7 hours Ago By David Bol
John Swinney has been told to vow to build 25,000 new homes and "seize the opportunity” to kickstart economic growth in Scotland. The First Minister has brought forward his annual programme for government to next month in a move giving SNP ministers a full year to implement legislative proposals ahead of next year’s crunch Holyrood election. Ahead of the programme for government being published on May 6, CBI Scotland has called on Mr Swinney to ensure closing the skills gap and investing in infrastructure are key themes in his plans - as well as ending tax divergence with Westminster.
In a letter to Mr Swinney, CBI Scotland has argued that a coordinated national skills strategy and action plan with clear targets and bringing together business, education, and government is needed to future-proof the workforce. Read more: John Swinney to kickstart SNP election push as he brings forward government policy plans The business group has warned that skills funding from the Scottish Government needs to be more closely aligned with industry skills and training needs. Alongside the focus on addressing the skills gap, CBI Scotland’s submission puts forward a bold, ambitious suite of policies for kickstarting growth with a focus on Scotland’s green growth potential - appealing to Mr Swinney to take concrete steps to improve infrastructure and connectivity and building a competitive business environment to unlock investment.
CBI Scotland has called on Mr Swinney to “announce a target to deliver 25,000 new high-quality, energy efficient homes across all tenures per year”, with the potential pledge coming after 19,797 new homes were built in 2024, an annual decrease of 7 per cent. The group has also called for SNP ministers to expedite the construction of electricity transmission infrastructure and streamline the grid connection process” as well as “publish the route map and fast-track funding to accelerate electric vehicle charging infrastructure expansion in line with 2030 targets”. Read more: Why John Swinney's big gamble on NHS record could define whether SNP keep hold of power Mr Swinney’s government has been urged to “publish a strategy for retrofitting and repurposing existing infrastructure across Scotland” and to “ringfence funding to enhance critical road routes and set out a strategy to reduce travel time to key economic hubs in Scotland and the rest of the UK”.
CBI Scotland has also appealed to SNP minister to “commit to avoiding further income tax divergence from the rest of the UK” and “commission an independent review evaluating the extent to which income tax divergence has impacted Scottish competitiveness”. Michelle Ferguson, director of CBI Scotland, said: “The First Minister must seize the opportunity in this accelerated programme to outline how the government plans to play its part in tackling the skills shortages that are holding back growth. “We need to enable businesses to access and develop skilled workers who are ready to meet the challenges and opportunities ahead.
Achieving a better balance between classroom and work-based training and short, sharp provision to help upskill and reskill workers for the clean energy transition would support these ambitious goals. “The government should also be working closely with businesses and the further and higher education sectors, which are the jewel in the crown of Scotland and its capabilities, to build opportunities to equip people with digital proficiency and the skills to match advances in technology as we build Scotland’s workforce of the future. Read more: Inside Anas Sarwar's strategy to 'change the conversation' from UK Labour to rescue Scottish election bid “Removing barriers to electricity infrastructure, publishing the Climate Change Plan, building thousands of new homes and reviewing tax divergence between Scotland and the rest of the UK will attract more highly skilled staff to Scotland, shoring up public finances and boosting productivity and growth.
” A Scottish Government spokesperson said: “The Programme for Government will continue to focus on the First Minister’s priorities of eradicating child poverty, growing the economy, improving public services such as our NHS and tackling the climate crisis. “A major reform of the skills system to ensure it meets Scotland’s needs is already underway.” It comes as new forecasts today show UK economic growth could slow sharply over the next two years as US tariffs weigh heavy on spending and investment, and uncertainty washes over households and businesses.
Recovery from a period of stagnant growth will be directly hampered by US President Donald Trump’s plans, EY Item Club said in a new report. Mr Trump unveiled sweeping changes to US trade policy, introducing a “baseline” 10 per cent tariff on imports from most countries around the world. About 16 per cent of UK goods exports go to the US, meaning the new tariff rate will directly impact UK growth by squashing demand for products, EY said.
But the bigger hit is set to come from the indirect impact of new policy on a weaker global economic backdrop and spiralling levels of uncertainty. This is predicted to weigh on consumers who remain in a “cautious mood” following the cost-of-living crisis, and will likely continue putting big spending decisions on hold. Businesses are also expected to limit the amount they are investing over the next two years as a result.
EY said it was therefore now expecting UK gross domestic product (GDP) to grow by 0.8 per cent this year, down from the 1 per cent growth projected in February. It also slashed its GDP forecast for 2026 from 1.
6 per cent to 0.9 per cent as the longer-term effects filter through to the economy. Economic growth will then rebound to reach 1.
5 per cent in 2027, according to the projections. The UK is less exposed than other countries but certain sectors such as car manufacturing and pharmaceuticals are particularly “vulnerable”, according to EY’s report. This is because they trade heavily with the US or, like carmakers, are facing a higher tariff rate on exports.
At the same time, EY said the Bank of England is likely to stick to its gradual approach to cutting interest rates, which are predicted to be reduced to 3.75% by the end of the year, from the current 4.5 per cent level.
Anna Anthony, regional managing partner for EY UK & Ireland, said: “There had been signs that the economy was exceeding expectations in the opening months of 2025, but a combination of global trade disruption, uncertainty, and persistent inflation look likely to postpone the UK’s return to more moderate levels of growth. “Businesses thrive on certainty, so it’s unsurprising that an unpredictable global market is translating into lower levels of business investment over the short term. “While conditions remain challenging, there are still some grounds for optimism.
“The services-led UK economy is projected to see continued growth this year and gradual interest rate cuts should slowly bolster business and household spending. “Over time, the unpredictable global landscape may offer opportunities for the UK to position itself as a stable, attractive destination for investment.”.
