Economic growth cannot just be a political slogan - this Budget was a missed opportunity

Indeed, by targeting two of Scotland’s most important industries – financial services and energy – through punitive taxation and withdrawn investment, the government risks actively undermining the growth it claims to prioritise.

Take financial services. The sector supports 157,000 Scottish jobs, generates billions in economic value and provides the capital that enables businesses across every other industry to invest, innovate and expand.

Increasing taxes on banks might be politically expedient, particularly when the public finances are under pressure, but good economic policy should be guided by long-term priorities, not short-term popularity.

The danger is that the government sends a message that success makes an industry an automatic target for the Treasury. That is hardly an attractive proposition for businesses considering where to invest, particularly as the industry wrestles with both the opportunities and threats wrought by major advances in AI.

Banks already make a substantial contribution to the public finances. While the time limitation on the increase is a welcome ambition, governments tend to find it harder to wean themselves off such revenue streams once they are introduced. Meanwhile, the decision to withdraw funding from the Acorn carbon capture and storage project represents a body blow to Scotland’s energy industry.

Only last year, the UK Government committed £200 million towards its development. With the project expected to contribute £18 billion to UK economic output and support more than 15,000 jobs, withdrawing that support raises serious questions about the government’s commitment to a just energy transition.

The priority now must be to turbocharge investment across the rest of Scotland’s energy sector. That means unlocking Scotland’s enormous offshore wind potential through a more competitive transmission charging regime and a favourable outcome in the Strategic Spatial Energy Plan. Crucially, it also means approving new North Sea oil and gas developments, including Rosebank, to protect skilled jobs, strengthen energy security and generate revenues that can help finance the transition to cleaner energy.

In either of Scotland’s leading industries, there is a wider point here about investor confidence.

Last year, Scottish Financial Enterprise convened Scotland’s first Global Investment Summit, bringing international investors together to showcase the enormous opportunities available across our economy.

One message was abundantly clear: alongside world-class talent and attractive investment opportunities, international investors need consistency, predictability and stability from government. Increasing taxes on one of Scotland’s most successful industries while withdrawing previously promised funding from another offers precisely the opposite.

Next January, investors will gather in Edinburgh for Scotland’s Global Scale-Up Investment Summit, with attention once again on Scotland’s attractiveness for attracting investment to our high growth businesses.

Capital is internationally mobile, and Scotland is competing against countries around the world for investment. We cannot afford to make ourselves a less attractive place to do business. In the coming weeks, the Scottish government will publish its own budget. While many economic levers remain reserved to Westminster, Holyrood has significant powers to support enterprise, attract investment and encourage growth.

With the UK Government having made that task considerably harder, it is now more vital than ever that Scotland’s ministers resist the temptation to follow suit.

Economic growth cannot just be a political slogan – it must be the test against which every decision is judged.

Sandy Begbie CBE FRSE, chief executive, Scottish Financial Enterprise (SFE)