CBI responds to Scotland's GERS figures for 2025-26

Michelle Ferguson OBE, Director, CBI Scotland, said:

“The narrowing of Scotland’s fiscal deficit in the latest GERS figures will be welcomed by firms and households, but the widening gap with the UK remains a concern.

“At 10.9% of GDP, Scotland’s deficit is now 6.7 percentage points higher than the UK-wide figure of 4.2%, underlining the need to strengthen Scotland’s underlying long-term economic and fiscal position.

“Sustainable public finances are essential to delivering high-quality public services, which in turn support a successful economy, but Scotland cannot rely on higher taxation to meet rising spending pressures. With much of the growth in income tax revenues driven by fiscal drag and wage growth, maintaining a competitive tax environment is vital to Scotland’s ability to attract and retain the talent, businesses and investment needed to grow the economy.

“The most sustainable route to stronger public finances is stronger economic growth. Getting more people into good jobs, raising productivity and creating the conditions for businesses to invest and expand will broaden the tax base. This will help reduce the widening fiscal gap between Scotland and the UK.

“It is imperative that the Scottish and UK governments work together, in partnership with business. The instability in the Middle East is leaving the economy exposed to renewed volatility in energy markets and wider economic uncertainty. For Scottish firms, that means accelerating planning decisions, strengthening the skills pipeline, and delivering meaningful reform of non-domestic rates. Greater certainty and predictability across these areas will give firms more confidence to invest, expand and create jobs.

“The Chancellor’s first UK Budget in October will be a crucial moment. Efforts to tackle the cost-of-living challenge need to go hand in hand with addressing the cost of doing business, prioritising growth-enhancing investment. The CBI will continue taking the priorities of Scottish business directly to both governments with growth, competitiveness and investment at the heart of the conversation.”