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I disagree fundamentally with the point about their incentivisation. I think that local authorities are incentivised to take such action. There is an extensive focus on what the Scottish Government is or is not doing to incentivise economic prosperity and growth, but a lot of levers lie with local government, and I do not think that there is always the same level of scrutiny of local government in that respect.

The visitor levy is one of the first examples of a measure in relation to which a local authority needs to consult extensively with local businesses before implementing a new economic intervention. Although it might be easy to keep coming back to the root, I invite all members to work with local government, too. Often, on planning, local taxation and local consultation, the levers lie with local government, and if we keep coming back to central Government, that undermines local government’s responsibility and duty to take action on those things.

This is a good bookend. In response to your first question, I said that the key for the new deal for business is the extent to which it filters down to other organisations. With things such as local taxation, there is a duty in law on local government to engage and consult well with local businesses. I will be quite bold and say that it is, therefore, the lazy option to keep saying to Government that the problem is with what we have or have not done on the legislation, given that there are extensive flexibilities in the legislation and there is a new responsibility on local government through which it is incentivised to engage well on these points.

Part of the answer is that when there is a new opportunity and a new responsibility on local government, local citizens should hold the relevant and appropriate level of government responsible for what it does. In this case it is local authorities. The same goes for planning and local transport decisions.

That is fine.

You were cut off at the beginning.

Thank you very much, convener. I thank the committee for providing the opportunity to discuss the new deal for business programme.

Thriving businesses are key to Scotland’s prosperity, and their success is critical to delivering the Government’s objectives. We are an unashamedly pro-growth Administration that is committed to working with business. Over the past 24 months, the new deal for business programme, which was designed to enhance the relationship between business and the Government, has been front and centre of our approach, and I am proud of what has been achieved collectively.

Before I go any further, I put on the record my huge and sincere thanks to Poonam Malik for her role as co-chair of the new deal for business group and for her commitment in providing her time and thoughts in co-chairing the group. I know how much parliamentarians value the input of business leaders, so we owe Poonam and many others like her a great debt of gratitude. I hope that that does not embarrass her too much while she is on camera.

Over the past few years, we have built good, strong relationships between business and the Government that recognise that Government actions and policies exist for a reason but that those actions have an impact on business. We need to understand the impacts of Government choices on businesses and work in partnership with them to minimise or mitigate those impacts.

The new deal for business programme was designed to kick-start systemic change and, although it was time limited, we always accepted that fully realising the change that we all want would take longer. Delivering the “New Deal for Business Group Implementation Plan”—our road map—for the past 18 months has fundamentally altered for the better how the Government engages with business. I am pleased that we have seen real change in the culture of Government, improved relationships with the business community, new tools and processes that support evidence-based policy development and better outcomes for all, and genuine enthusiasm and a new willingness to work together. I was heartened to hear, in the committee’s earlier evidence sessions, a clear acknowledgement that the desired change in culture across the Scottish Government is already happening.

I am delighted by those tangible improvements, which will be set out in more detail in the new deal for business group’s final report, which is to be published next month. However, I am not complacent. This is just the start, and I look forward to continuing to improve how we work with business and to building on the momentum through the means that are available to us.

Inevitably, there will always be things on which business and the Government do not agree, just as there are differing views within the business community. However, we see the successful conclusion of the new deal for business programme as an opportunity to double down even more strongly on how we work hand in glove with business. Together, we can deliver successful outcomes, minimise adverse impacts and maximise the opportunities for businesses to contribute to creating a fair, green and growing economy as the new normal.

I am very happy to take questions.

That is a great question. We are talking about a cultural change, and sometimes that can be difficult to pin down. However, I have very specific examples of how the culture has changed.

First, we have earlier, more effective engagement with business on policy objectives—we bring people in at an earlier point in discussions. At one of your evidence sessions, there was an indication that there had been change in relation to last year’s programme for government and in the budget, for example. Business felt consulted at a much earlier stage and then could see tangible evidence of asks being reflected back in the budget and the programme for government.

Secondly, there were specific sub-groups. The non-domestic rates sub-group, for example, was brought in at a critical point in the parliamentary calendar so that we had an opportunity to hear back from it. The regulatory review sub-group provided specific advice to ministers and officials on a number of different issues, such as heat in buildings, minimum unit pricing, single-use cups and legislation on non-surgical cosmetic procedures, and a refreshed business and regulatory impact assessment and guidance were co-produced.

Those are just some of the different systemic and process ways in which there has been change. Ultimately, the test is whether there is a culture change across Government so that different parts of Government no longer work in silos.

The economy directorate has always understood that the business community, which is not homogeneous, is a key stakeholder. If you are working in health policy or environmental policy, you have a lot of stakeholders to take into account, and business may not be your first consideration. Through the new deal for business, we have changed things so that there is a means of bringing in business stakeholders at an earlier point.

For example, when I came back into government last summer, one of the first groups that I chaired was a group involving the new deal for business group, which heard from public health experts on improving health outcomes. I cannot recall that happening previously, but we did it to break down silos.

Those are some tangible examples of how process has changed to deliver a cultural change outcome.

I constantly ask that kind of question, because I often hear it said that the business community thinks X, Y or Z, but that completely fails to recognise that there can be disagreement among our wonderful businesses on different things. With subject area policies, some businesses might benefit from a policy change and some might not. Therefore, getting a fresh perspective really matters. Trade associations and organisations often speak on behalf of a group of businesses, but even they recognise that issue. For example, by its nature, the Federation of Small Businesses represents lots of small businesses in different sectors, which means that there are different views on different things.

Bringing in a fresh perspective is important. That is why I do not believe in continuing with particular groups indefinitely, because you want to bring in perspective. It is also why I strongly believe in engaging with businesses on a one-to-one basis. During Covid, I remember inviting officials to engage with businesses that had approached me and that bucked the trend—they were saying a different thing that was not part of the norm. We heard particular messages and then we would engage with small businesses that were saying something totally different. We engaged with them one to one rather than always viewing them as a group.

I am aware that many have said that Tony Rodgers—if I have remembered his name correctly—had a fresh perspective. I am happy to engage with him and others like him on their solutions and suggestions.

They are to a greater extent as a result of the new deal for business than perhaps was the case previously. Your example is about implementation of laudable policy. Wherever a policy originates from—and a laudable policy often originates in Parliament if there is consensus; such policy does not exclusively originate in the Government—our responsibility, I believe, irrespective of where we are in Government, is to bring into the conversation at an early stage those who will be most impacted and then to consider implementation of that laudable policy.

I gave you a list of different issues that the regulatory review group has been looking at. You could argue that none of those—legislation on non-surgical cosmetic procedures, heat in buildings and single-use cups—sits explicitly in the economy space, but those on the front line of implementation in those areas are largely in the business community. As with your pharmacy example, if they have to change their approach or their practices, or try to mitigate some of the impact, they need to be brought into the conversation much earlier.

We have trialled that with the new deal for business. On public health inequalities, for example, and some of the policy suggestions around health outcomes, alcohol, foods that are high in fat, salt and sugar and so on, rather than talking to business at the end of the process, we bring them in at the beginning to understand how a laudable policy aim can be implemented by those who will ultimately be tasked with that.

Your pharmacy example is brilliant because pharmacies are on the front line. They are the place where citizens interact with a policy change. It does not lead to the best outcomes if pharmacies are not brought in at the beginning and are left to implement at the end. The new deal for business has tried to change that—successfully, I think.

Yes. You believe everything else I say, though.

It is an on-going process. In terms of the change, the new deal for business has, first, made sure that the processes take into account the impact on the economy. Whether it is through the regulatory review group or the refreshed business impact assessments, there is a test that officials need to answer before they introduce anything. There is that process point.

The second thing is to get people thinking in a different way about implementation. We are doing through the Cabinet sub-group, which I have introduced. It is a part of Cabinet that is focused on economy and investment. That goes to the point that I shared with Kevin Stewart. Everybody is involved in the job of attracting investment or, sometimes, pushing investment away. We have had some useful conversations in that group—it is quite free flowing—among cabinet secretaries as they think through the impact that their decisions on transport, housing, social justice or health have on investment in the economy. That forum, starting at the top, takes into account not just whether a decision is right or wrong but what impact it has on the economy and investment. My hope is that that then filters down from those Cabinet-level conversations.

The third thing is the test of whether the approach is having an impact. I hear feedback on that pretty quickly. If businesses are up in arms about something—for example, if the pharmacy that Kevin Stewart mentioned is unhappy with something—that gets back to me pretty quickly and we realise that it has not worked in the way that it should have.

The caveat is that not all stakeholders will always agree with what Government does, irrespective of how Government does it. In some areas, you have to make binary choices about proceeding with a policy that may not be completely popular among one demographic. That will always be a challenge. The key there is to have no surprises, to explain the decision that we have taken and to look at any ways of mitigating that. That was certainly the case in the budget, where some parts were positively received and some were less positively received, but there was a reason behind those decisions—for example, it was about additional resources for something.

That is the approach. However, this is not simple and straightforward. Government is engaged in the business of trying to achieve multiple objectives, and sometimes we just need to be honest and own up to the fact that objectives sometimes come into conflict with one another, and you have to come down on one side or the other.

That is critical. It is probably the biggest question in terms of culture change, because cabinet secretaries can be on board and can see the opportunity but, ultimately, they are partly dependent on the advice that they receive. They get advice on process implementation, who is saying what, who is happy and who is not happy. The engagement needs to happen at official level, too.

Talking about officials, I will ask an official.