than your nearest competitor - in this case England - does. This is hard to argue with - if you tax people more they take action to reduce their tax burden - including moving away and paying lower tax elsewhere.

I hope the Scottish Government takes heed of this recommendation but even more I hope it really learns from it.

We need to accelerate Scotland’s growth in order to reduce our unsustainable fiscal deficit and pay for the public services we want. The way to do this is through lower tax rates - not just to match the levels in England but sufficiently below them to attract people and businesses to Scotland who will drive our economy forward.

In particular we need to recognise that businesses are not inert objects but essentially groups of people. There is no point in having a lower rate of corporation tax in Scotland than in England if , when the CEO of the Scottish business gets home , he or she pays higher income tax, higher domestic property tax and higher school fees. You cannot incentivise people at the office and then stuff them at home - it simply won’t work.

Here are some concrete suggestions.

First, LBTT. The Scottish Government’s first go at their very own tax - and quite clearly a bit of a mess which distorts the housing market because its take is set too high as values rise. Why not cut all the rates by 40% but apply the tax to the seller as well as the buyer? The result is the burden on buyers struggling onto or up the ladder is reduced, sellers (who are largely the ones with the wealth) contribute too and overall more tax is raised.

Second, income tax. Abolish all but the basic rate for anybody who has been tax resident in Scotland for 3 years. Result? More not less tax for the Scottish exchequer and an influx of exactly the business owners and entrepreneurs we need to build great companies, create jobs and help pay for our public services.

The Barclay report has shown the way. Differential tax rates with England really do matter. Instead of just removing the problem of higher business Rates why don’t we grasp the opportunity of lower tax rates across the board?

Pinstripe is a senior member of Scotland's financial services community.