Press & Policy

The Scottish Chambers of Commerce (SCC), representing thousands of businesses across every sector of Scotland’s economy, has warned that the Autumn Budget must be a turning point for growth, competitiveness, and confidence across the UK.

In a letter to the Chancellor, SCC says that firms are facing a perfect storm of rising costs, squeezed cashflow, and policy uncertainty. Its latest economic survey shows business confidence declining across most sectors, investment intentions put on hold, and hiring costs at record highs.

Dr Liz Cameron CBE, Director and Chief Executive of SCC, said:

“Firms across Scotland are ready to invest and grow, but a complex and costly policy environment is holding them back. We hear all too often that firms want to invest in their premises and people, but that the spiralling cost burden has seen investment intentions shelved. This Chancellor needs to make this Budget a turning point for businesses.

“The measures we’ve outlined will unlock investment, drive innovation, and create jobs in every region of the UK. Bold, evidence-led decisions today will secure growth and prosperity for decades to come.”

SCC is calling for a package of measures that strengthen the UK’s global competitiveness and support long-term productivity:

1. Create a Competitive Tax and Cost Environment
   Reverse the Employer National Insurance increase and introduce targeted VAT reductions for hospitality and tourism.
2. Stimulate Investment and Innovation
   Enhance capital allowances, support R&D for SMEs, and reinstate economic development funding.
3. Boost Scotland’s Global Competitiveness
   Reinstate VAT-free shopping for overseas visitors and freeze spirits duty for multiple years.
4. Secure Energy Investment and Transition
   Reform the Energy Profits Levy to a permanent, profit-based mechanism to unlock billions in investment and accelerate the low-carbon transition.
5. Prioritise Infrastructure and Skills for Growth
   Commit to long-term infrastructure funding and expand flexible skills programmes for emerging industries.

Concluding, Dr Cameron said:

“The message from Scotland’s business community is clear: we’re ready to invest, innovate, and create jobs. Now we need a Budget that matches our ambition, and takes the necessary steps to restore business confidence.

“With the Scottish Budget due in January, we urge both Governments to work together to deliver a settlement that unlocks the full potential of Scotland’s businesses.”

ENDS

NOTES TO EDITORS

Key statistics on SCC’s budget asks:

1. Reduce VAT for hospitality, leisure, and tourism:A targeted VAT reduction to 12.5% would deliver a powerful stimulus, generating additional sales of £7.7 billion over ten years across the UK, with Scotland gaining £550 million in turnover and nearly 22,000 new jobs. Crucially, this measure would also deliver a net fiscal gain of £4.6 billion to HM Treasury over a decade, as higher activity drives tax receipts.
2. VAT-free shopping:The removal of this incentive has placed the UK at a competitive disadvantage. Oxford Economics estimates that restoring tax-free shopping would generate a net GDP gain of £350 million annually, support over 70,000 jobs, and deliver near-neutral fiscal impact thanks to knock-on tax revenues.
3. Introduce a multi-year freeze on spirits duty:The Scotch whisky industry is a cornerstone of UK trade, accounting for 70% of all UK spirits production. Yet the sector faces the highest alcohol tax burden in the G7 and punitive tariffs in key markets. A multi-year freeze on spirits duty would provide stability and prevent further erosion of competitiveness, while securing zero-for-zero tariffs on spirits in ongoing trade negotiations with the United States would unlock growth and investment. The current 10% US tariff costs the industry £4 million per week in lost exports, and 1,000 jobs have already disappeared since the last Budget.
4. Reform the Energy Profits Levy:The current windfall tax regime, which brings the effective tax rate to 78%, is choking investment. Without reform, the sector could disappear within years, not decades. Replacing the Energy Profits Levy with a permanent, profit-based mechanism by 2026 would add £137 billion to the economy by 2050, secure £41 billion in extra investment, support 23,000 additional jobs by 2030, and deliver £12 billion in additional tax receipts. This is a win-win: maintaining fiscal fairness while giving investors the confidence to commit to long-term projects that underpin energy security and decarbonisation.​