As the Scottish Budget looms, large segments of the business community appear to be oozing discontent.

It is fair to say relations between the Scottish Government and business have been far from happy for some time now.

In spite of Humza Yousaf’s “new deal” for business, announced in spring of last year when he was first minister, it seems relations have not got any better. In some ways, this is surprising, given Mr Yousaf seemed serious enough about improving relations and also crucially the importance attached to business and the economy by Deputy First Minister and Cabinet Secretary for Economy and Gaelic Kate Forbes and First Minister John Swinney.

When I interviewed Ms Forbes in the summer, her focus on business and the economy came through loud and clear, and most genuinely.

Mr Swinney has meanwhile highlighted Scotland’s economy as one of his key priorities.

During the exclusive interview in June, Ms Forbes hammered home her belief that economic growth is crucial to delivering the Scottish Government’s “social justice” aims, including tackling child poverty and homelessness.

Lorna Slater, co-leader of the Scottish Greens, said in an interview with The Herald on Sunday in 2022 that economic growth was an area where her party had “a fundamentally different position to the Scottish Government”.

In spring this year, when Mr Yousaf was still first minister, the SNP scrapped its Bute House Agreement with the Scottish Greens, thereby ending the parties’ formal cooperation under this deal.

Asked in June if she disagreed with Ms Slater’s comment on economic growth, Ms Forbes said: “Economic growth was an excluded area from the Bute House Agreement for the very reason that the SNP does believe in the importance of economic growth and economic growth is essential but not sufficient to deal with all of our aims and objectives so it cannot be ignored or dismissed but equally you can’t depend on it alone - that is where evidence-based government policy is also required, for example around the Scottish child payment, or whatever it is.”

Ms Forbes added: “The way to deliver growth is of course if every business and enterprise and organisation is growing and creating success and households feel that they’re able to make ends meet through well-paid, secure jobs - then bringing those two together that’s essentially what economic growth is when you boil it all down. It’s the fact that individuals, households and businesses and third-sector organisations are all prospering, that’s what ultimately delivers national economic growth. And I don’t think anyone could disagree with the importance of households being able to make ends meet and businesses prospering.”

It was a most coherent response, with the common sense contained within it contrasting with much of what you hear from politicians. It obviously contrasts sharply with the absolute nonsense we had from former Conservative prime ministers Boris Johnson and Rishi Sunak on Brexit, although there are other, less extreme examples of a dearth of common sense when it comes to politicians and the economy.

The problem for the Scottish Government is that its apparently good and genuinely held intentions on business and the economy, and some impressive achievements on this front if you look at the likes of the nation’s great success in attracting inward investment, are not translating into improved relations with business.

Asked what she saw as different in terms of policy on the business and economic front with Mr Swinney having become First Minister and her own appointments, Ms Forbes said in June: “Economic growth is unashamedly one of John Swinney’s four top objectives.”


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On whether she saw it as difficult to balance maximising economic growth with social justice, Ms Forbes replied: “No, it is not difficult to balance at all. I have never seen even an iota of difference in our desire for resilient public services, for eradicating child poverty, for protecting our environment, and our economic objectives, for the very simple reason that we can’t achieve those objectives without economic growth. So when I look at our mission to eradicate child poverty, clearly we are investing substantially in the Scottish child payment. That investment comes through progressive taxation because of a growing and thriving economy but it can’t happen without the creation of well-paid, secure jobs, and that is where a growing economy creates the jobs.”

She added: “In terms of every single one of our public services, their resilience requires us to be generating public revenue that comes from businesses doing well, bluntly, and we are then able to reinvest that. So all of the Government’s social justice aims and objectives, from ending homelessness to ending poverty to dealing with the health inequalities that come from poverty, all of those can only be resolved in partnership with economic growth, and there is no path to resolving them without a thriving and prosperous economy. So I see no difference and I think those who create a difference do so by jeopardising their core aims.”

This seems like the kind of talk which should be reassuring to the business community, which is always understandably at pains to see its contribution recognised.

And there are plenty of senior business figures who have, in conversation, highlighted positive dealings with Mr Swinney and Ms Forbes.

Broader polling of business opinions tells a somewhat different story, however.

In a survey commissioned by the Scottish Tourism Alliance (STA) industry body, 85% of respondents said they have no or low trust in the Scottish Government to deliver funding for the tourism and hospitality sector over the next 12 months, with 58% having no trust at all.


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Given a choice of 18 priority actions the Scottish Government could take to create the best environment to do business, 47% of respondents to the STA survey stated “greater recognition of tourism as an economic driver” in their top three.

A survey published last month by the University of Strathclyde’s Fraser of Allander Institute showed 9% of firms north of the Border agree that the Scottish Government understands the business environment in Scotland, compared with 64% of businesses that disagree.

These percentages matched those in a survey published by Fraser of Allander in August last year.

Clearly, the Scottish Government’s decision not to extend business rates relief for the hospitality, leisure and retail sectors as was done south of the Border has been a problem for many business leaders in these industries. And the discontent over this has probably affected the opinions of others in the business community about the Scottish Government.

The build-to-rent sector has meanwhile made a great deal of noise about worries over what new legislation might mean in terms of rent controls in Scotland.

Relations between business and the Scottish Government have clearly not been helped by years of excruciatingly tight Budgets, which have arisen in large part because of failures at UK Government level on the economic front, including but certainly not limited to the Brexit fiasco.

There is a little bit more money around as we approach next Wednesday’s Scottish Budget, though things remain tight.

Labour’s UK Budget last month has added £3.4 billion to the Scottish Government’s Budget for 2025/26 by way of Barnett consequentials.

The Scottish Government obviously has many pressing priorities, and it remains to be seen how much of this boost to the Budget will go towards things of which business might approve.

How that pans out might, at least to some extent, have an influence on where relations go from here.

That said, the business community’s opinions seem entrenched, and at times, though far from always, they might be influenced by personal politics or views on independence or whatever.

You get the impression that, even if business got everything it wanted from the Scottish Budget on business rates and more, which you would imagine it will not, there would not be any kind of sudden thawing of its relations with the Scottish Government.