PINSTRIPE
I have just returned from a trip to the USA which, I have to say, reinforced my pride in being British.
There may still be class issues in Britain but they seem smaller than those in America where money appears to be the key to everything. If you don’t have it the doors don’t open. Can you believe that going to University costs about $250,000 and you have a better chance of getting into the place of your choice if one of your parents went there?
Arriving back in Scotland I learnt that to get its budget passed the SNP Government had done a deal with the Green Party to allow Councils to introduce a tourist tax and a workplace parking tax. Cue outrage all round, the tourist industry will apparently be devastated and the parking tax is a new poll tax. The Greens are the pantomime villains. Except of course that they are not. What they have done is entirely sensible and points the way to the future.
Scotland has a strong tourist industry which has excellent prospects. Edinburgh is the jewel in the crown yet when I look at the city I think it is disgusting, rubbish on every street, chewing gum on every pavement and graffiti commonplace. It’s not like this elsewhere, in New York you see street cleaners everywhere - the place is tidy. When I checked out of my hotel there I found I had paid 5 taxes, a room sales tax, room occupancy tax, city occupancy tax, a destination fee and a tax to fund the local conference centre. Does New York’s tourist industry lie in ruins? It does not.
Edinburgh Council now has the power to introduce the £2 a night tax it wants to charge. I hope they put the money raised to good use in improving the state of the city. In the long run accommodation providers will only benefit from Edinburgh being a better-quality destination, they should welcome this tax not fight it.
The workplace parking tax has even more merit. Brexit is not the greatest challenge we face - global warning probably is.
Taxing the use of fossil fuels, making people think twice about the energy they consume and use public transport rather than take their cars to work in congested cities is a good thing. What is vital is that the money raised goes into better public transport and not the general pot. The Government should avoid dividing people into good and bad workers - exempting NHS properties from the tax is a mistake as is allowing employers to pay this tax rather than pass it on to those who park their cars.
As well as being individually sensible these two taxes are part of a direction of travel which we must embark upon. Scotland has a large budget deficit which is unstainable. Income tax rates have already reached a level which threatens to be counterproductive, reducing rather than increasing the tax Scotland collects. We must find other ways to raise tax which don’t damage the economy and instead shift more of the burden on to those who use services or create public cost. Tolls on motorways and bridges; higher taxes on sugar, junk food and food flown around the world so that we can eat it out of season ; higher taxes on alcohol and taxes on non-returnable packaging are examples of what we must look at.
Taxes have to rise. The task facing the Scottish Government is how to tax intelligently rather than stupidly. The Greens have shown the way this time but the SNP need to grasp the nettle and show some leadership themselves.
Pinstripe is a senior member of Scotland's financial services community.
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