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Given your background, you will understand the fact that supply-chain price inflation has an impact on our spending power and our ability to deliver with the budget that we have available to us. However, we are working with our suppliers and doing what we can to ensure that that is mitigated as far as possible. It will not always be possible; in some cases, we will have to spend more in order to get less. That is the nature of inflation. Again, as part of the response that I give to the committee regarding the progress of R100, I will set out more in answer to your inquiry.

That comes from our national strategy for economic transformation, which sets out our long-term economic aspirations. The green industrial strategy is coming up, and the innovation strategy was published last year. There are various plans and strategies that we have available to us.

I assume that you, like Murdo Fraser, continue to support UK Government spending plans, and you must understand that those plans have an impact, which would have been greater if we had not taken the tax decisions that we took, on our ability to spend in those areas. We are allocating our resource as best we can to ensure that we maximise the economic opportunities before us, but UK spending decisions have an impact. In reality, they have a direct consequence for us, and that has meant that there have been some difficult spending decisions. However, if we had replicated UK spending plans, we would have had a real-terms cut to our NHS, which, at this time and given your interest in a healthier nation, could not be comprehended. Although it is, admittedly, a difficult spending decision for some of the reasons that you highlight, we are working with our enterprise agencies, the SNIB and others to ensure that we are getting the maximum possible from that investment and taking maximum advantage of the opportunities that are available to us.

I recognise what you have just said. We have been faced with a real-terms cut to our budget—the block grant allocation is down, as confirmed by the Scottish Fiscal Commission—so we have had to take very challenging decisions. However, as I said in my introduction, we are focused on areas where we think that we can generate the most economic activity and see the economic transformation developing a green and growing wellbeing economy. That is where the decisions that are relevant for my portfolio have been focused.

The SFC’s analysis of our economic performance is fair. Of course, we are tied to a UK economy that is underperforming. When we compare ourselves with many of our European neighbours, we see that we have lower GDP growth, lower productivity and lower fairness than those countries and that they have lower rates of poverty. My aspiration is for us to match those countries.

The GDP figures out this morning show that, for the most recent quarter for which figures are available—quarter 3 of 2023—we had higher GDP growth than elsewhere in the UK, although I accept that that is still low growth and is not in the areas where we want to see it. We have also seen over the recent period that the Scottish productivity rate is growing faster than that in the rest of the UK, although admittedly it is still slow, and we have lower rates of unemployment.

In the areas where we can make a difference, we are investing to do so and seeing results off the back of that. The problem is that we do not have the full levers of control over the wider economy, and we are tied to a UK economy that is grossly underperforming.

Yes, I saw that evidence. I more than understand the challenges that the retail, hospitality and leisure sectors face, not least because the Deputy First Minister, Tom Arthur and I met industry representatives last week to discuss them.

The Deputy First Minister set out the challenge that is before us in this budget, which is that, if we passed on the rates relief consequentials that came from the UK Government’s decision, not only would those consequentials not fully cover a similar discount in Scotland but we would have no potential to further increase investment in our national health service and other public services. A difficult decision was taken, and the decision that was—

Yes. In relation to last year’s budget, the on-going inflation-related pressures meant that we had to make in-year savings, so there were no opportunities for in-year flexibility. Of course, through this budget process and as we go forward, we will continue to consider industry representations, as we did last week. We have committed to further engagement with the industry on that basis.

The UK Government has not committed to providing rates relief beyond this year, so there will be a cliff-edge moment. It will be interesting to see what plans there are to provide continued support to the industry. We are looking to provide long-term sustainable support by considering the option of long-term rates reform that will assist the sector, as opposed to a one-off support package or a package for only a couple of years.

As I said, we are spending £5 billion across the Government to support the economy. Unlike the UK Government, we have taken the decision to prioritise public services. We cannot have a strong economy without a strong society. The two are mutually dependent, so it is incredibly important that we have strong public services at a time when our NHS is recovering from the pandemic and that we have a healthy workforce that is available to our businesses and employers. We have looked to strike a balance between making difficult decisions in order to find savings and investing in public services, including by giving our NHS a real-terms increase in funding.

However, I recognise that this is a challenging time for our business community and for others, not just because of this budget but because of 13 and a half years of UK Government austerity, which has meant that the resilience of the economy and our public sector is much reduced. We are doing what we can to ensure that our public services and our wider economy are supported. That is why we are making investments in the likes of the Techscaler network. We are looking to implement the recommendations in the “Pathways: A New Approach for Women in Entrepreneurship” report from Mark Logan and Ana Stewart in order to see greater diversity in entrepreneurship and more women start and scale up businesses. We are investing increased amounts in green energy in order to establish a supply chain that is rooted in Scotland. We are making decisions that, I hope, will lead to the transformation and further growth of our economy.

I thank Murdo Fraser for that personal slight. As I am sure the Deputy First Minister will attest, I have argued in Cabinet and in the budget rounds for investment in areas of priority that will lead to economic activity, growth and transformation. I believe that we have achieved that.

Of course, it is a challenging budget, but that is the case across the board. There is no area where we find an easy situation or a situation of plenty. As I said, that is down to the fact that we have endured 13 and a half years of UK Government austerity and have had a 1.2 per cent real-terms cut to our block grant in this year’s budget. We have to make difficult choices, including on taxation, to try to ameliorate that. It should not be for the Scottish Government to continue to mitigate the mistakes that have been made and the trouble that has been caused by UK Government decisions. We should look to seize the opportunities that are available to us. Sadly, we do not have that luxury at present.

Of course, I recognise and am sad about the survey from the Scottish Licensed Trade Association that was published this morning. That is precisely why the First Minister made it an early priority to establish the new deal for business. It will take time to rebuild our relationship with the business community. That has been one of my top priorities since coming into office, and I do not take it for granted. I will work to regain and re-earn that trust during my time in office, and I will ensure that the relationship between business and the Government is strong. We want to give sight of policy decisions as early as possible, support the business community to have the best possible trading landscape in which to operate—which is why we have provided the rates relief package—and ensure that its representations on issues that matter to it are heard.

Of course, we will not agree on everything; we will disagree. That is the nature of the relationship between business and the Government. However, when there is disagreement, I want to at least ensure that the business community understands why we are taking decisions and that we continue to advocate for it and on its behalf in relation to decisions that are taken for us by the UK Government.

Obviously, we take that into consideration whenever we take a decision on tax, and the Scottish Fiscal Commission assesses likely behavioural changes. We do everything that we can to make sure that there is a balance. Of course, there will be the potential for behavioural change, but I have not seen evidence of that. There is anecdotal evidence, but there is no direct evidence. Our decisions have allowed us to ensure that we have opportunities to invest in our public services. The premise of Mr Fraser’s first question was that a larger budget is available to the Scottish Government. The whole reason for that is down to the tax decisions that we have taken.

The discussions that I had last week with the hospitality industry pointed to much wider challenges with recruitment, including the direct impact of Brexit, with the loss of access to labour—people moving away from and people not coming to work in Scotland—and the stringent UK Government immigration system, which does not support the needs of the Scottish economy. I am willing to work with people in the industry. I gave a commitment to, in my representations to the UK Government ahead of its budget, provide evidence of how they are struggling to recruit internationally, and I will continue to work with them in that regard.

In relation to migration within the UK, for every year of the past 20 years, there has been net inward migration from the rest of the UK into Scotland. I am not complacent about that, but it points to the fact that Scotland is, indeed, a very attractive place to live, work and do business.

I thank Kevin Stewart for that question, which comes from his having quite a bit of experience in this sector. He will be aware, having started this process, of the work that is being done in the Government to advance the rights of the neurodiverse and the advocacy that is available for people with neurodivergent conditions through the new champion who is coming through, as well as work in other areas. He makes a sensible suggestion and one that I am more than happy to consider.

I see from my constituency casework the challenges for families with children with neurodivergence. Also, as the children grow older, as Mr Stewart points out, they face challenges in getting access to the employment market, even though, in the majority of cases, they have a substantial amount to offer, if very minor adjustments to the workplace could be made. That is where ensuring not only that the best kept secret in Whitehall—the access to work scheme—is better promoted but that other elements of Scottish Government support are tailored to ensure that we are taking full advantage of the economic potential that better support and access to work for people with neurodivergence can have.