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National Insurance is key to job creation.

Byline: Torcuil Crichton THE HEART OF POLITICS follow @torcuil

BOFFINS often make a reasonable case if you are willing to listen, though in a high-octane political world, we are all adept at not listening.

When the SNP's deputy leader candidate Stewart Hosie MP strummed at a Commons' committee session that corporation tax would be a powerful tool for the Scottish Government, the tune was familiar.

After all, the lower the corporation tax, the more businesses and jobs that could be attracted to Scotland, or so the song goes.

Alan Trench, professor of politics at the University of Ulster, politely disagreed. It took all of two minutes for the prof to deconstruct this SNP totem.

Prof Trench said devolving the tax within the UK would simply encourage "brass plating".

Companies would move their head office to the low-tax area while keeping their jobs and real profits wherever they please.

Also, incorporated companies, and there are not legions of them in Scotland, employ expensive accountants to disguise their profits and tax liabilities.

A far better solution, said the independent expert, is to devolve control of employers' National Insurance contributions.

If the Scottish Parliament had the power to lower National Insurance contributions, companies could be easily encouraged to move jobs to Scotland.

It would also have the benefit of being a job-creating incentive for all businesses, not just those who pay corporation tax.

The money lost would have to be found somewhere else, presumably from the extra economic activity created.

It can be argued that National Insurance is part of income, so you would be devolving another slice of income tax to the Scottish Parliament.

Like Labour's position on retaining most income tax at Westminster, it sounds reasonable enough, if you listen long enough.

I am sure that the Smith Commission on devolution is going through that level of granular detail each day but if its conclusions are nuanced, rather than banging a big drum, they might not get a hearing.

The smoke signals coming from inside the room indicate the SNP delegation appear not to have detailed economic modelling on implications of corporation tax, or proposals like the devolution of welfare or pensions, or much else.

It cannot be that demands for devo-max are just devo-assertion.

The trouble with the constrained timetable for the Smith Commission is that each of the parties will have to compromise with each other. The job is to work out the best deal for Scotland, in very short order, not to make face-saving concessions that keep totem poles standing.

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Title Annotation:Editorial; Opinion Columns
Publication:Daily Record (Glasgow, Scotland)
Article Type:Editorial
Geographic Code:4EUUK
Date:Nov 6, 2014
Words:422
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