Industry Update: 2025-26 Programme for Government – Key Headlines for Tourism and Hospitality Businesses

First Minister’s Opening Statement

-The First Minister set out that part of the reason the Programme for Government (PfG) has been moved forward this year is “because of the scale of the looming economic challenge that we face.”

-He said: “New threats are emerging that have the potential to cause extensive damage to the Scottish economy.”

-Citing the impact of a US recession and global trade war, the FM said these “will have direct effects and indirect effects on almost every sector of our economy.”

-“For the sake of Scottish jobs, for the sake of protecting people’s quality of life, we are taking new steps, accelerating action, to ensure Scotland’s economy is better placed to ride the economic storms,” he said.

The FM set out three specific initiatives to designed to respond directly and specifically to the economic challenges faced:

1.Working with Scottish Development International across their 34 international offices, the Scottish Government will deliver a new 6-point Export Plan, to enable Scottish exporters to diversify and to grow markets.

2.To enable emerging Scottish companies to grow, a new Proof of Concept fund will be created, with a focus on supporting the commercialisation of research projects with significant economic potential.

3.The Scottish Government will deepen its commitment to a just transition and an industrial future for Scotland. Including a green industrial future for the Grangemouth site and the development of carbon capture in Scotland.

-He also committed to the enhancing of cost-of-living support, including more money in people’s pockets by scrapping peak rail fares from 1 September.

Tourism mentions

-In the PfG document, the Scottish Government restated its Scottish Budget commitment of “working with VisitScotland, airlines and travel partners to grow international connectivity – including extending seasonal routes and improving frequency and capacity.”

-Mention of commitment to transform Inverness Castle into a ‘Spirit of the Highlands’ themed attraction.

-As set out in last year’s PfG, it stated its support for Scottish Agritourism as they prepare for the World Agritourism Conference in Scotland in 2026.

Global Competitiveness

Taxation:

-No further divergence from the UK on Income Tax for the remainder of this Parliament.

-To commission an independent review on the valuation methodology applied to non-domestic property in the hospitality sector to report by the end of 2026 and consider any recommendations in advance of the 2029 revaluation cycle.

Regulatory burden:

-To scrutinise future Scottish Government regulation to ensure that its purpose, content and timing have regard to potential opportunities and impacts on business and investment.

-This will include supporting improved engagement with business, robust Business and Regulatory Impact Assessments, and good regulatory practice.

Exports:

-A new Six Point Export Plan, with a focus on actions to unlock target markets, and showcase Scotland to global buyers. This includes:

-Expanding Scottish Development International support to get companies to their target markets by scaling up ‘go-to-market’ advice and increasing overseas missions where companies can get a deep understanding of the opportunities and meet buyers.

-Increasing funding for the International Trade Partnership Programme with the Scottish Chambers of Commerce and expanding access to business membership organisations who can now bid for support for trade missions to established and emerging markets.

-Providing information, advice and support to exporters to the US to help them maintain market share or build new North American business and develop a US Export Plan to identify those US states which offer the best fit for Scottish export strengths.

Capital investment:

-To expand efforts to attract capital investment by launching ‘InvestScotland’, a new portal that will showcase investment opportunities and information for investors and provide a single point of entry to government.

-Consulting before the summer recess on how Co-ownership Authorised Contractual Schemes are used by those looking to invest in Scotland as well as the role of Land and Buildings Transaction Tax (LBTT) in supporting Scottish Government ambitions to encourage commercial investment in Scotland.

Innovation:

-To launch AI Scotland, a new national transformation programme founded on a partnership of business, academia, agencies and government, including a national AI adoption programme for SMEs.

-To launch the First Minister’s Start-up Challenge — a bold initiative to support young people from disadvantaged or under-represented backgrounds to start and scale innovative businesses, through tailored ideation support, mentorship and grant funding.

-Delivering a financial support and guidance scheme to support industry clusters to emerge, grow and remain internationally competitive.

Planning:

-To boost planning capacity and reduce barriers to delivery, including:

-Consulting on mechanisms to accelerate house building, including land assembly, build out rates and fiscal measures that stimulate access to land with planning permission where building has not started.

-To help improve the processes for communities to buy land and assets, launching a consultation on proposals from the review of community right to buy powers and deliver £7m through the Scottish Land Fund, enabling more community groups to purchase assets.

Transport

-Abolishing peak rail fares permanently from 1 September.

-Continuing to deliver the major vessels programme with MV Glen Rosa at the Ferguson Marine shipyard, MV Isle of Islay and three other vessels at the Cemre shipyard expected by summer 2026, and beginning work to deliver seven new electric ferries.

-Taking forward plans to directly award the next generation of the Clyde and Hebrides Ferry Services contract to CalMacFerries Ltd and make these services more resilient.

-Progressing business cases for infrastructure works at major ports including Port Ellen, Gasaigh and Ardrossan.

Environment

-A new rural and island EV infrastructure grant, supporting the Scottish Government’s commitment to approximately 24,000 additional public electric vehicle charge points by 2030.

-The Heat in Buildings Bill will be introduced in the legislative programme, setting targets for installing clean heating systems by 2045 – giving a clear signal to home and buildings owners to act when upgrading their heating system, including provisions to support development of heat networks.

Food and drink

-To invest an additional £5m in Scotland’s food and drink strategy, to drive growth, and £5m to support food processing and marketing.

-To lay the draft Good Food Nation Plan before Parliament by the summer and establishing the Scottish Food Commission.

Affordable housing

-A commitment to deliver more than 8,000 affordable homes, including for social and mid-market rent, and removing barriers on stalled building sites with the potential to deliver up to 20,000 new homes.

Immigration

-To deliver Scotland’s Migration Service and making the continued case for tailored migration routes, including a Scottish Visa, Rural Visa Pilot and Scottish Graduate Visa.

Skills and Workforce

-Subject to legislative processes, delivering a simplified post-school funding body landscape that is sustainable and efficient, consolidating apprenticeship funding within the Scottish Funding Council by March 2027, and student support funding within the Student Awards Agency Scotland by March 2026.

-Introducing a new Scottish Government-led approach to national skills planning, and strengthen regional skills planning, to ensure that post school provision becomes more responsive to Scotland’s strategic skills needs and priorities.

-Establishing a national Recognition of Prior Learning system – formally acknowledging an individual’s skills and knowledge gained through work experience, training, or other learning outside of formal education.

Note: The full Programme for Government can be viewed here.