What will a Swinney government mean for business in Scotland? - Andrew Henderson

The new First Minister has indicated the economy will be a high priority, but actions speak louder than words, says Andrew Henderson

As with any change in national leader, businesses are striving to divine what a John Swinney-led Scottish Government may mean for their strategic and operational interests.

Following a period of politics which might charitably be described as “turbulent”, business leaders may be hoping for some respite from policy uncertainty, a keener focus on economic growth, and perhaps a cooling of the performative tit-for-tat between parties on issues of national importance.

Whether such hopes will be fulfilled will depend on the substance and character of the government which the new First Minister leads, and on the willingness of opposition parties to play ball.

First Minister John Swinney with his newly-appointed cabinet on the steps of Bute House (Picture: Jane Barlow/PA Wire)

Much water has flowed under the bridge since Swinney first led the SNP. Now one of a dwindling number of MSPs who remain in parliament from the original “class of 1999”, when he initially took charge of the SNP in 2000, his ascent marked the first change of any party leader in the devolution era.

Fast forward to 2024, and no fewer than 21 leaders of major parties – from across the political spectrum – have come and gone since Swinney commenced his first spell at the helm.

Gone too – or at least in the deep freeze – is the ideal of consensus, which the Scottish Parliament’s horseshoe debating chamber was famously designed to engender. And shifted significantly is Scotland’s political centre-ground, which now sits considerably to the left of the Blair-era liberal consensus in which devolution was forged.

Early indications point to a Swinney leadership which will prioritise business and the economy more highly than recent predecessors, but if the talk of creating a “competitive edge” for business is to be walked, then action on cumulative regulatory burden, tax reform and meaningful infrastructure investment, will be expected.

Andrew Henderson, Director of Public Policy at Pinsent Masons (Picture: Wullie Marr/Deadline News)

While the demise of the Bute House Agreement may afford the new First Minister a little more policy wriggle room than his predecessor, he inherits precisely the same parliamentary arithmetic which bedevilled the death throes of Humza Yousaf’s premiership last month.

Of course, in working constructively with opposition parties, as he now must, this is not Swinney’s first rodeo. When Finance Minister he previously steered through nine Scottish budgets, four of which from a minority position.

But it is important to note that Swinney’s budgets of the late 2000s were passed by opposition votes (most notably those of Scottish Conservatives) and abstentions. Times have changed such that, now constitutional polarisation overrides political pragmatism, a repeat of such deal-making looks all but impossible.

This leaves Swinney facing back towards his former Bute House Agreement partners. And from the bruised Scottish Greens will likely come firm demands to continue down the road of many of the thorny policies which have posed significant challenges to former First Ministers, and in some instances to Scottish business.

That said, though the new First Minister may prove beholden to Green votes to pass two budgets between now and the next Holyrood elections, opportunities will doubtless present themselves for him to secure votes on a policy-by-policy basis from other quarters. This indicates that we may be entering again into a period of political horse-trading, which will require business to engage meaningfully across the political spectrum.

Andrew Henderson, Director of Public Policy at Pinsent Masons