Pragmatism, not politics, must drive the Scottish Budget as boom times gone

Nearly half report worsening personal finances and widespread concerns about the economy’s trajectory. As we look towards the Scottish Budget, Finance Secretary Shona Robison must take a pragmatic approach to the implications.

With 48 per cent of Scots feeling worse off than a year ago and 75 per cent perceiving the economy as favouring the wealthy, consumer confidence is clearly waning.

For businesses reliant on discretionary spending, this spells trouble. Consumers have told us they will be tighten their belts further, prioritising essentials over luxury goods or non-essential services.

Key influencers like Martin Lewis are also urging people not to get into debt at Christmas, so retailers, hospitality providers and other consumer-facing industries are unlikely to see boom times return anytime soon.

The tracker also reveals profound implications for workplace dynamics. A third of Scots report mental health struggles linked to financial worries, and 16 per cent cite physical health impacts. Businesses cannot ignore the ripple effects this has on productivity, absenteeism, and overall workplace morale.

Employers must step up, offering tangible support to employees. This could mean financial education programs, access to mental health resources, or even introducing financial well-being benefits such as salary advance schemes.

Flexibility in working arrangements, especially as colder months increase heating costs at home, may also help employees manage their budgets. Compassionate leadership that prioritises the well-being of staff will pay dividends in employee loyalty and retention.

Amid the gloom, the relative optimism of younger Scots stands out, with 25 per cent of 16 to 34-year-olds expecting their finances to improve - could this be to do with the upcoming rise in living wage and the new employment legislation coming at Westminster?

However, this hope is in sharp contrast to the overwhelming pessimism of older generations, who feel less confident about the future.

While healthcare remains a top priority for many Scots, the cost of living continues to loom large. A third of people now see inflation and the rising cost of living as the nation’s second most pressing issue after health, and the importance of tackling poverty and inequality is third highlighted by one in five respondents.

The upcoming Scottish Budget must signal a commitment to creating a more stable economic environment and financially resilient Scots.

Currently one in three households with children are not confident they could meet an emergency expense of £100 without borrowing and six in ten are not confident they could meet an emergency expense of £500, highlighting the economic fragility of many households.

With so many households struggling to makes ends meet, action must be taken to change the paradigm and rebuild confidence.

The Finance Secretary cannot afford to ignore this strain on the nation. Pragmatism, not politics, must drive the Budget, which will need cross-party consensus to pass at Holyrood.

It is no time for political points scoring, so all political leaders must work together to provide Scots with the hope they so desperately need. Let’s hope Shona Robison can prove she’s a canny Scot that can rise to the challenge.

- Susan Murray is the director of independent research centre, the David Hume Institute