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That is an excellent question that allows me to set the scene for this budget of choices. It is a tough budget, which makes our choices even more critical. I will respond in detail on the things that you think that I perhaps should or should not have done, although that is the nature of choices, but the choices that we have made are very much to continue to invest in the things that we know will deliver productivity improvements.

Let us start with Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise and the Scottish National Investment Bank. Funding is safeguarded for those precisely because of the brilliant performance that we have seen from them in creating jobs, attracting investment and delivering growth in their respective areas. In other words, we know that their approach works. Every cabinet secretary in my shoes would have to make budget choices about whether to do new or fancy headline-grabbing things off to the side in order to make a splash or to double down on the things that they know work. That is point number one.

Point number two is about international trade and investment. Over the past few days, that has been a particular feature of our discussions. Exports and international trade are critical to our businesses. There is £15.3 million to support international trade and investment.

The other two areas that I want to talk about relate to entrepreneurship. We have the Techscaler programme, which works well, and we are investing in innovation. In this budget, we have taken a step forward in response to Ana Stewart’s asks and Shane Corstorphine’s report around scale-up. Both of them say, “Okay, Scotland—international comparisons say that you are doing much better with start-ups. You are actually performing pretty well with start-ups and outperforming some of your comparator nations. That is all well and good until the start-ups have nowhere to go because there is no investment in scale-up.”

The third area that I want to point to is investment in scale-up and building on start-ups. We know, and the data proves, that the impact of new, emerging, fast-growth businesses on productivity is enormous. They have some of the biggest impacts on productivity gains.

The last thing that I want to talk about is what is happening across Government. I point to the programme of public service reform, which my colleague Ivan McKee leads on but which also requires investment in digital. There is significant investment in digital through my portfolio. That goes into Scotland’s digital infrastructure and supports the programme of public service reform—basically, it is trying to make the public sector more productive, as well as supporting infrastructure across the private sector.

Those are some examples of where the budget is built around the things that work and that are most likely to deliver productivity improvements.

With regard to where the thinking has come from, there is great material in the work by Shane Corstorphine that was published just before Christmas. It sets out how Scotland has performed in general when it comes to small businesses, and it identifies pillars that we should invest in to enable such businesses to grow. He is fairly open on sector and age of business.

You said that we should support small Scottish businesses that may have been around for a long time, as opposed to ones that are new and emerging. Shane Corstorphine talks about talent and the ability to attract it, capability and resilience, governance issues and internationalisation, all of which, I would say, are the hallmarks of a business that will last. It is a question not of measuring businesses on the basis of performance and how quickly they are growing but of considering what we need to invest in to make them resilient.

That work sits alongside the work that Ana Stewart has been doing. You will know the background of her involvement in the “Pathways” report, which is all about getting people from underrepresented backgrounds into entrepreneurship. The pathways fund has been running in the south of Scotland for a couple of years. The recipients of that fund are all brilliant people who are heavily embedded in their communities.

When it comes to scale-ups, we have identified some funding in the entrepreneurship and innovation funding line, and we will work with Ana Stewart to invest in the areas in which she thinks that investment is most required to build on the high performance that we have seen in support for start-ups and to carry that over to scale-ups.

We have seen a huge breadth in the businesses that have applied to the Techscaler programme or for pathways funding. The young woman I met a couple of weeks ago, who has applied for and received pathways funding, works in the textiles industry, so what she is doing is not very techie, but it is a brilliant business in a local community.

They are performing well and I love the fact that, in the premise of his question, Murdo Fraser has put on the record that he agrees that they are performing well.

I said quite openly to Lorna Slater that it has been a difficult budget and, in a difficult budget, we have to choose what to back. The impact of Scottish Enterprise and the other enterprise agencies is in what they can invest in sectors, industries and businesses. That is why we have protected their capital.

I accept that resourcing is challenging across the entirety of Government and the public sector. For a very long time, business organisations—perhaps not this committee—have wanted to see greater efficiency in the public sector. I am proud that the enterprise agencies, particularly VisitScotland and Scottish Enterprise, have led the way in that regard, and the latter is in the process of understanding how its structure can be made fit for the future.

The resource budget is probably born of three things: we have made big progress on the financial flexibilities that Scottish Enterprise was keen to see; the budget settlement, because we cannot create resource that does not exist, and every part of the public sector grapples with that; and the shape of those enterprise agencies, which needs to be as nimble and efficient as possible, and I will continue to double down on that. Businesses that have come through the past few years want to see the economic arms of the public sector acting as efficiently as they have had to in light of rising costs.

The figures that are published in the budget that relate to the agency’s 2024-25 outturn, its 2025-26 autumn budget revision position and its 2026-27 budget allocation are not comparable. Scottish Enterprise’s opening budget position for 2025-26 can be compared with the opening budget position for 2026-27, which shows that it will receive an increase of £1 million. That includes an increase in resource of 1.2 per cent. I am more than happy to share those figures further, but, by comparison, the capital increase is 8 per cent.

Absolutely, but it is important to see how those budgets have shifted. You cannot just disregard what has happened in the intervening period. The point is that there has been an increase from the opening budget last year.

It may be to do with the combination of capital and financial transactions, potentially. I do not know. I would need to rapidly get my calculator out.

My reason for answering the question in the way that I did is that, rather than getting into a tussle about numbers, the principle of my opening answer to Murdo Fraser’s question still stands. It is about what we are seeking to do. I am proud of what we are seeking to do when it comes to the shape of those agencies.

I think that you do. My point is that VisitScotland’s brilliant work is largely in attracting people to visit the country. We literally have a Commonwealth games through which people will visit the country, and we also have people inclined to watch football while spending money on food and beverage in accommodation and hospitality venues. My point is that VisitScotland does brilliant work, and I do not want to take away from that, but we also have the potential for a real bonanza this year through other people doing our work for us—through, for example, the Commonwealth games.

VisitScotland has a key role in enhancing connectivity and bringing new investment to Scotland because it is a high-performing agency, but I have a budget in front of me. I have to make it go as far as possible and, in doing so, must understand where I need to invest in order to increase performance. VisitScotland will do another outstanding job this year, but hopefully with a bit of help from other sources.

I accept that that is challenging for many businesses. There is a challenge every few years for businesses that see an increase in their valuation because of the work that is done by independent assessors. If I think back to the previous tone date, and to where the economy was then, I can see that we are in a very different place now and that it makes sense to see such a significant variation, but I know that that does not make it any easier.

You are right to say that reliefs have been introduced in the budget. There is a 15 per cent relief for retail, hospitality and leisure and a 100 per cent relief for island businesses. The cabinet secretary made another point that I took a lot of comfort from, which is that, if there are additional consequentials from what the Chancellor of the Exchequer does for pubs, the Scottish Government will reinvest that in further reliefs. That is to be welcomed.

Murdo Fraser can remind me of his position, but I have heard a lot of people calling for the revaluation to be suspended or stopped. I took some views on that from business organisations and found quite a degree of hostility in many quarters. Some sectors of the economy are relieved with their valuations and will see an improved picture with their bills. We know that simply delaying a revaluation, even if you assume an inflationary increase in all the rates, would have led to a significant loss of revenue because businesses would not be paying. We also know, from engaging with some sectors, that they have more to gain. With any revaluation, some will win and others will face challenges.

And we had not even prepared that.

No, it is fine. I was just wondering where it was coming from.

Sarah, there is a lot in your question. You started with how we are spending ScotWind money. Last year was a really big year. We have committed £500 million over five years to invest in developing the supply chain that is required for offshore wind—the argument being that in previous renewables revolutions, we have not done as well to derisk the supply chain investments that are required up front—so that when those projects get over the line, they have a supply chain to draw from and to place contracts with.

With that £500 million we have made very substantial investments. Last year, we invested £150 million, which was funded from capital that is raised through ScotWind—it is a great example of recycling.

Secondly, I reject the suggestion that it is a missed opportunity, and I reject it because focusing only on revenues that were directly raised from the leasing misses the big opportunity with ScotWind, which is the commitment that every single successful bidder made to invest in the supply chain and in the economy. I know that a pound that comes back to Government is not half as valuable as a pound that is directly invested in the supply chain.

I know you want to come back in, but I will just add another point. At the time—in 2021 and 2022—all of those successful bidders committed to about £1 billion of investment in the supply chain per gigawatt. I hear my colleagues talk about £1.5 billion, so that figure has obviously increased since then. That was done in the light of the suggestion that deployment of ScotWind projects would be costly—which turned out to be true—coupled with our desire to see an investment in the economy.

Thirdly, you asked about whether it would be more valuable if those companies invested in the supply chain and in jobs. We have pushed our powers as far as possible in compelling an investment in the local supply chain. There are limits to what we can require around local content. A lot of the issues have been well covered in and around the Alexander Dennis situation and other situations. We have used a number of different mechanisms to compel as far as we can investment in local content. There are questions around penalties and what we cannot do around penalties, but that is an issue that could be resolved between the UK Government and ourselves.

Lastly, you were talking about fair work, and in what we did with green freeports we have led the way on that. After Labour came into power, other freeports have now followed suit in replicating what had already been implemented in respect of fair work in the green freeports in Scotland.