Plans to cut corporation tax have been dropped by the Scottish Government in a shift from Alex Salmond’s pre-independence policy.
First Minister Nicola Sturgeon launched her economic strategy, which focuses on “targeted changes in tax allowances” rather than a “blanket approach”.
This is in contrast to the three-point cut in the levy promised by her predecessor in the White Paper if Scotland had voted Yes last September.
While corporation tax is still reserved to Westminster, the Scottish Government has long argued for it to be devolved to Holyrood, with the new strategy document arguing power over it and other measures, such as capital gains tax, could be used to help rebalance the economy.
Ms Sturgeon pledged the economic blueprint would “put tackling inequality at the heart of what we do”, insisting that work to build a fairer Scotland would also create a more prosperous nation.
On corporation tax, she said: “What we are signalling here is we would see in the years to come real benefit of having control over corporation tax, to use that in a targeted way to boost R&D, to encourage investment in growth areas of the economy, rather than in a blanket way.”
The economic strategy is focused around four main themes the need for investment, innovation, internationalisation and inclusive growth.
As part of it, the Scottish Government plans to set up a Scottish Business Development Bank in a bid to help small and medium-sized firms expand and grow.
Andy Willox, the Federation of Small Businesses’ (FSB) Scottish policy convener, said: “Scottish Government ministers may wish to focus more tightly on delivery too many well-meaning initiatives suffer because of clumsy implementation.”
CBI Scotland director Hugh Aitken said: “To make sure growth benefits everyone, we need to boost productivity by fostering investment and making sure our workforce get the skills they need to compete in a globalised world.”