David Whitehouse, Offshore Energies UK CEO: “Today we heard the Chancellor recognise the role of the oil and gas sector to support high quality jobs and strengthen the UK’s energy security. We welcome that and the meetings and dialogue which have taken place between industry and the new government.

“While the government will increase and extend the Energy profits levy on oil and gas production to a headline rate of 78% and remove the associated investment allowance, the 100% first-year allowance and the decarbonisation allowance will be retained. The Chancellor also confirmed that the EPL will fall away in March 2030.

“However, with an increase in tax despite commodity prices at recent lows, there is no hiding that this is a difficult day for the sector.

“Oil and gas companies, our world class supply chain and our highly skilled people will support the energy transition. We will not be successful without them.

“It’s why there is a different path for this industry which can deliver the energy future we all agree on. With industry and government working in partnership we can protect the North Sea as a national economic asset. It can and should serve as an engine to realise UK economic growth and climate goals.

“We welcome that the government will consult in early 2025 on how the oil and gas tax regime can encourage investment and respond to changes in the oil price. We also note the consultation on end use emissions for oil and gas projects.

“That’s why we are calling for a homegrown energy transition – making the most of our whole homegrown sector – from oil, gas, wind, hydrogen to carbon capture projects with fair and competitive stable policies that keep jobs, skills and capital in the UK.”

Scottish Financial Enterprise CEO Sandy Begbie: “The government fought and won the general election pledging that economic growth would be its number one mission. This positively pro-growth tone is to be welcomed, and a government with a large a majority and full term ahead of it has a real opportunity to make good on that pledge.

“Business intuitively understands the financial pressures facing the chancellor but unfortunately, there is precious little in this budget that will help deliver substantial economic growth.

“The increase in employer national insurance contributions is effectively a tax on jobs and will be a bitter pill to swallow for businesses, disproportionally hitting those employing workers on low wages. When combined with the recently announced employment bill, this represents a significant increase in cost to business.

“The decision to bring pension savings into the scope of inheritance tax is likely to impact confidence in the long-term savings industry. Where we should be encouraging people to save for the future, this may act as a disincentive and would appear to have a disproportionate impact on private sector workers.

“If businesses are going to shoulder the burden of fixing the public finances, they expect value from public services which can only come through serious reform and significantly improved productivity.

“With a significant uplift in Barnett consequentials coming to Holyrood, the Scottish government needs to focus on pro-growth measures. We understand the need to invest in public services, but that needs to be balanced with both public sector reform and policies that will stimulate economic growth.

“The UK government has the mandate and opportunity to re-engineer the economy to deliver efficient public services, improved productivity and the economic growth we need and, as Scotland’s largest industry, we stand ready to help deliver that.”

Abrdn Chief Economist Paul Diggle: “First, we got new fiscal rules. The ‘stability rule’ requires the current budget to be in balance (ie taxes fund day-to-day spending) within a three-year horizon, starting in 2029/30. That’s a stricter rule than the previous government used.

The ‘investment rule’ requires public debt as a share of GDP to be falling within three years, starting in 2029/30. Importantly, the definition of public debt is now ‘public sector net financial liabilities’, which takes account of some of the benefits of public investment as well as the costs. So it’s a more permissive rule than the previous government used.

“Second, we got higher than expected tax increases.

“There were more than £40bn of tax rises in this Budget, making it the biggest tax rising Budget in 30 years. UK tax take as a share of GDP is going to rise from 36.4% now to a historic high of 38.2% in 2029-30.

“The biggest tax measure (raising £25bn) was a 1.2% increase in employer national insurance contributions, to 15%, alongside the threshold for paying this tax falling from £9,000 to £5,000 of earnings. Alongside a higher minimum wage, this means business is carry the burden in this Budget – although the ultimate tax incidence is likely to be workers.

“There were also changes to capital gains tax and inheritance tax, among others.

“But fuel duty has been frozen again, while the “fiscal drag” that comes from freezing income tax thresholds is apparently ending in 2028/29. These are the closest things this Budget had to a “rabbit out of the hat” announcement.

“Third, day-to-day spending is increasing, by 1.5% in real terms.

“While that was enough for the Chancellor to declare “no return to austerity”, it’s a pretty small spending increase once protected departments like the NHS and defence are taken into account. Many UK public services will still feel squeezed.

“There were also some big one-off costs in this Budget to compensate the victims of the infected blood and Post Office-Horizon scandals.

“Fourth, investment spending is increasing significantly – by a cumulative £100bn over five years.

“This is being spent on things like capitalising the National Wealth Fund, R&D spending, homebuilding programmes, rail electrification upgrades, and aerospace, automative, and life science funding.

“The Chancellor hopes this  will improve the UK’s trend growth rate – although the Office for Budget Responsibility rather scathingly says that ‘taken together, Budget policies leave the level of output broadly unchanged at the forecast horizon’ even if it holds out the possibility that “in the longer term, the net effect of Budget policies would be positive for the economy-wide capital stock and potential output if the increase in public investment were to be sustained”.

“All told, this is a higher tax and higher spending Budget. The market reaction has been somewhat volatile, with gilts initially rally but now selling off as investors digest the borrowing increase to come. While the investment spending increases introduce upside risks around long-term UK growth, the burden is still on the government to deliver on its growth agenda while keeping markets onside.”

Nuno Teles, Managing Director, Diageo Great Britain: “On the campaign trail, Keir Starmer pledged to ‘back the Scotch whisky industry to the hilt’. Instead, the Government has broken this promise and slammed even more duty on spirits. This betrayal will leave a bitter taste for drinkers and pubs, while jeopardising jobs and investment across Scotland.”

Scotch Whisky Association CEO Mark Kent: “This duty increase on Scotch Whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink.

“On the back of the 10.1% duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose.

“It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.

“She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70% of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.

“The disastrous 10.1% duty hike last year has now been compounded. This further tax rise means the lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change.

“We urge all MPs who support Scotch Whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”

Abby Glennie, manager of the Abrdn UK Smaller Companies Fund: “The Government did not quite throw in the hand grenade for AIM entrepreneurs and investors that many expected – and valuations of AIM companies ticked up immediately after the announcement, supported by buying demand. However, inheritance tax (IHT) applied on AIM assets at 20% still makes investing in the market less attractive than previously.

“With tax benefits halved, investors will need to be more positive on return prospects to allocate cash to AIM and this could swing allocations towards other areas.

“UK smaller companies have been battered by a decade of difficulties – from the collapse of their natural investor base (UK pension funds) to increasing regulation – so now is the time to be looking at how we can support them, not pull the rug out from under them. AIM aligns with the rhetoric on investing in growth and innovation, and the tax cuts on IHT here go against supporting external capital investment in this area.

“Ultimately, it is not the companies who are the issue. The quality and growth dynamics remain strong, and very competitive versus listed smaller companies markets globally. The problems are external – and, with the right policy conditions in place, we could really see this area of the stock market thrive.”

João Sousa, Deputy Director of the Fraser of Allander Institute at the University of Strathclyde: “This was a big first Budget from Rachel Reeves, and a big rebalancing of Government priorities. Taxes were raised significantly – by an average of £35bn a year from April onwards – but spending has gone up by significantly more, at an average of £70bn. This means that borrowing is up by an average of over £30bn in every year of the forecast.

“In the short-term, the Chancellor has opted to borrow an extra £20 billion, allowing spending to rise in-year to combat the short-term pressures and public sector pay decisions she highlighted back in July. Over the longer run, capital spending in particular has been raised by a lot, and we’ll need to wait to see how much of it is delivered – governments being notorious for finding it difficult to disburse large step-changes smoothly.

“How does she make this add up? It’s all to do with the changing of the fiscal rules. If she’d maintained the underlying debt rule, she’d have broken it by £6bn. She also leaves less headroom against the current budget surplus than Jeremy Hunt had, and spent three-quarters of her newly found headroom in the debt measure. With such little room to maneuver, if many of the highly uncertain revenue raisers don’t bring in as much money as forecast, it’s not certain at all the Chancellor will meet these new rules.

“For Scotland, there has been a really significant uplift in spending – largely through the Barnett formula due to higher spending in devolved areas. Funding for day-to-day spending is £1.5bn higher this year, which is likely to make the Scottish Government’s job of balancing its budget significantly easier. Barnett consequentials are £3.4 billion next year as well, of which £2.6bn is day-to-day spending. But although that is a significant amount, several hundred million of that will be compensation for higher staff costs through the NICs measure for public sector employers – so even though it’s a significant amount, it’s a bit less than would initially appear.”

Scottish Government Finance Secretary Shona Robison: “We called for increased investment in public services, infrastructure and tackling poverty. This budget is a step in the right direction, but still leaves us facing enormous cost pressures going forwards. The additional funding for this financial year has already been factored into our spending plans.

“By changing her fiscal rules and increasing investment in infrastructure, the Chancellor has met a core ask of the Scottish Government. But after 14 years of austerity, it’s going to take more than one year to rebuild and recover – we will need to see continued investment over the coming years to reset and reform public services.

“Indeed, there is a risk that by providing more funding for public services while increasing employer national insurance contributions, the UK Government is giving with one hand while taking away with the other. We estimate that the employer national insurance change could add up to £500 million in costs for the public sector unless it is fully reimbursed – and there is a danger that we won’t get that certainty until after the Scottish budget process for 2025/26 has concluded.

“With the lingering effects of the cost of living crisis still hitting family finances, it is disappointing that there was no mention of abolishing the two-child limit, which evidence shows would be one of the most cost-effective ways to reduce child poverty. Neither was there mention of funding for the Winter Fuel Payment.

“As ever, the devil is in the detail, and we will now take the time to assess the full implications of today’s statement. I will be announcing further details as part of the Scottish Budget on 4 December.”

Richard Stone, Association of Investment Companies CEO: “The Chancellor clearly had a challenge to balance the books in today’s Budget with commitments to higher spending and government investment. There is a recognition that the government and public purse cannot drive growth alone. We believe the private sector, including individual savers and investors, should be encouraged to play a part too. The government’s commitment to the ISA scheme and limits for the next five years is welcome, as is the extension of the venture capital trust (VCT) scheme through to at least 2035.

“It’s disappointing to see higher capital gains tax for investors from a government which has put so much emphasis on investment and growth. Increased tax on profits from shares is a disincentive to invest in the stock market outside an ISA or pension. Bringing all AIM shares and pension funds into the scope of inheritance tax will act as a disincentive to build and retain those long-term investments for the benefit of future generations.

“Everybody can make capital gains on their stocks and shares up to the annual allowance of £3,000 before being liable for any capital gains tax. Investors should make full use of tax-efficient ways to invest – the pension allowance and ISA allowance. Investors may also want to consider VCTs which invest in small and high-growth UK companies.”

Matthew Amis, Investment Director, Abrdn: “Large but not reckless would be the best way to describe the Chancellor’s Budget increases, which spanned spending, taxation and borrowing. At Abrdn, we believe gilt prices can rise relative to peers, however they will struggle to fully unwind the ‘Budget premium’ built up over recent weeks – which saw UK government bond prices fall over fears of increased spending.

“Rachel Reeves has given the market some level of reassurance, with the tighter than expected stability rule and the increased tax haul. Even so, for her to balance the current budget in three years seems a hard task.

“Longer-term, the gilt market will struggle to look past the large increases in borrowing announced today. Investors will need to absorb an extra £142 billion of issuance over the next five years.  The extra long gilt issuance is catching the market off-guard.”

Susan Love, Strategic Engagement Lead, Scotland, global accountancy body ACCA: “Many of today’s announcements had been signalled well in advance, which helpfully avoided any unexpected shocks for businesses.

“Growth-enabling investment in economic opportunities, such as energy transition, as well as in public services, is welcome. Similarly, the commitment to long-term forecasting and planning, as well as the commitment to work with devolved governments to maximise opportunities is positive.

“However, the Chancellor should have gone further on simplifying our tax system, with the changes announced today arguably adding to existing complexity.

“Crucially, business confidence, critical to positive investment intentions, has been in short supply in recent months, and it remains to be seen whether businesses in Scotland are convinced that all the bad news is out of the way, not least with the Scottish Budget still to come.

“While some of the worst fears about today’s package of announcements might not have come to pass, nevertheless, it still places substantial pressure on SMEs, especially employers. Given the number of changes announced, it’ll be more important than ever for these businesses to seek the advice of their accountants; to ensure they comply with changes, as well as refocusing business growth plans.”

Alastair Black, Head of Savings Policy at Abrdn: “It seemed inevitable we would see some changes to IHT, and bringing pensions into the estate seemed a likely choice for government looking to increase revenue. But this will be very disappointing to some as they made financial decisions based on the previous rules, with no chance to reverse any of those decisions.

“This was a measure that a fifth of advice industry professionals we polled ahead of the Budget said were among the most disruptive things the Chancellor could do for client plans. There is a real risk that this stirs up some controversy if it’s seen as double taxation.

“Currently, most pensions are passed on after the age of 75, at which point those inheriting the pension need to pay income tax on the money they receive. Adding IHT on top of this could see the estate and the recipient paying tax twice between them on a proportion of the same pounds.

“It certainly adds new complexity to estate planning, and will increase demand for advisers’ help in developing more sophisticated strategies …

“Investing in the AIM market will still be attractive to investors, but this may impact current plans. There will now be an even greater need for consumers to engage with advice earlier. Those currently relying on previous levels of business relief to limit their IHT liabilities will need to review their plans for potentially higher IHT bills …

“Amid the changes to IHT was a missed opportunity to simplify the regime.

“The Office of Tax Simplification previously noted that while IHT can affect people only occasionally, it can do so in significant and surprising ways, at a sensitive time.

“These changes have certainly not improved this situation. There has never been more need for people to get advice …

“Today’s rise in employer NICs was widely expected.

“On the one hand, it is good news that they haven’t made significant changes to pensions directly on employees. This could have undermined confidence in long term savings altogether.

“While the smallest firms may not need to pay any NIC at all, larger firms will need to absorb these additional costs. For advisers, that only adds to the pressures already buffeting the sector.

“From an advice perspective, the main focus will probably be on helping small business owners understand the impact for them …

 “Today’s increase in CGT rates isn’t going to change the fact that people need to invest for their futures. But they might need to take a slightly different path to achieve their goals.

“While we need to see the fine details of how these changes will be implemented to understand immediate actions, the one clear action will be for advisers to ensure that they have all the right tools available to deliver good client outcomes.

“This may prompt many to re-look at the full range of tax wrappers and make more use of both Offshore Bonds and Onshore Bonds. Having all the tax wrappers at your disposal can provide significantly better client outcomes.”