CBI Scotland has said there is ‘no time to waste’ to build long-term sustainable growth in Scotland following the record levels of devolved funding coming from Westminster.

Coming ahead of next month’s Scottish Budget, the CBI called this a ‘pivotal moment’ for the Scottish Government, and an opportune time to put Scottish business on the map if both Holyrood and Westminster take part in effective collaboration with industry.

The CBI’s annual Scottish Budget submission sets out how both governments can give business the certainty it claims is needed to accelerate investment and supercharge growth.

The trade body wants the Scottish Government to promote a more competitive business environment by ensuring that new tax strategies prioritise long-term economic growth over short-term revenue raising measures, along with a commitment to avoid income tax divergence from the rest of the UK.

It also wants the government to commission an independent review evaluating the impact of income tax divergence on Scotland, as well as a longer-term review of the non-domestic rates system, and a freeze in the business rates multiplier for 2025-26 to support businesses facing rising cost pressures.

Other recommendations from the CBI’s Budget submission include an expansion of technology adoption support packages, such as Digital Boost, to help SMEs bring in productivity boosting technologies, and a new strategy aimed at retrofitting and repurposing existing infrastructure across Scotland.

The CBI also wants the Scottish Government to set out how plans around the Green Industrial Strategy will be funded and realised, including the construction of electricity transmission infrastructure and the streamlining of grid connections which the trade body argues are essential for both the economy and energy security.

“If the Scottish Government is serious about growth, it must get to grips with the sluggish investment that has plagued the economy in recent decades and tackle Scotland’s underperforming business investment which, as a share of GDP, lags the rest of the UK’s,” said Mags Simpson, interim director for CBI Scotland.

“The Budget, and accompanying tax strategy, must focus on addressing uncompetitive tax policies that are acting as a handbrake on growth. The Scottish Government should commit to meeting these challenges head-on by prioritising long-term economic growth over short-term revenue raising measures.”

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In September, the new Labour Government delivered its largest funding increase to Scotland since devolution, amounting to £47.7 billion over 2025/26. This includes an extra £3.4 billion allocated through the Barnett formula and £1.5 billion specifically designated for daily operational expenses.

The Scottish Budget, set to be delivered on December 4th, will be the first opportunity since then for the Scottish Government to set out exactly how it intends to use this increase in funding to stimulate economic growth. 

However, the Scottish Government has warned for months that the country is facing a difficult financial situation, and even in recent days Scottish first minister, John Swinney, and finance secretary, Shona Robison, have claimed the UK Budget will cost the SNP administration an extra £500 million in tax increases, eating into the roughly £3.4 billion in extra block grant funding from Westminster.