The last few weeks have seen a number of announcements and publications that will be seen as a mixed bag of news for businesses.

The Chancellor presented the Autumn Statement on November 22, and one of the most high-profile (and expensive) measures was the decision to make “full expensing” permanent. This tax break, which allows businesses to offset their corporation tax bill by investing in plant and machinery, was widely welcomed by business representative organisations.

While this is an expensive measure, it is likely that it will be less expensive over time as capital deepening occurs in the economy. The estimates of the amount of additional business investment that is likely to be generated as a result of this measure are also pretty uncertain, and it is clear that many business organisations believe that the boost will be bigger than has been assumed.

Another welcome announcement for retail, hospitality, and leisure businesses in England was the continuation of 75% business rates relief for another year. For these businesses in Scotland though, it was a reminder that the Scottish Government chose not to replicate this English measure in 2023-24. These businesses are likely to be looking to the Deputy First Minister on December 19 when she presents the Scottish Budget to see if she will choose differently for 2024-25.

Some brighter news for the Scottish economy came in the form of the Scottish GDP data which were published last Wednesday. The monthly GDP figures for September showed that the Scottish economy grew by 0.1% in September, and by 0.4% over the quarter as a whole. This means that Scotland has avoided a technical recession following a contraction in Q2.

Compared to the UK, which had flat (or rather, no) growth in Q3, Scottish growth looks rather buoyant. However, it’s important to understand what is driving this – the poor performance in July in the UK was driven by public sector strikes, rather than a real difference in economic performance.

If we take a longer look, the Scottish economy is now 2% above pre-pandemic levels, compared to 2.3% for the UK – so at the whole economy level, the recovery speed is fairly similar. However, this whole economy figure masks significant sectoral differences.

Manufacturing in Scotland, while still below pre-pandemic levels of output, has recovered more than these industries in the UK as a whole. A particular strength is the food and beverage manufacturing sector, of which we have a large proportion in Scotland – buoyed of course by our whisky industry.

Construction is also a highlight for Scotland, with the industry being 13% above pre-pandemic levels compared to 5% in the UK.

It is services where Scotland looks considerably weaker, and overall there is double the growth in the UK compared to Scotland. Wholesale and retail, financial services and the public sector industries of health and education have grown much more quickly in the UK.

We are able to examine these differences for Scotland due to the much better data that exists for this part of the UK compared to any other. It is likely though that these sectoral variations are manifesting themselves in many other parts of the country.

This week there was another announcement which is likely to get a troubled response from businesses and business organisations, which are the new plans to change the immigration rules. This both raises the cap that a worker must be earning to qualify for a skilled worker visa to £38,700, and, even for those professions not subject to that because they are shortage occupations, clamp down on people bringing dependents with them.

Many were expecting the change on dependents, particularly for international students, but it is likely to have an impact, particularly on the social care sector.

The new salary cap was more of a surprise – that is, it was a surprise that is was quite so high. In Scotland, looking at gross pay, you will have to be in the top 30% of earners to be attracting that salary. This new cap will exclude (according to median salaries) skilled metal, electronic and construction workers, science, engineering and technology associate professionals and business and public service professionals.

While some employers in London may find it easier to meet the salary caps due to London weighting, many key occupational groupings across the rest of the country are going to struggle to recruit from abroad.

In the face of roughly a million vacancies across the UK, many employers will now be wondering where they can get their skilled labour from. While everyone is likely to support and would welcome workers from the UK, measures to ensure the workforce is well and supported into work are likely to (i) take time and (ii) have fairly marginal impacts on overall labour supply.

Mairi Spowage is director of the Fraser of Allander Institute of the University of Strathclyde