Budget 2026 Scottish case study: ‘Just another collection of tweaks’

There are plenty of tweaks, some sensible, some contradictory, but little that convinces me the UK ship has changed course.

For entrepreneurs, there is good news. The new founders’ relief gives qualifying founders of high-growth innovative businesses a 10 per cent capital gains tax rate on up to £10 million of lifetime gains. R&D tax relief administration is being simplified, employee share incentives improved and the British Business Bank given greater capacity to back growing companies.

This is good. Britain should reward people prepared to risk their money, careers and reputations building businesses and creating jobs. But then comes the contradiction.

The government is tripling the trading allowance from £1,000 to £3,000 while cutting the lifetime limit for business asset disposal relief from £1 million to £500,000. We encourage entrepreneurship on the way in, then increase the tax exposure for many owners on the way out.

Housing follows the same pattern. The £4.7 billion Your First Home scheme aims to help around 70,000 households in England. Helping young people onto the property ladder is welcome. But helping people buy homes is no substitute for building enough of them.

And that sums up this Budget. Some good ideas, but nowhere near the scale of change Britain needs.

The government says departmental day-to-day spending will be £40bn higher each year by 2028-29 than under the previous government’s plans, while departmental administration budgets are supposed to fall by 20 per cent in real terms by 2029-30. The latter is welcome. But why isn’t the ambition much greater?

Business understands this. Microsoft is offering voluntary exit packages to around 60,000 employees while investing heavily in AI. Successful organisations continually reshape themselves as technology changes.

Government cannot demand greater productivity from businesses while ducking that challenge itself.

Britain’s problem isn’t that we tax too little. Government costs too much and our economy grows too slowly.

Britain needed a Budget prepared to change course. Instead, we got another collection of tweaks.

Peter Proud is CEO and founder of Forrit, a Scottish technology company based in Edinburgh with 55 staff. He is also visiting professor at the University of Strathclyde and fellow of the Royal Society of Edinburgh.