SCC Response to the Draft Scottish Budget

16th December 2016

We will be paying particular attention to business rates, Income Tax, APD, use of Apprenticeship Levy revenues and capital spending.

Today’s Draft Scottish Budget marks a beginning of a radically evolving significance of economic decisions made by our Scottish Parliament. The scale of taxes at the disposal of Scotland’s politicians now means that growing Scotland’s economy must be the key tool towards ensuring that the revenues are available to invest in Scotland’s public services. The Scottish Chambers of Commerce network will judge the success of the proposed budget through its capacity to increase Scotland’s rate of economic growth beyond its current low levels.

Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

On Business Rates:

“We very much welcome the Scottish Government’s decision to match the basic business rates poundage to that south of the border, resulting in an overall decrease in rates revenues. We also welcome the expansion of 100% relief to businesses with a rateable value of up to £15,000. However, despite increasing the threshold of the Large Business Supplement to £51,000, the fact remains that this surcharge continues to make Scotland the highest taxed nation in the UK in terms of business rates and this damages our competitiveness.”

On Income Tax:

“Creating a differential between tax bandings north and south of the border will set a dangerous precedent. Ultimately, growing our economy rather than increasing taxes will provide the most sustainable route towards boosting tax revenues and thus public sector spending. If Scottish businesses are taxed more and Scottish based staff are taxed more, then that would not seem to be a situation designed to attract investment and grow Scotland’s economy.”

On Enterprise Budgets:

“The significant reduction in the enterprise budget means that it will be crucially important that the second phase of the Scottish Government’s Enterprise and Skills Review successfully identifies precisely where interventions will make the biggest impact in terms of the return on investment.”

On the Apprenticeship Levy:

“Whilst the detail of the Scottish Government’s plans for Apprenticeship Levy funding is still to be announced, it seems strange that at a time when Scotland’s employers are paying a new tax to help fund skills provision, funding for skills and training is actually forecast to fall by over £7 million next year. Clearly the devil will be in the detail and we await the Skills Minister’s formal plans with great interest.”

On Infrastructure Spending:

“We are pleased that key infrastructure budgets such as roads and digital infrastructure are set to rise substantially over the coming year. It is essential that Scotland is 100% connected to superfast fixed line and mobile communications and that our major road bottlenecks, such as the A9 Berriedale Braes in Caithness and the A77 Maybole Bypass in Ayrshire, are addressed with urgency.”

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