Exclusive:Scottish business chiefs urge Chancellor to be 'bold' and cut taxes
John Healey will announce his Budget in the Commons on Wednesday
Business chiefs in Scotland have urged the Chancellor to be "bold" and cut taxes for struggling firms in the upcoming Budget.
In a letter to John Healey, the Scottish Chambers of Commerce called for measures that will “unlock private investment and growth”.
It said it was “clear-eyed” about the challenges ahead but argued a “stronger private sector” would help sustain public finances.
The Scottish Conservatives urged Mr Healey to listen to the body “instead of blindly piling more costs onto employers”.
The Chancellor will publish his Budget on Wednesday amid a tight fiscal backdrop and limited room for manoeuvre.
Charandeep Singh, the chief executive of the Scottish Chambers of Commerce, offered a 10-point plan to help Scotland’s economy “reach its full potential”.
In his letter to Mr Healey, he said four in 10 Scottish businesses reported falling confidence in the second quarter of 2026, while 75 per cent continue to feel pressure from labour costs and 57 per cent are concerned by taxation.
“We are clear-eyed on the pressure the fiscal backdrop poses to your decisions this autumn, but would encourage you to be bold,” he said. “Measures that unlock private investment and growth will, in turn, strengthen the tax base that supports those finances.”
Mr Singh said the government must show “urgency” in approving the controversial Rosebank oil field north-west of Shetland, and argued the windfall tax on oil and gas companies should be scrapped now and replaced “with a stable, proportionate and predictable fiscal regime”.
Elsewhere, he called for a reduction in employer National Insurance contributions and for alcohol duty on spirits to be cut in order to boost the whisky sector.
“We would urge you to cut spirits duty and provide a more stable long-term alcohol duty framework, giving producers greater confidence to invest and compete internationally,” he said.
He also urged the Chancellor to cut VAT for tourism and hospitality firms.
“Interest in Scotland as a tourist destination is heightened currently following exposure this summer during the likes of the World Cup and the Commonwealth Games in Glasgow, however many operators in these sectors are struggling to take advantage of this opportunity,” Mr Singh said.
“A targeted VAT reduction would support demand, improve competitiveness and create greater space for investment.”
Meanwhile, he said the UK and Scottish governments should work together to “explore and pilot a tailored tax incentive for young people entering sectors experiencing acute skills shortages after completing education or training in Scotland”.
He added: “Doing so would give young people greater breathing room to build a career and get a foot on the property ladder, while helping ensure that skills nurtured in Scotland’s world-leading colleges and universities remain here and contribute to our economy.”
Mr Singh said the UK government should also increase driving-test capacity and reduce waiting times.
“Pressure on household incomes, housing costs and access to transport all make it harder for young people to take their first step into work,” he told Mr Healey.
“Government should focus on the practical barriers and giving more young people a credible route into employment, training and careers with prospects for progression.
“For many young people, especially in rural and less well-connected communities, transport is one of those barriers.
“We welcome initiatives that support youth mobility, including free bus travel, but this must be matched by action to improve access to a driving licence.
“Recent figures show learners in Forfar, Callander and Arbroath facing waits of around six to seven months for a practical driving test.”
Mr Singh called for regions to be given a greater influence over economic decisions which affect them.
He also urged the government to “move at pace” over the planned expansion of Heathrow Airport.
“Chancellor, businesses understand the difficult choices facing government,” he wrote.
“But fiscal stability and economic growth cannot be treated as competing objectives. A stronger private sector – investing more, employing more people and selling more to the world – is ultimately what will generate the revenues required to sustain our public finances.
“Scotland has the businesses, skills and assets to make a greater contribution to that growth. Your first Budget is an opportunity to give them the confidence and tools to do so. We urge you to take it.”
Scottish Conservative finance and social security spokesman Craig Hoy said: “Labour cannot claim to be the party of growth while clobbering the businesses that create jobs and wealth.
“The Scottish Chambers of Commerce are right to demand action, and John Healey must listen instead of blindly piling more costs onto employers.
“Approving Rosebank and scrapping the energy profits levy would send a clear signal that Britain is open for business and serious about protecting skilled jobs.
“Scottish businesses need a government that backs them to succeed, not one that taxes them into decline.”
It came as the Chancellor set out plans to cut back on “form-filling and pointless paperwork” in a bid to slash some £800 million worth of red tape for businesses.
Mr Healey has said he wants to ease cost pressures on both companies and households.
“British firms are fed up with form-filling and pointless paperwork that eats into valuable time and money when they simply want to get on with running their businesses,” he said.
“That is why we are cutting unnecessary bureaucracy and giving businesses the breathing space they need to invest, innovate and create good jobs.”
UK government borrowing rose by more than expected to £24.5 billion for last month, underscoring the constraints in the public finances ahead of the Budget.
This month, National Debt topped £3 trillion for the first time in the official figures, while the headline rate of inflation hit 3.5%.
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