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On the Agenda- Sunday Herald

Sunday Herald, 21 June 2009

For business, the key to the debate over the Calman Commission report is whether or not the gamble of differentiating income tax levels throughout the UK is worth taking. Many, notably CBI Scotland, are concerned about the upfront and ongoing costs Sir Kenneth Calman, right, would impose on businesses who would have to amend their PAYE systems, which are unknowable, says CBI Scotland\’s David Lonsdale "without any up-to-date assessment of the extra costs employers would face".

But for other pro-business voices, notably Reform Scotland, whose advisory board includes some of Scotland\’s most distinguished business leaders, there is no less conviction that the cultural revolution that would be brought about by maximum accountability for balancing spending with tax-raising, trumps the administrative upheaval of altering tax rates.

"Either you believe in the principle of accountability or you don\’t," says Geoff Mawdsley, director of Reform Scotland. "If you are directly raising a third of the Scottish parliament\’s revenue, it\’s still a small percentage. Calman falls between two stools."

"We accept that there would be additional administration costs if there were two tax rates, but the issue of accountability comes first. The Scottish people aren\’t stupid. Having to raise the money you spend will lead to efficiencies, and the creation of an environment for growth. If we spend the money in a more productive way, we can hold spending to more realistic levels."