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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.

It is about more than that. At any point, we are grappling economically with different challenges. Some of those are unexpected, and some of them are expected but are happening more quickly than anticipated. Let us take the same example. The national strategy for economic transformation, which was published a couple of years ago, explicitly said that targeting new emerging markets was a big opportunity for the Government, and it explicitly talked about the energy transition. We then had ScotWind, in which the leasing round massively exceeded our original target. The Government agreed to that massive increase because it was such a huge opportunity. Government and its agencies, therefore, have to respond to what we were anticipating but at a much higher volume, and that is where doubling the resource and so on comes in.

Again, you look like you are about to come in with another question. I do not want to cut across you.

The new deal for business was established to deliver more effective engagement with business on policy objectives. Having been the economy secretary through part of Covid, I was conscious that there was a risk of the relationship with business being very tense. In many cases, businesses had been shut down for months on end and their sales had fallen off a cliff. Some business owners had not taken wages for almost two years. There was constant questioning and querying of why the Government was taking the decisions that it was taking.

Off the back of that, we entered a cost of living crisis in which businesses were dealing with spiralling energy costs and higher costs in other areas, with consumers struggling to contribute to the same volume of sales.

Therefore, the relationship between business and the Government was particularly strained. Businesses saw the Government introducing various policies and legislation and were asking where they featured in conversations and consultations.

The point of the new deal for business was to reset the relationship, to ensure that there was systemic change internally in the Government so that it took account of the impact on business, and to ensure that implementation was done through partnership, with business and the Government working collaboratively and collectively.

That was the issue that the new deal for business sought to resolve, and you can see from the overarching outcomes how that work was captured. I am happy to go into more detail on any of that.

Convener, I assume that, if anybody else wants to come in, they will indicate and you will bring them in.

Yes, yet he is doing very well by the sound of it. There is a balance here, and the Government should not be, and need not be, deep in the weeds of every single business. As Dr Malik said, there are thousands of businesses out there, and many of them are doing extremely well. Often, when they get in touch, it is to acknowledge something that is not going well. When businesses are prospering—when they are succeeding, recruiting, employing and contributing to economic growth—perhaps the less involvement they have with Government, the better it is for them.

Wearing my investment hat, I would make the point that we are taking a different approach to inward investment and to high-growth businesses. There are several things that we are changing and have changed in the past few months. First, we are taking a far more professional approach to investor relations. Rather than waiting for a business to approach us as and when it needs Government support or intervention, we are taking a far more strategic and targeted approach to that relationship. I can share a little bit about how we are doing that, if it is of interest.

Secondly, we are being really clear about where in Scotland the biggest opportunities for growth are and where investment is required. Until recently, we did not have a pipeline of all the highest-growth private sector-led and public sector-led opportunities—in many cases, because the private sector deals with seeking investment and so on itself. There has been a shift on the investment side of things, and I imagine that that quote could be replicated for a number of other businesses that, frankly, are running their business and not necessarily reading up on every Government report that is published, probably with good reason.

I have not reached out to him, but I will happily reach out to him.

I have spoken to Leon Thompson several times, and I understand the particular frustrations in hospitality and tourism. It has been a pretty tough period. However, taking Leon Thompson as an example, my diary and that of Richard Lochhead will confirm that there is extensive engagement with that sector. The question is whether we can do more to relieve some of the pressures on the sector. I imagine that, if you drill down into what some of the pressures are right now, those will include the massive hike in energy costs and the pressures of employer national insurance contributions going up. There will also be a number of other points that businesses in the sector will wish to make.

We do what we can to relieve some of those pressures. We certainly understand and engage extensively with those businesses on what their issues are. Government then has to make choices, in the round, about how to deploy resources as effectively as possible. That is where I take a more balanced approach that is open and transparent about the ways in which we can meet some of those asks but that acknowledges that, in some cases, we may not be able to meet those asks. That is the case for every Government. Yes, the Government has a focus on economic growth, but we also have to focus on getting to net zero, on having resilient public services and on ending child poverty. We need to balance all those objectives, and it would be foolhardy to say that those objectives do not sometimes come into conflict with one another.

I should have put an interest on the record at the beginning, as I have family members who operate a tourism business.

I do not accept that point about the legislation. I cannot remember precisely when it was, but I think that I came back into government halfway through the legislative process. In the responses to the consultation, there were a number of different calls. Some were very much in favour of a flat rate and some were very strongly in favour of a percentage rate. That proves the point that I shared earlier about the fact that the tourism industry is not homogenous. Some particularly small businesses were very hostile to a flat rate because, for them, it would have been a bigger percentage of the cost of a one-night stay.

The legislation was designed to try to make it as flexible as possible for councils. For example, there are a number of exemptions that can be included, and there are a number of different approaches and processes for collection. My view is that councils are now responsible for how they conduct the consultation, with VisitScotland input, and how they design a scheme that works for their local businesses. Although I am very open to feedback from businesses on how it operates, I stress that it is now a council responsibility. It was councils that wanted the enabling legislation, and they now have it. How they implement it matters, but it is ultimately their duty to engage with businesses on that point.

A review point is baked into the legislation. It is now Ivan McKee’s responsibility, and he is engaging at the moment as to whether there needs to be additional flexibility on the point about a flat rate. You will know that Highland Council was not in favour of a single flat rate, either; it wanted a tiered rate. There is complexity here, because different businesses and different councils wanted different approaches. The legislation tries to be as broad as possible. I strongly encourage councils to engage well with businesses and to design a scheme that mitigates any concerns that are raised.

No, not at all, because we have responded. We have responded to the increase, and, by and large, consenting is no longer identified as the biggest concern. What came through our Monday conference on offshore wind, where I was delighted to sit alongside Michael Shanks, is that the sector’s biggest concern right now is the uncertainty on contract for difference allocations and the fact that the work on grid connections is too far in the future. All of us know that there is a need to respond, but we are very proud of having doubled the resource in the consenting unit without much fanfare. We have just done it. That shows a flexibility of response.

The point about the high street is a bit more challenging, because many different factors impact on that, and some of them are outwith our control. The rapid rise in online shopping, for example, has had an impact on our high streets. There is also the impact of Covid. Where we can respond is by rethinking high streets and what goes into supporting them. It is a bit more complicated.

I am at risk of continually hogging this. Dr Malik, do you have any ideas to share?