Millionaire urges Scotland to emulate Singapore to reverse ‘managed decline’

One of Scotland’s best known businessmen has urged the Scottish Government emulate Singapore by cutting tax and red tape in an effort to reverse what he described as “managed decline”.

Sir Tom Hunter commissioned a report by Oxford Economic through his foundation, which found productivity per worker in Scotland is half of that of the south-east Asian country, while the top rate of tax is twice as high.

The Scottish Government over the past decade, Sir Tom said, had not been pro-business, though he conceded First Minister John Swinney’s regime had improved the situation.

“We’re ahead of an election in about a year’s time, and I’m looking for the big ideas, the bold ideas for Scotland,” he said on BBC Scotland’s Sunday Show.

“If we look at where we are, a kind of state of the union, not in a political sense, our education standards are falling, our health service is struggling and we have a lacklustre economy.

“So if this was a business, which is my background, I would be looking to see where my competitors were doing better than me.”

Pointing to the country’s tax regime, the businessman said: “How do we pay for our NHS, our education, the civil society that we all want?

“Well, frankly, Governments set a tax regime to raise tax from you and me and business and they decide how to spend it.

“My proposition is that Scotland has not been a pro-business friendly country for the past 10 years.

“It’s getting better under John Swinney and Kate Forbes, but under Nicola Sturgeon it was not business friendly and that was the to detriment of Scotland that’s why I say managed decline.

“Let Government sit with business and produce their business policies with business, not to business without any consultation with them.”

Sir Tom has previously commissioned a similar report based on the Republic of Ireland, which he said was “completely ignored” by the government led by former first minister Humza Yousaf.

“He did invite us in and his cabinet was there and he listened and then he did the complete opposite of what was in the report, in terms of tax,” he said.

In the only budget written under Humza Yousaf’s premiership, the government increased the top rate of tax by 1% and created a new 45% rate.

“I am all about growing the tax take, and it’s not about the tax rate,” Sir Tom said.

“If we can get better wealth creators to Scotland, they will create the jobs, they will pay more tax, not because of the rate, because of the take.”

Sir Tom also suggested paying the First Minister more, pointing to the 2.2 million US dollars made by the Prime Minister of Singapore to “encourage better people into politics”.

Asked if the country’s leaders aren’t the best people for the job, Sir Tom said: “I would say we could do better.”

Social Justice Secretary Shirley-Anne Somerville welcomed Sir Tom’s intervention.

Appearing later in the same programme, she said: “I think what Sir Tom has quite rightly done, as I hope business people and those indeed in charities and elsewhere will do, is present us with some issues that they want the Government to tackle and then challenge the Government to step forward.

“So I very much welcome Sir Tom’s report.”

The Social Justice Secretary did however take issue with his characterisation of the treatment of the previous report, saying it was “slightly unfair” and that there were things with which the Government disagreed.

The minister also defended the Scottish Government’s income tax policy, saying: “The overall progressive taxation system that we have as compared to the UK… allows for £1.5bn more to come into the system than we would already have.

“I appreciate there may be people who wish to see that and can make the case that there will be changes in the longer term about what will happen with tax takes.

“But in the short term, as we are setting our budget… if you were to change those decisions, that would see £1.5 billion coming out.

“Of course, what those tax takes allow us to do is that social contract with the people, whether it’s free tuition, free prescriptions, whether its our early learning and childcare offer for three and four and eligible two-year-olds.

“Those are aspects that many people, also who pay higher taxation, can benefit from.”

Scottish Tory economy spokesman Murdo Fraser said the report was “utterly damning” for the Government.

“He says that their policies have been anti-business and anti-growth, that they have ignored Scottish companies, and that Scots’ incomes and essential services have been badly damaged as a result,” he said.

“Without economic growth, we will never reverse the SNP’s disastrous policies and improve living standards, provide jobs and fund essential services.”