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Wednesday, September 23, 1998 Published at 15:45 GMT 16:45 UK

UK Politics

Salmond defuses taxation row

Alex Salmond will have to increase the confidence of business leaders before May

The opening day of the SNP conference in Inverness was overshadowed by the question of separate taxation and its impact on business.

In the morning, the party was received a knock from the head of the biggest employer based in Inverness, David Sutherland of the Tulloch construction group.

He told BBC Radio 4's Today programme that if the SNP led Scotland to independence and put up taxes, then his firm would move south to England.

He said he had a long list of what the SNP would have to do to persuade the company not to relocate, including maintaining the status quo on taxation and inward investment.

A list of 'corrections'

He said: "They would have to convince me their defence policies were correct, education policies were correct and transport policies were correct.

"I've used the word correct three or four times. There's a lot of correction in my mind to come into the policies."

Mr Sutherland later issued a statement describing himself as a "Highlander and a patriotic Scot", but saying he had to do what was best for the company and its 600 employees.

"In a doomsday scenario where my fears of tax differences are realised, we would inevitably have to contemplate moving the group's headquarters function and registered office south of the border.

"Our employees, of course, would remain in Scotland and so would our commitment here," he said.

Salmond hits back

SNP leader Alex Salmond was swift to respond to the problem.

He told the Today programme that the party was aiming to win next May's elections with the backing of the business community, not its opposition.

He said: "We have to be credible across a whole range of policies and I'm very confident we have the platform and the people in the Scottish National Party to do that.

Mr Salmond then contacted Mr Sutherland directly and said later that the businessman's fears were based on a misunderstanding.

"When I pointed out our policy was for lower corporation tax, he readily agreed that would have the reverse effect of more investment, more jobs, and more revenue in Scotland," said Mr Salmond.

Mr Salmond said that Mr Sutherland had agreed that this was "exactly" the sort of policy "correction" that he had sought.

'Economy will crash'

Scottish minister Helen Liddell added her views on the issue, saying that the SNP's drive for independence could damage business.

She told the Today programme: "They have one unifying ideology, that is about the concept of a separate Scotland.

[ image: Liddell: SNP is a single issue party]
Liddell: SNP is a single issue party
The SNP would use "a majority of one as a mandate to make the dash for separation. I believe that it they did that it would crash our economy and quite frankly destroy the union," she said.

Malcolm Dixon, a politics lecturer at Strathclyde University believes the SNP will have to indicate clearer "price tags" on their policies.

He said: "Before the SNP have been able to get away with pushing a policy agenda which has not been terribly costed out right to the minutest detail, the reason being they've not had a realistic chance of power."

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