![\"\"](\"https:\/\/i0.wp.com\/magazine.dailybusinessgroup.co.uk\/wp_mag14\/wp-content\/uploads\/2026\/10\/Sandy-Begbie-at-SFE-HQ.png?resize=354%2C252&ssl=1\")
<\/figure>\n<\/div>\nScotland\u2019s economy needs the right treatment, not another tax burden, writes SANDY BEGBIE<\/h4>\n
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In the financial and professional services sector, we understand that the challenges facing the public finances meant the Chancellor faced a tough task. But rather than try to tackle the big issues facing our economy \u2013 low growth, high public spending and a record tax burden \u2013 he prioritised short term political objectives over the UK\u2019s long term economic health. <\/p>\n
By treating the minor niggles rather than addressing the underlying problems affecting the economy, we risk allowing the patient\u2019s condition to deteriorate further.<\/p>\n
If the objective is to improve the health of the economy, placing additional burdens on one of its most productive sectors risks addressing the wrong problem while making the underlying condition worse \u2013 and we already have the one the highest taxed banking sectors in Europe.<\/p>\n
Economic growth requires the right diagnosis, a clear treatment plan and the confidence to pursue it consistently. While we welcome the commitment to cutting red tape, the banking levy announced in this Budget risks damaging an industry that is vital to the health of the wider economy.<\/p>\n
Financial services are not an isolated part of the economic system. They provide the capital, expertise and infrastructure that allow businesses to invest, expand and create jobs. Compromising their competitiveness risks weakening the very foundations on which sustainable growth depends.<\/p>\n
Financial and professional services in Scotland support 157,000 high-skilled, well-paid jobs and generate \u00a317.7 billion in gross value added. The sector is a heartbeat of the Scottish economy, supporting livelihoods, generating tax revenues and connecting Scottish businesses to domestic and international markets.<\/p>\n
Our industry has a vital role to play in driving investment, supporting businesses and creating opportunities for people across Scotland. It is therefore difficult to comprehend the logic behind introducing additional tax burdens at a time when both the UK and Scottish Governments have placed economic growth at the centre of their ambitions. <\/p>\n
The concern is not simply the immediate cost of a particular measure. It is the signal that policy decisions send to businesses and investors when they are deciding where to deploy capital, establish operations and create jobs. Competitiveness matters, and tax policy is an important part of that equation. Additional costs risk making the UK a less attractive destination for investment, potentially limiting the opportunities available to Scotland and its workforce.<\/p>\n
Nor should the importance of financial services be measured solely by the jobs and economic output generated directly by the sector. Its contribution extends across the economy, from providing finance to growing businesses to supporting household
savings, pensions and long-term financial security. <\/p>\n
A healthy financial services sector helps other parts of the economy thrive. Weakening it could have consequences far beyond the institutions directly affected. <\/p>\n
The economy needs a steady, predictable tax environment that encourages businesses to invest, innovate and create jobs. That does not mean avoiding difficult decisions or suggesting that the sector should be exempt from contributing to the public finances. It means ensuring that taxation is designed with a clear understanding of its wider economic consequences, and that decisions intended to raise revenue do not inadvertently undermine growth and future revenues.<\/p>\n
As we look ahead to the Scottish Budget in December, the Scottish Government has an opportunity to demonstrate that its commitment to growth translates into action. It means recognising the importance of a competitive tax environment and resisting
measures that add unnecessary friction to the process of doing business. For example, one positive from the budget was the chancellor highlighting the importance of proper data infrastructure and the Scottish government should follow his lead in expediting a framework for data centres in Scotland or we risk falling even further behind.<\/p>\n
Scotland does not lack the talent, expertise or ambition to compete internationally. What it needs is a policy environment that enables those strengths to be fully realised.<\/p>\n
The priority should be to treat the underlying condition: weak productivity, insufficient investment and the barriers that prevent businesses from growing. That requires a sustained focus on competitiveness, skills, innovation and enterprise, rather than
measures that risk constraining the sectors best placed to help deliver progress. <\/p>\n
If we want a healthier economy, we must stop treating the symptoms while ignoring the cause. The prescription should be clear: strengthen the conditions for growth, protect Scotland\u2019s ability to attract investment and allow the industries that power our economy to do what they do best.<\/p>\n
Sandy Begbie CBE is chief executive of Scottish Financial Enterprise<\/em><\/p>\n >Return to Daily Business news<\/p>\nLike this:<\/h3>\n