Fraser Nelson Fraser Nelson

Why Kate Forbes is right about high tax

Former SNP Finance Secretary Kate Forbes (Credit: Getty Images)

I was on BBC1’s Question Time with Kate Forbes in Glasgow last week in which she was oddly loyal to the SNP government. She seems to have been the only member of Nicola Sturgeon’s government not to be deleting her WhatsApp during Covid and I suspect she’s appalled at the way Sturgeon & co placed secrecy at the heart of their Covid response. She said on Question Time that the way to grow Scotland’s economy was to attract people to come and work there. I put to her that having the highest tax rates in the UK (as Humza Yousaf has chosen to do) didn’t exactly scream “come to Scotland!”. She didn’t really respond.

But she has been more candid in an as-yet-unpublished column in West World, a community newsletter that serves Mallaig and its environs. The Mail on Sunday secured advance sight of her text and has made this its Scottish splash. She points out some basics.

Continually increasing taxes is ultimately ­counter-productive over the long term, even if you agree with it i­deologically, because it ultimately reduces public revenue. The forecasts for what the Scottish Government will raise through its latest changes to the top tax bands is just over £80 million. That isn’t to be sniffed at. But the forecasts also suggest that they’ll lose £118 million that they could have raised because of behavioural change – ­people leaving or reducing their hours or treating their income differently. That illustrates that we need to invest in people, in job creation, and in better wages. That way the tax take will increase. I’m constantly going on about the tax base. What I am really talking about is people. Calling for a bigger population, through inward migration and retaining our people, is exactly the same thing as wanting to see the tax base increase.’

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