THE SCOTTISH Government has been warned that it could take years to “repair the damage”if it raises income tax in next week’s Draft Budget.

Tim Allan, president of the Scottish Chambers of Commerce, spoke out against tax rises in the absence of independent economic impact assessments in a speech given last night in the presence of First Minster Nicola Sturgeon.

Speaking in his first annual business address, Mr Allan said: “Our concern is that, at a time of sluggish growth and faltering business investment, a competitive Scotland cannot afford to be associated with higher taxes than elsewhere in the UK.

“A high-tax Scotland would be easy to achieve but the damage could take years to repair,” he said.

It is believed that Ms Sturgeon’s government is considering changing the tax system.

Mr Allan said that unless tax revenue were ring-fenced to drive growth and create jobs, the cost in terms of lost investment was incalculable.

Turning to Brexit, Mr Allan said that with delays in the negotiations already leading businesses to implement contingency plans it was vital to “impress upon our political leaders to work with energy, focus and momentum in securing a deal which is good for business and the economy”.

He also said the Chamber could not “hide our disappointment” that the pledge to reduce and eliminate Air Passenger Duty in Scotland has been postponed, due to legal technicalities.

“The economic case has been made, accepted by Government, so let’s get on with it and remove this growth inhibitor to trade.”