While that’s a small portion of the total, it may a indicator of what other sectors have to be prepared to deal with.Already, Scotland is introducing rental control in order to make housing more affordable. While the goal is good the method will produce the opposite of affordable housing. Landlords will quickly take their housing units off the residential rental market, or will let them deteriorate. That’s certainly what happened in New York.
The real answer to affordable housing is to let more housing be built. However, the planning system is not transparent and is costly. Those extra costs and the high risks of failing to get planning permission ultimately mean hosuing costs are higher than they would otherwise be. As with the tourism sector, those in the construction field will in all likelihood ditch their Scottish efforts in favor of places, likely elsewhere in the UK where building homes is easier and more profitable.On top of those problems the Scottish government charges higher income taxes on all individuals except those being paid the most modest salaries. That gives anyone with a much sort after talent and a high pay package have an incentive to move to a lower tax location, such as England.
When you put these reasons together it quickly becomes clear why Scotland has such a low level of business creation. The current leader, who is now under political pressure, will likely not change course on these policies so would-be small business owners will likely not create a start up or instead may move somewhere else.
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