CBI Scotland responds to draft Scottish Budget 2025-26

Tracy Black, CBI Chief Strategy Officer and Devolved Nations Ambassador, said:  

“Following a tough UK Budget for business, firms looking to the Scottish Government to provide some festive cheer will be left feeling a little cold.

“With fiscal headroom in famously short supply, this was always likely to be a Scottish Budget focused on shoring up the public sector and helping households most in need. Any small hope for an injection of capital to catalyse enterprise was dashed, even as firms battle a range of costly challenges.

“The income tax divergence between Scotland and the rest of the UK remains a significant disadvantage for local firms and their ability to compete for highly skilled staff. While firms will be relieved to see commitments to no additional bandings, the reality is that the policy remains a handbrake on growth and comes against a background of escalating costs for employers.

“On business rates, firms will be left reflecting on a mixed bag. The decision not to introduce a new surtax for certain large retailers and the announcement of reliefs for properties in the hospitality sector is a welcome move. However, the failure to mirror reliefs available to retail and leisure businesses based in England, as well as the decision not to freeze the intermediate and higher property rates, will make life tougher for those firms being buffeted by a perfect storm of tough trading conditions and mounting costs.

“Ultimately, the only way to improve public services and raise living standards is to help firms thrive and deliver growth. That’s why we need business and government to work together to co-create policy that protects Scotland’s competitiveness and avoids short-changing our long-term growth ambitions. That cooperation will be crucial to making the most of the announced investment in green jobs and offshore wind.”