Businesses emerged largely unscathed from a statement designed with an election in mind, says TERRY MURDEN
Let’s face it, any budget is a case of ‘damned if you do, damned if you don’t’. It’s the mother of all financial balancing acts and every minister who delivers one wants to announce the final flourish that will capture the headlines. Shona Robison gave her supporters what they wanted. Sticking the boot into Labour.
By restoring the winter fuel payment, more spending on health and a commitment to scrap the two-child cap the Scottish Finance Secretary may have presented the SNP as the party of carers. However, this was a budget with the 2026 election in mind, aimed squarely at those who drifted from the party into Sir Keir Starmer’s arms.
With the focus on social policies there was a danger that business would once again get fleeced. In fact, it came out of it pretty much unscathed. A bit of scuffing, but no serious injuries. There was some help on business rates, with a partial copying of the Chancellor’s 40% relief. It’s only for hospitality businesses, and only for those of a certain size. UK Hospitality reckons 2,600 establishments will miss out.
But it’s a start and, despite ministers’ continued insistence that Scottish firms were benefiting from other reliefs, it’s a sort of admission that it was a move that they could no longer resist. The decision not to extend the relief to the retail and leisure sectors was almost certainly because there just wasn’t enough money. The Fraser of Allander Institute said last week that there was a shortfall, exacerbated by Scotland having more workers in these roles.
However, the proposal to impose a bigger rates burden on large retail premises and introduce a public health levy did not feature so it was a case of being thankful for small mercies.
Apart from the pledge not to increase income tax rates or introduce more bands (which would have no doubt pleased the overworked tax office), that was about the limit of the good news.
Businesses were left frustrated at the lack of direct measures to stimulate the economy beyond the flurry of non-specific pledges to boost enterprise. At least there is some certainty over the medium term outlook and that is what business always craves.
On the downside, there was nothing about cutting regulation or calls to close the much-criticised income tax divergence with the rest of the UK which is off the agenda for the rest of this parliament. There was no commitment to a long-overdue review of business rates or council tax.
Nor is there any indication that the SNP intends to pull back on the freebies. Indeed, Ms Robison reaffirmed the government’s commitment to free tuition fees, even though the clucking is getting louder. That’s the sound of chickens coming home to roost.
But that particular reckoning is for another day. In the meantime, there’s some hard bargaining to be done to get the budget over the line in February. It’s a reasonably safe bet that, despite some sabre-rattling from the LibDems and the Greens, Ms Robison and First Minister John Swinney will get a deal and avoid having to call an election. That’s just as well, as a consecutive loss of by-elections does not bode well.
The SNP leadership and its impatient supporters can take comfort from the pressure now being felt by Labour leader Anas Sarwar who is looking increasingly exposed following an embarrassing series of awkward positions on the winter fuel payments.
Mr Sarwar is also hampered by being tied to a UK party which has failed miserably to cash in on its July election victory, an own-goal of spectacular proportions. It might just let Mr Swinney’s party off the hook. For all its shortcomings and failures, at least his government is clearer about what it stands for.
Terry Murden was Editor and Business Editor at The Sunday Times Scotland, Business Editor at The Scotsman, and Business and City Editor at Scotland on Sunday. He is now Editor of Daily Business.
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