Low confidence in the Scottish economy and its tax system is holding back investment and job creation, according to a new report.
A pre-election survey by the Institute of Chartered Accountants of Scotland found that about 80% of respondents were unhappy at the state of the economy or current tax policies.
In its report, ICAS lays bear the challenges facing the incoming government and demands more focus on skill, tax and financial literacy.
“Scotland has higher economic inactivity than the rest of the UK,” it says. “Its education system is under pressure, with international rankings moving in the wrong direction over the last 15 years.
“Economic growth is stagnant, with little improvement expected next year. On top of this, global instability is creating new doubts about Scotland’s future economic strength and security.”
The survey found that:
- 78% said they do not have confidence in the health of Scotland’s economy, with just 6% expressing confidence
- 83% disagreed that Scotland’s current tax system benefits the economy, with only 6% believing it does
The report, Chartered Accountants: A strategic asset for Scotland, published a week ahead of the Scottish elections argues that improving financial capability across the population, from primary school onwards, is vital to building a more robust, productive and inclusive economy.
It says: “Scotland needs a long-term fiscal strategy, that sets out a multi-year roadmap for Scottish tax and fiscal policy – this will give greater transparency and certainty about how tax revenues can effectively deliver quality public services and encourage sustainable growth.
It also wants “simplification of the tax system, including a review of LBTT, some of the newer devolved taxes and the divergence in personal income tax bands.”
ICAS calls for financial literacy to be embedded at the heart of Scotland’s education system as part of a wider programme of reforms to support economic growth, strengthen public finances and build long-term resilience.
The organisation is also calling for closer collaboration between government, professional bodies, businesses and educators to drive long-term systemic reform, instead of short-term policy shifts.
Gail Boag, ICAS CEO, said: “The next five years are critical for Scotland’s future. The incoming government will face a set of serious challenges, from high economic inactivity and weak growth to pressure on education outcomes, skills shortages and increasing global uncertainty.
“Only long-term, ambitious policies will deliver the investment and sustainable growth Scotland needs.
“Financial literacy must be a core building block of Scotland’s economic success. Embedding it across the education system will boost resilience, improve decision making and fuel a more productive, inclusive economy. Without action, Scotland risks limiting its own economic potential and growth.
“Scotland can only grow its economy and tax base by creating the conditions people and businesses need to succeed.
“That means predictable and stable policies, a tax system developed in partnership with business, backed by real improvements in vital public services such as education, health, childcare, transport and housing.
“Alongside this, we need a strong pipeline of skilled professionals, decisive action on climate change and a clear focus on energy security. These priorities cannot wait, and they are essential if Scotland is to compete, innovate and prosper in the years ahead.”
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