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SCDI welcomes support for business in today’s UK mini budget but is concerned about the rising public debt burden

Responding to an initial reading of today’s mini budget, Sara Thiam, SCDI CEO said:

“Achieving sustainable economic growth for Scotland is SCDI’s core mission. We welcome the major steps taken by the Chancellor in his mini budget to address some of the significant challenges faced by businesses in Scotland today.

The scrapping of the planned rise in corporation tax in the Spring of next year will provide reassurance to businesses and the reversal of the rise in National Insurance Contributions in November will offset some of their costs more immediately enabling them to focus on rebuilding balance sheets, raising wages and investing for the future. The Energy Bill Relief plan announced earlier this week will also provide a brief reprieve from concerns about how they will pay their energy bills over the winter. We also welcome the freeze on duty on spirits which will benefit drinks producers in Scotland, including the whisky sector, and the cut in VAT for international shoppers which will give Scotland’s retailers a much-needed boost.

We remain concerned about the lack of a clear understanding about how these cuts will be paid for and, assuming they will be funded by borrowing, are concerned about the affordability of our rising debt.

Our members tell us that a stable business and trading environment is what they value most. We encourage the government to bring forward further details of how businesses may be supported to meet their energy costs beyond the spring. We also look forward to further details of the Retained EU Law Bill but urge the government to proceed with caution to ensure that measures taken do not disadvantage our valuable export industries reliant on stability and alignment with EU regulation.

We look forward to further details of the spending commitments and how they may support any further enhancement to current budgeted spend in Scotland. As many of the proposed income tax changes don’t apply to Scotland, we await the Scottish Government’s response and invite them to be mindful of the growing divergence in Scotland from UK income tax rates and of the increasing burden of ‘fiscal drag’ from freezing some tax thresholds.”

23 September 2022