How SNP just proved they’re all talk and no action on economic growth

The SNP have promised an ‘Action and Implementation Plan’ on business regulations but not made any firm commitments

Last week’s Programme for Government from the SNP was a real opportunity to put economic growth back at the heart of the political debate. For years, in coalition with the anti-growth Greens, it was a subject the SNP did not even want to mention. They now are at least prepared to talk about it, although there is a significant mismatch between the rhetoric and the actual delivery.

We should all agree that growth is important. It delivers the ability to solve the nation’s problems – it creates wealth, it reduces poverty, it supports household incomes, and it provides the tax revenues to fund public services.

But our growth has been too slow, both across the UK and in Scotland. For the latest month we have figures for, February 2025, Scotland’s onshore gross domestic product is estimated to have fallen 0.2 per cent. Overall, the UK economy grew in February by 0.5 per cent.

READ MORE: Can Scottish Government really deliver for business?​​​​​​​

John Swinney failed to prioritise growing Scotland's economy in his recent Programme for Government (Picture: Jane Barlow/pool) | Getty Images

Business confidence collapsing

Eleven out of 14 sectors of Scotland’s economy fell in output, with the services sector shrinking overall by 0.6 per cent. We have too many people of working age not in employment, with a higher percentage of the economically inactive compared to the UK as a whole.

This poor economic output is reflected in collapsing levels of business confidence. Just last month, the Scottish Chambers of Commerce published its quarterly economic indicator, in conjunction with the Fraser of Allander Institute. This shows business confidence evaporating across key sectors, with sharp drops recorded for tourism, manufacturing and construction, compared to the same period last year.

Taxation is now the number one concern for Scottish businesses, overtaking inflation, and rising labour and energy costs continue to be major factors. At the beginning of last month, we saw the increase in employers’ National Insurance, a literal tax on jobs introduced by the UK Labour government. It is not surprising that growth forecasts for the UK economy have been substantially downgraded since Labour came to power.

READ MORE: The 15 key policies in John Swinney's Programme for Government: ScotRail alcohol ban, independence, NHS

The SNP government cannot be exempted from criticism. Personal taxation is under their control, as are business rates, and the reality is that they have not chosen to pass on the Barnett consequentials from reductions in rates for retail, hospitality and leisure south of the Border for the past three years.

There are also significant issues around skills and apprenticeships, where businesses continually complain that they do not get the support in funding for which their equivalents in England are eligible, despite many paying substantial sums in the apprenticeship levy.

Missed opportunity

The tourist sector is one which struggles with business rates, National Insurance increases, the regulation of short-term lets, and now the introduction of the visitor levy. VisitScotland tells us that while international tourist numbers are doing well, the domestic market is not so strong, putting pressure on an industry where costs have risen substantially.

Rather than respond to the concerns of business and choose to reduce the flow of regulation and cut the tax burden, the SNP in office have gone in the opposite direction. That is not the way to grow the economy.

So last week’s Programme for Government was an opportunity for a change of direction. It could have set out plans to reduce the tax differential between Scotland and the rest of the United Kingdom, given all the concerns we hear from industry about the difficulty this presents in attracting skilled and talented individuals to come here.

It could have redressed the business rates imbalance, and it could have dealt with the over-regulation of sectors such as tourism.

One measure which was delivered, intended to grab the headlines, was the scrapping of inflated peak-time rail fares, a welcome move for commuters but one which comes just a few months after SNP MSPs actually voted against such a measure when it was brought to the parliament by the Scottish Conservatives.

Warm words

Beyond that, there was precious little other than warm words when it came to policies to help growth. There is a promise to publish an “Action and Implementation Plan based on an assessment of the regulatory controls which exist in key growth sectors”. A nice ambition, but no firm commitment to actually take any action.

Similarly, there is a promise to subject “future Scottish Government regulation to scrutiny to ensure that its purpose, content and timing have regard to potential opportunities and impact on business and investment”. Once again, a vague promise with no commitment to actually do anything.

We did hear the First Minister talk about the need to promote international trade, but the SNP have been curiously silent about last week’s announcement of a free trade agreement between India and the UK, one which the Scotch Whisky Association described as a “once-in-a-generation deal”.

While there will undoubtedly be concerns about some of the detail of what is proposed, overall such a deal has substantial potential benefits for the Scottish economy, opening up India, potentially the world’s largest whisky market, with significant reductions in tariffs, and the potential to increase Scotch whisky exports by £1 billion over five years, and create 1,200 jobs across the UK, principally in Scotland.

Perhaps because this is an agreement – like the tariff reduction one with the US a few days later – that could only be delivered as a consequence of Brexit and the freedom we have as a country to do our own trade deals outwith the EU, Swinney could not bring himself to welcome it.

It was clear what the Scottish Government can and should have been doing to help promote growth. Address the over-taxation of Scottish business. Address excessive regulation. Provide the support for skills and apprenticeships which businesses want to see. Make sure the infrastructure is there with our roads, rail and ferry network to support the economy.

But this Programme for Government won’t deliver growth. And we will all end up poorer as a result.

Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife