SFE Chief Executive, Sandy Begbie comments on the UK Budget

Following today’s UK Budget, we have raised concerns about the Chancellor’s approach to economic growth, particularly the decision to increase taxes on the banking sector. While there are some welcome measures, questions remain over the wider impact of the Budget on investment, business confidence and long-term growth.

Our Chief Executive, Sandy Begbie, said:

 “For businesses in Scotland and across the UK, most budget measures can be broken down into those that help drive economic growth, and those that do not. Given economic growth is the government’s central mission, the chancellor did disappointingly little to apply that lens to this budget, and avoided tackling the long term government addiction to high public spending.

“Cancelling the planned cut to the cash ISA limit is a positive move for savers and the framework for data centres is a welcome recognition of the need for a strategic approach that the Scottish government would do well to look closely at.

“Elsewhere, raising levies on the banking sector is politically expedient, but the truth is increasing taxes on a sector that plays such a key role in driving growth is symptomatic of a desire to prioritise short term popularity over long term economic priorities. It sends the wrong message to investors and risks giving the impression that when a business or sector becomes too successful, it automatically becomes a target for the treasury. While the time limitation on the increase is a welcome ambition, governments tend to find it harder to wean themselves off such revenue streams once they are introduced and the government should set out a clear path to equalising bank tax to that of other businesses.

“As the Scottish government approaches its own budget in the coming weeks, it is now more essential than ever that it resists the temptation to go down a similar path.”