Election
Manifesto

The answer should not be controversial. While government plays a vital role in setting the framework, it is businesses — large and small, new and old, domestic and international — that create wealth, innovate, invest and grow the economy. When business flourishes, so too does the tax base on which our schools, hospitals and public services rely.

And yet, in recent years, that basic understanding has begun to erode. There is an increasingly prevalent belief, across both devolved and reserved government, that the state itself can act as the primary engine of economic growth. That belief is well-intentioned, but it is ultimately mistaken. Unless addressed, it risks holding Scotland back at precisely the moment we need to move forward.

To understand how we arrived here, we must return to the extraordinary circumstances of the COVID-19 pandemic.

During that crisis, governments were forced to take an unprecedented interest in every corner of society and the economy. Public intervention was not only justified but essential. From furlough schemes and emergency lending to business support grants and regulatory forbearance, the state stepped in at scale to protect livelihoods, preserve productive capacity and stabilise the economy.

But crises have consequences, and the UK is still nursing a COVID-induced hangover — a tendency for governments to continue acting as if emergency conditions still apply, with an outsized role in economic decision-making and an inflated sense of their capacity to drive growth directly.

This has manifested itself in many ways: policy instability, an over-reliance on regulation as a substitute for strategy, tax changes that prioritise short-term revenue over long-term competitiveness, and an assumption that government can design, direct and deliver growth from the centre.

That assumption is wrong.

Governments do not develop new technologies, open new markets or take commercial risk. Businesses do. Crucially, business and industry are far better placed than government to understand where opportunity lies, how innovation happens, and what is required to scale activity in a competitive global environment.

This is not an argument for a retreat from public purpose. It is an argument for a smarter, more disciplined and more confident relationship between government and business. One in which the roles of each are clearly understood and properly aligned.

The forthcoming Scottish parliament election provides a rare and timely opportunity to reset that relationship.

Whatever the composition of the next administration, it should focus on creating the right conditions for growth; through a consistent narrative, well-run public services, good quality infrastructure and a stable and competitive tax environment – and otherwise avoid interfering in businesses and workers driving the growth our economy needs.

This manifesto aims to help the next Scottish government deliver on this shared ambition.

It is not prescriptive, and it does not claim that there is a single model for growth. To do so would be to fall into the very trap governments so often have in recent years.

Instead, it offers a set of practical, indicative ideas for how the next Scottish Government can resist further encroachment into areas best left to the private sector and instead focus relentlessly on enabling growth.

That means placing economic expansion at the centre of decision-making, recognising that difficult trade-offs are unavoidable, and embedding a long-term perspective that transcends electoral cycles. It means using the tax system as a strategic tool, not a political one, and developing policy that makes Scotland competitive in the UK and international environments in which businesses actually operate.

It also means recognising the scale of the transformation now under way.

We are on the brink of an AI-driven economic shift that will reshape industries, labour markets and productivity in ways we are only beginning to understand. At the same time, businesses are operating in an increasingly unstable geopolitical environment, marked by supply-chain disruption, energy insecurity and strategic competition between major powers.

In such circumstances, uncertainty is not a theoretical concern but a direct deterrent to investment, hiring and innovation. Governments that add friction, delay or unpredictability do not insulate their economies from risk — they amplify it.

Scotland has extraordinary strengths to draw upon. Our financial and professional services sector is a national asset, employing hundreds of thousands of people, exporting expertise across the world, and supporting growth in every part of the economy. As Scotland’s Global Investment Summit demonstrated, there is huge interest from international investors in our key sectors of financial and professional services, life sciences and energy. Our universities, entrepreneurs and investors give us genuine advantages in areas such as fintech, AI, asset management, pensions, data and emerging technologies.

But strengths alone are not enough. Without the right policy environment, opportunity always goes elsewhere.

This manifesto therefore focuses deliberately on devolved levers – skills and education, planning, infrastructure, taxation and regulation — where the Scottish government can make a tangible difference. At the same time, we are clear-eyed that this cultural drift is not confined to Scotland. There are lessons here, too, for the UK Government, which has often fallen into the same trap of over-centralisation and short-termism.

Equally, this is not a one-way conversation.

Industry must continue to play its part. Financial and professional services have a responsibility not only to drive growth but to ensure it is inclusive, sustainable and widely understood. That includes doing more to improve financial literacy, particularly among young people, and working constructively with government to ensure the benefits of growth are shared across communities and regions.

Scottish Financial Enterprise and its members are committed to that partnership. But effective partnership requires not only will but clarity. It requires an acceptance that government and business have different, complementary roles, and that confusing the two weakens both.

This election offers a moment of choice.

Scotland can continue down a path where ambition is constrained by control, and economic growth is treated as something government can command rather than enable. Or it can choose a different course. A course that trusts enterprise, takes risks, rewards investment, and allows Scotland to become not merely a participant in the UK economy, but its engine room.

The ideas set out in this manifesto are offered in that spirit.

The next administration, whatever its political composition, must seize this opportunity to reset the relationship between government and business. The prize — higher wages, skilled jobs, stronger public finances and a more resilient economy — is too important to ignore.