Prescott tells Scots banker to back off over tax

Click to follow
The Independent Online
John Prescott, the deputy prime minister let fly at Scotland's senior banker yesterday, telling Sir Bruce Pattullo, Governor of the Bank of Scotland, to "play around" with his money and leave the politics of devolution to ministers.

Sir Bruce angered the Government with a calculated attack on proposals for tax varying powers to be given to any future Scottish Parliament, claiming they could hit jobs and investment as well as costing the average taxpayer an extra pounds 6 a week.

The Governor's warning of the "dangers" inherent in the tax powers - to be voted on in next month's referendum - came within hours of similar criticism by Scottish Financial Enterprise, an umbrella group for banks, pension companies and other financial institutions.

Mr Prescott, out campaigning for a double Yes vote, said Sir Bruce wanted a "Yes-No" result - an outcome the Governor believes business could "live with". But picking on an opinion poll showing continued support for a parliament with tax powers, Mr Prescott suggested the bank's customers took a different view. His message to Sir Bruce was: "Play around with your money but just leave us to get on with our politics."

The bank's decision to speak out was taken at its monthly board meeting on Tuesday. Sir Bruce said it would be "inappropriate" to comment on the first question, on whether voters want a parliament, but the bank had a right to inform the electorate on the likely consequences of the tax varying powers.

"We are not urging people to vote No. If people in their wisdom decide to vote Yes on the second question then the bank will respect that."

The 1.6 million people in Scotland who pay basic rate of income tax would be directly affected, said Sir Bruce. For a man in full time employment on average earnings of pounds 18,907 it would mean a tax increase of pounds 323. "That's pounds 6 per week."

The SFE fear tax increases could also fuel the "brain drain" from Scotland. A top Glasgow tax adviser, reported in yesterday's Independent, said if the parliament used its power to raise the basic income rate by a full 3p, young taxpayers in Scotland could lose a potential pounds 300,000 over a working lifetime.

The financial bad mouthing dominated the launch of the Scottish Nationalists own "Yes-Yes" campaign in Glasgow yesterday. Alex Salmond, the SNP leader, said Sir Bruce's claims that tax-raising powers would reduce Scotland to a regional sore thumb were "pure folly".