Why Scottish Budget delights offshore wind sector but leaves housebuilders wanting more

Maggie McGinlay, chief executive of ETZ, a private sector-led venture which is supported by funding from both the Scottish and UK governments, said: “The decision to locate a new offshore wind hub in Aberdeen is hugely welcome and a positive step toward the north east of Scotland positioning itself as an internationally recognised renewables energy cluster, particularly for offshore wind. We will work closely with the Scottish Government to ensure this hub and the additional £150m earmarked for offshore wind in the coming year are channelled effectively.

“The importance of speeding up the planning and consenting of offshore wind projects, so they are commercially available, is vital if Scotland is to emerge as global leaders in this sector. Therefore, it makes perfect sense to locate this new body in a region that has proximity to the vast majority of offshore wind projects in Scotland and is home to the highest concentration of energy supply chain companies in the UK,” she added.

Meanwhile, retail industry chiefs said Scottish ministers deserved praise for ditching proposals for a business rate surtax that would have hit grocery retailers north of the Border. Some £3m in funding to help tackle crime against retailers, including record levels of shoplifting, was also welcomed.

David Lonsdale, director of industry body the Scottish Retail Consortium, said the Scottish Government had “seen the light and turned away from the damaging and retrograde idea of introducing a business rate surtax on grocery retailers”.

He added: “This ill-considered measure would have unfairly penalised food and drink shops who already pay very significant amounts in rates and who face a business rate already at a 25-year high. These retailers are being clobbered by the UK government’s colossal increase in employer national insurance contributions which disproportionately impacts the retail industry, which has seen sales flatline for much of the year.

“Removing this surtax lifts a damaging cloud from the investment horizon and allows grocers to more favourably assess Scotland as a nation with investment potential.”

On the measures to tackle crime against retailers, Lonsdale noted: “Retail crime has become a scourge of communities across Scotland and we know that soaring levels of shoplifting is the main factor behind abuse and threats towards shop workers. The vital funding promised by the Finance Secretary is positive and must be used effectively to tackle persistent offenders and organised crime.”

CBI Scotland said that following a “tough” UK Budget for business, that saw Chancellor Rachel Reeves hitting firms with a hike in employers’ national insurance contributions, companies looking to the Scottish Government to provide some festive cheer would be left “feeling a little cold”.

Tracy Black, the CBI’s chief strategy officer and devolved nations ambassador, said: “With fiscal headroom in famously short supply, this was always likely to be a Scottish Budget focused on shoring up the public sector and helping households most in need. Any small hope for an injection of capital to catalyse enterprise was dashed, even as firms battle a range of costly challenges.

“The income tax divergence between Scotland and the rest of the UK remains a significant disadvantage for local firms and their ability to compete for highly skilled staff,” she added.

Sandy Begbie, chief executive of Scottish Financial Enterprise, which represents a sector that contributes more than £14.3bn to the Scottish economy and directly employs tens of thousands of people, said: “Measures to boost capital investment are to be welcomed as a means of unlocking and attracting investment, but these now need to be delivered at pace to deliver a measurable impact for our economy. Our sector stands ready to work with the government to achieve these ambitions.”

The property sector gave a mixed reaction to the proposals outlined by Robison in her Budget statement.

Behnam Afshar, a director at housebuilder AMA Homes, described the reintroduction of funding to Scotland’s affordable housing scheme as a “promising step forward” but said the Government had not offered much else in the way of housing for Scotland.

“I am expecting to see greater market confidence in general in Scotland than in England,” he added. “As a devolved nation, we rely less on the workings of Westminster politics to stimulate our housing market, and I am confident we will see more home movers in Scotland in 2025.

“While England has seen a change to both the stamp duty rates for first-time buyers and second homeowners, we are reassured here in Scotland that the LBTT rates and first-time buyer relief will stay the same until 2026. This provides some stability for those considering a purchase in 2025 and should add a confidence boost to the Scottish market.”

Jim Baxter, financial director at Allanwater Homes, said: “While I welcome the reversal in cuts to Scotland’s affordable housing budget, I believe the Government could have done more to support housebuilders in Scotland. The Budget could have been used to address other key challenges in the housing sector, including rising costs and supply chain disruptions.”

Robison announced that there would be no change in this parliament to income tax rates, nor would any more bands be introduced. The amount at which the basic and intermediate rates - 20 per cent and 21 per cent - is paid will increase by 3.5 per cent in the next financial year, which the Finance Secretary has said will see more paying the lower 19 per cent rate due to increasing wages.

Neil Winstanley, Edinburgh-based chartered financial planner at Quilter Cheviot, said: “This move, alongside a commitment to no new bands or rate increases for the remainder of the parliament, offers a degree of certainty for taxpayers at a time of economic turbulence. However, it also highlights Scotland’s increasingly distinct tax regime, where higher earners continue to shoulder a disproportionately greater burden compared to the rest of the UK.”

The Budget also made a commitment to invest £321m in Scotland’s enterprise agencies, supporting emerging technologies, including AI and robotics.

Stewart Miller, chief executive of the National Robotarium, based at Heriot-Watt University, said: “This significant investment from the Scottish Government to support emerging tech represents a critical step in securing Scotland's position at the forefront of the global robotics revolution. With the UK currently lagging behind other G7 nations in robotics adoption, this investment sends a powerful signal about Scotland’s ambition to lead rather than follow in the next wave of technological innovation.”