As one who recently sat through discussions on the coming Scottish rate of income tax and the defining of a Scottish taxpayer with 10 Treasury officials at the other end of a video camera and about five people, most of whom were actuaries, sitting in an office in the bowels of Melville Crescent, I can tell members that things are pretty painful as they are. If that is an example of how long it will take to do things, we will have challenges in the administration and definition of income tax.
You have at least hinted that we have a real concern that, because the Scottish Parliament will have tax powers, it will think, “Great—we can raise taxes.” We have all made the point that the implications of such decisions should be thought about. Around the world, small countries tend to be high-tax countries. I can honestly tell members that a significant number of our members would just run across the border if our economy became one with a high individual tax rate. That is not a threat; it is the reality. It will not be a place that people will rush to work in. There is a level and a balance in that. That has been well publicised before at certain points at the UK level, as well.
To refer to a point that Stuart Patrick made really well earlier, the IOD has been strongly against devolving corporation tax, but I suspect that I will have to hold back my members in Scotland from demanding that if it is devolved to Northern Ireland. There will be challenges if that happens. There is an issue there, as well.
We can understand the devolution of income tax. As Ross Martin said, it is personal. We all have a system and we all have a number already. A person will have an “S” at the end of that if they are in Scotland. That is relatively straightforward, but that in itself will take some time. To be honest, for bigger employers, there will be a relatively small entry on a computer system. For smaller employers, it will inevitably be a bit more difficult, but the system will be in place, and we can work on that.
By the time that the Smith changes come along, we will probably be able to make things work mechanically, but please do not make that a licence to raise taxes automatically.