Scottish business leaders have warned against a national brain drain, greater pressure on consumers and deeper labour challenges in the wake of the Scottish budget.

While a basic freeze on business rates was widely welcomed, a move to raise income tax was criticised.

Marc Crothall, of the Scottish Tourism Alliance, said: “The tax increase announced this afternoon further reduces consumer ability to support our already struggling sector; spending on leisure will continue to drop.

“There has been little respite for our industry and no meaningful fiscal support to date to enable an economic bounce back for tourism and hospitality businesses across Scotland.

“The situation is grim; we have now entered our most difficult winter yet.”

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said there was little cheer in the budget.

“The Scottish Government’s move to increase the top and higher rates of income tax will hit taxpayers in Scotland more than other parts of the UK," she said.

“This is a clear disadvantage for Scotland’s businesses and workers and could position Scotland as a less attractive place to live and work.”

While standard and basic rates of tax will not change, the higher rate threshold will be maintained and the top rate will be lowered to £125,140 from £150,000. The higher and top rates of tax will be increased by 1p each, to 42p and 47p respectively.

READ MORE: John Swinney's tax and spending plans in detail

David Lonsdale, director of the Scottish Retail Consortium, said: “Consumer spending is the mainstay of Scotland’s economy. The freezing of income tax thresholds and increased income tax rates for higher earners is likely to impact consumer spending at a time when retail sales are set to remain sluggish.”

“Higher income tax rates could well affect the ability of retailers’ and other firms to attract and retain talent.”

Pointing to the impact of the Scottish budget on Scotland’s tech entrepreneur community, David Ovens, joint managing director of Archangels, said: “We understand the rationale behind increasing the tax burden on higher earners in Scotland. However, the practical implications require more consideration. By creating such a large differential between Scotland and the rest of the UK, we run the risk of a brain drain.”

Colin Wilkinson, Scottish Licensed Trade Association managing director, also pointed out the difference in rateable value between two hotels – one in West Lothian and one in Surrey.

“The rateable value of the hotel in Surrey has gone from £370,000 to £210,750 while the West Lothian hotel’s RV has gone from £367,000 to £350,000,” he said.

“Even with a freeze on the Scottish UBR (top tier), the Scottish one will pay over £75,000 more (70%) than the English one in rates in 2023/24 when they were paying virtually the same this year. How can that be fair?”

Company behind Scottish outdoor festival enters liquidation

The company behind Scottish music festival Doune the Rabbit Hole has entered liquidation. 

Doune The Rabbit Hole Festival Ltd, the company that ran the 2022 event at Cardross Estate in Stirlingshire, said it has entered liquidation after suffering “huge financial difficulty”.

​The Herald:

Student accommodation plans approved for Edinburgh's Canongate

PLANS for a purpose-built student accommodation development in the heart of Edinburgh’s Old Town have been approved, following a successful appeal by developers.

Summix (CGE) Developments and S Harrison have been granted permission for the partial demolition of existing buildings and the delivery of PBSA on a site that was once part of the 19th century gasworks at 179A Canongate.