Chamber and committees

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.

That is why I said that this is just the start. I totally recognise your point about the bold statement on culture change and why I probably did not say in my opening remarks that it is job done, tick, because—

Yet the Diffley Partnership “Understanding Business” survey showed that around 48 per cent of 600 businesses surveyed said that they believe that the Scottish Government does understand their concerns. I take what the Fraser of Allander Institute reports as a reason to double down, work harder and be as open and as engaging as possible, but I also take into account the Diffley Partnership work and the improvement that Dr Malik outlined a moment ago.

We will keep focusing on the feedback that we get in all different forms. I assure anybody listening that we are nothing but accessible. I am accessible on a Friday morning in my constituency, with a surgery when businesses can drop in, and my diary shows that I am accessible in engaging extensively across different sectors. We are listening.

I think that what businesses often define as effective engagement is not just the listening and the accessibility; it is seeing their asks reflected in policy. I was encouraged by the feedback on the programme for government and the budget. We did not deliver everything that business wanted—we were open about that—but we did see some very positive commentary, particularly from the Scottish Retail Consortium on the programme for government, which acknowledged that businesses do not want surprises. There were no surprises. A number of the initiatives do not sit in the economy directorate but were, nonetheless, music to their ears.

Sorry—who said that?

Businesses’ number 1 issue was the cumulative impact of regulation that, at times, felt as though it was all coming at the same time. So, what have we done? We have established a regulatory review group. We now have a built-in process that looks at the potential regulation coming down the line and ensures that there is a means of understanding, internally in Government, the cumulative impact of policy and regulatory decisions on businesses. That is why there was positive commentary about the programme for government and the budget in terms of there being no additional regulations at a time when, as one business told us, there was a list of different regulations that businesses were trying to comply with all at the same time.

Generally, businesses are not anti-regulation. However, when there is a cumulative impact on top of the cost of living crisis and dealing with the aftermath of Covid, it is challenging. That is one example of how ministers can scrutinise the cross-portfolio regulatory landscape.

I invite Judith Young to come in.

I think that Judith Young wants to comment on that.

I say very clearly, because I am in receipt of the same emails that I imagine Jamie Halcro Johnston is in receipt of, that it is entirely Highland Council’s choice as to whether to introduce a tourism levy or not. I have stressed that and emphasised it. There was extensive consultation when the enabling legislation went through the Scottish Parliament, but Highland Council is now running its own consultation. It is critical that the voice of business is taken into account, because we all know that the value of any such levy is the additionality for the experience of tourists.

My impression, which is based on the engagement that I have had with a number of businesses on a constituency level, is that most of them do not have an in-principle objection to the concept but they want their views to be taken into account in relation to how the council manages it. The City of Edinburgh Council is at a more advanced stage.

Absolutely. Here is an example: doubling the resource in the energy consents unit was not necessarily—unless my colleagues are going to correct me—considered to be a top priority for the new deal for business, but it has emerged as one of the top requests by developers in a sector that is forecast to deliver high growth to the Scottish economy.

The point of the new deal for business was not to capture all the policy asks in one place and then track whether we could deliver on them. The point of the new deal was to deliver systemic change in the processes and the tests for all policy development.

Being able to double the resource in the energy consents unit and target a sub 12-month turnaround time for planning applications is an example of how that has been achieved by an area of Government that would not necessarily see itself as being in the business of economic development but would see itself in the business of planning, regulation and so on. That is what I meant.

The test of the new deal for business will be whether that culture change continues. I personally think that—perhaps I will just claim credit for this—in the past six months, the approach has been embedded dramatically in a number of different organisations. For example, on the investment stuff that I am doing, for the first time, we have a pipeline of all the private sector-led and public sector-led opportunities for growth and requirements for investment. We have not had that before.

You look like you are about to come in with a second question.