CBI Scotland responds to draft Scottish Budget 2026/27

14 Jan 2026 11:51 AM

Michelle Ferguson, Director, CBI Scotland responds to draft Scottish Budget 2026/27

“With few surprises in the final Budget before the election, many business leaders will view this as a missed opportunity for the Scottish Government to focus on relentlessly pro-growth policies that support firms grappling with economic headwinds and high costs.

“The three-year transitional relief and the 15% retail, hospitality and leisure relief announced on business rates may help Scottish firms facing a competitive disadvantage with rivals  in England, however these measures will have a limited effect overall. Tinkering around the edges fails to tackle the fundamental problem: that the system as a whole is broken. Firms desperately want a comprehensive review of non-domestic rates, not added complexity, to avoid further damage to investment, profitability, job creation and stalled growth.

“Continuing tax divergence from the rest of the UK – particularly for middle earners up – leaves firms unable to recruit highly skilled employees from across the UK and beyond and risks pushing even more talent South. The government must commission an independent review of its uncompetitive tax strategy. However, reductions in basic and intermediate tax thresholds will benefit many employees in Scotland, taking them out of the trap of fiscal drag and allowing them to keep more pay in their pockets as wages rise.

“The £200m earmarked for completion of the A9 dualling programme by 2035 leaves no excuses for failing to complete this vital infrastructure project. The ten-year Infrastructure Strategy is also a vital opportunity to move toward the stable, long-term framework businesses crave.

“With Scotland’s hard-earned reputation as an energy powerhouse built on decades of North Sea expertise and investment, long-term growth and our decarbonisation targets will be won or lost on whether we have the infrastructure to underpin it. Businesses want a clear roadmap for decarbonisation and energy infrastructure, bringing together its climate and energy plans to ensure Scotland’s at the forefront of UK energy planning.

“CBI Scotland welcomes the Scottish Budget’s £5 billion commitment to climate-positive spending as a significant step toward a greener economy. Targeted investments, including £93 million for offshore wind skills and supply chains and £16 million for the Grangemouth Industrial Cluster, directly align with our call to secure high-value green supply chains. The new 10-year business rates relief for EV charging points will help crowd in private investment in critical infrastructure. We also urgently need to modernise a planning system that is lagging its competitors and a major handbrake on growth.

“Business needs an economy that tackles the problems of tax and regulatory divergence, fixes our infrastructure and provides the education and skills training that will make Scotland a compelling destination for global talent and investment. The government – and all the political parties seeking contesting May’s election – must work in partnership with business to drive forward policies to drive investment and sustainable growth in Scotland.”

Scottish Budget 2026-27 - gov.scot