Entrepreneurs Sir Tom Hunter and Lord Willie Haughey have launched a fresh debate on how best to inspire inward investment for Scotland, pointing to Ireland as an example of a nation that has successfully attracted many of the world’s largest corporations to its shores.
Speaking on the Go Radio Business Show with Hunter & Haughey, Sir Tom said: “About 18 months ago The Hunter Foundation got Oxford Economics to do a piece on the Scottish economy and what could be done to get our growth rates up.
“One of the new things we’re beginning to look at in this context is what’s happening across the water in Ireland. There are some incredible numbers there.
"Ireland is projecting a 10 billion Euro surplus this year with a 16 billion Euro surplus estimated for 2024. Just to put that in context, the GERS figures show Scotland has a net fiscal balance deficit of £23.7 billion.
“So we’ve been looking into why this is the case. The big headline for me is 20 years ago, maybe longer, Ireland backed strategic leadership. There were some clever people and they thought about this and they set out a big vision for the longer term. They got the tax policy correct, which was about focusing on the tax take and not the tax rate.
“They got their universities into thinking about producing the talent. Their inward investment was for what I’m going to call ‘sticky jobs’. These are not jobs that come and go.
“These are jobs for Dell, Google, Facebook, et cetera. And Ireland has a remarkable statistic on this: it is the European base for 24 of the world’s 25 biggest biotech and pharma companies. Who knew that?
“So we’re trying to establish how we get this level of clever, strategic leadership in Scotland and the rest of the UK to set out a growth plan that will benefit all of our citizens. The ‘Irish experiment,’ as some call it, has been a real success.”
Lord Haughey revealed he had some personal knowledge of the Irish success story, thanks to his previous role as chairman of Scottish Enterprise Glasgow.
“Back in the early 2000s we looked at Ireland and all of this actually started with Charles Haughey when he was Taoiseach. He asked: ‘What do we have to do to encourage the 10 largest companies to base themselves in Ireland?’.
“Well, they’ve done many things since but the pivotal action was obviously in corporation tax and they absolutely succeeded there. They got the top 20 companies in the world to locate in Ireland.
"But what they achieved was a tax take. I still believe that at the moment in Ireland corporation tax is set at 10%. In the UK it’s much, much higher. But you have to ask yourself why Microsoft paid 10 times more tax in Ireland last year at 10% than it did in the UK.”
Lord Haughey believes beneficial use of tax take is an area of inward investment Scotland should be looking at more closely.
“This is not rocket science but you need to be bold,” he said.
“Where are the people in Scotland with the clever ideas? Why don’t we have this whole ‘can do’ attitude to the clean energy drive, for example? Why don’t we lobby the UK Government to get a green investment policy for the whole of Scotland that allows us to have a different tax on anyone willing to come and invest in clean energy?”
Sir Tom agreed, adding: “This is the kind of clear, strategic thinking that sets out a country’s ambition for all its citizens. This isn’t about making rich people richer. This is about companies coming, creating the jobs, paying their tax, which then goes into the Health Service, cuts waiting times, goes into education ... I really don't understand why we’re not doing it.”
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