Even before the resignation of Nicola Sturgeon, it had become something of a cliché to talk about the need for a “reset” in the relationship between the Scottish Government and business.
The narrative has been that the Covid pandemic brought a business community fighting for their lives up against a government establishment sympathetic to their plight, but unwilling to adopt anything other than the strictest public health measures – and it was this clash that stretched the relationship to breaking point. Equally, it could be argued that the pandemic simply exposed long-standing weaknesses and tensions in how government translates high-level policy intentions into the real-world economy and the businesses it comprises. And, as with inequalities in education or between employees and the self-employed, Covid shone a bright light on some uncomfortable truths that could no longer be ignored.
What I think is clear is that the underlying issues that caused difficulties with businesses during Covid (such as not fully appreciating the business impact of decisions and taking insufficient account of how proposals would work in the smallest firms) weren’t new. It’s also clear that they were again at the root of what went wrong with projects like the deposit return scheme.
So, against this backdrop, little wonder that a relationship reset was one of the first things the new First Minister set out to tackle on taking office.
Having given himself some early breathing space by consigning a number of well-intentioned but poorly thought through Scottish Government proposals to the drawing board, or at least the long grass, last week saw, as promised by Humza Yousaf on assuming office, the first meeting of the “New Deal for Business Group”.
Led by Economy Secretary Neil Gray, the group aims to develop the best environment in which to do business. It’s a rare chance to look afresh at how government regulates, taxes and deals with business in Scotland.
So how did it go?
Well, from a small business point of view, I made the point that, before any new regulatory proposals see light of day, there should be a robust cross-government check to see how they fit, or clash, with other plans or rules elsewhere in government.
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And, to make sure all angles are covered, that check needs to encompass a detailed business and regulatory impact assessment, which specifically needs to look at how the changes will land with the small firms who comprise the vast majority of Scotland’s businesses. This is particularly important for proposals which emanate from departments furthest from the finance and economy corridors, where economic effects of policies may not be readily apparent to officials or, indeed, their chief concern.
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Crucially, though, it’s the overall impact of all new policies and regulations that needs to be understood. Talk to many small business owners and they’ll tell you that it’s the cumulative effect of the seemingly relentless conveyor belt of new rules and costs that really does the damage.
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Encouragingly, these are exactly the sort of issues that seem to be on the table.
More challengingly, of course, is that we’re now charged with devising practical solutions to these hitherto intractable problems. And, given the overall state of the economy and pressures on business, we need these solutions in pretty short order.
It will be a stern test. But with the expertise of senior civil servants in how government systems work, business voices who know how things land in practice and political will at the highest level, we’ll give ourselves every chance.
I understand that, if you’re a hard-pressed trader faced with the immediate struggle of balancing the books, this might not seem immediately relevant to your bottom line. But there’s a reason that we at FSB have spent years trying to crack this particular nut – because we know it will make Scotland a better place to do business.
And, if it’s a better place to do business, it will also be a better place to live, work and enjoy top-quality public services. A thriving community of small businesses who pay taxes, create local jobs and innovate new products and ways of doing things is essential for the type of Scotland we all – from Holyrood to the high street –want to see.
Colin Borland is director of devolved nations for the Federation of Small Businesses
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