Scotland's economic policy has become stale, conventional, complacent, the same-old-same-old. It wasn't really fit for purpose before the pandemic and it certainly isn't now. We need to shake up business support, our public interventions and our preparations for the future if we're going to recover from the economic crisis ahead. But we can recover – if we show real courage.
It starts by recognising that bigger wasn't always better – the economy may have grown in recent decades but so did inequality, poverty and the climate crisis. But better can be bigger – we can grow in a way that puts money in people's pockets and fixes our environment.
We need to support Scottish businesses by putting their interests first and not those of multinational corporations. 'Community Wealth Building' – making sure that economies retain more of their own spending to support their own business base – has been shown to be very effective. Capturing more of Scotland's economic activity for the benefit of Scotland, and not foreign investors, means owning more of our own economy and bringing more supply chains home – not least in renewable energy, housing and food. We must use a Green New Deal to kickstart building up those supply chains and Good Food Nation strategy to boost our food production businesses.
In everything the Scottish Government does, every time it spends, it should ask itself, 'Can we get more money into Scottish businesses and can we do things to make them better?'. Because it is not foreign big businesses which will help Scotland truly recover, but our own domestic business base – and we can help to make them better businesses at the same time. Scotland must use 'smart procurement’, supporting growing businesses in the long term by spending strategically. There is no shame in Scotland owning our own economy.
But we're in an economic crisis and it needs an intervention now – tweaking things and hoping the future will be better is not enough. We need economic activity to expand quickly and we need to create jobs. There is no better way to do that than to build new houses and restore existing ones – and not by fiddling around with planning permission so big business can knock out another luxury development. We can create a publicly-owned housing company to build top-quality public rental houses out of Scottish timber, which give jobs and training to young people, rapidly growing a domestic supply chain of timber products, and of course providing great homes for people. If we do it right we can build as many houses as there are people who require quality houses, at affordable rents.
But we also need to prepare for the future because a lot is going to change. Scotland will need new skills, new businesses, new infrastructure, a new vision for what is possible. So we need to prepare by investing in training, innovation, research and development. And we need investment to be the right kind of patient, supportive, long-term investment that grows quality.
Put all of this together with the tax and investment policies above and this is the industrial policy Scotland needs to recover from COVID-19.
What is on this list won't be enough – no list will be enough. Healing our economy, fighting climate crisis, renewing our public infrastructure, reducing the injustice of economic inequality and ending the horrors of poverty – they are inseparable, and they are the challenge of our era, of our generation. Scotland does not have the power it needs to really get torn into these challenges. But until we do, we must use the power we have to get started.
Start shaking up Scotland's stale old economic strategy
Start putting Scotland's businesses first
Start building an economic future for the young
Start making inequality unacceptable when we grow
Start saving our environment with every job we create
Stop accepting any economy we're offered
Start building the economy we really need
- Push for a new approach to economic development which measures not just how the economy grows, but how the economy impacts on Scotland's people.
- Create an industrial strategy to rebuild Scotland's domestic business base by letting the Scottish National Investment bank access the plentiful capital available globally.
- Reform public procurement to get more public money into the bank accounts of domestic businesses and use 'smart procurement' to guarantee long-term order books which let them grow.
- Help Scottish businesses grow with the patient capital support of the Scottish National Investment Bank, helping and supporting them to be better businesses which are more ready to grasp the opportunities of this economic programme.
- Make it a priority to capture more of the supply chains which Scotland's economy needs by using Community Wealth Building and turn those into good jobs.
- Set up a Scottish National Housing Company to build as many top-quality houses as possible, as quickly as possible, to the highest environmental standards.
- Do everything to buy land at the best possible price and borrow from the Scottish National Investment Bank over the long term so the houses can be made available for the lowest possible rent.
- Build a major retraining programme into the heart of the Housing Company to train people in Scotland to fill the gaps in the construction workforce, and build the houses out of Scottish timber, so not only do we capture the economic value and stimulate a larger Scottish wood construction products industry but we also lock up atmospheric carbon when we build.
As we build a new generation of really first-rate care homes, (see below) use that building programme to further boost the supply chain industries.
- Over the next 25 years all of Scotland's onshore wind farms will come to the end of their working life and need to be replaced (the first very soon). The Scottish National Renewables Corporation will make sure that this time a far greater proportion of those major wind farms will embrace public and community ownership and that many more of the components from which they're built are made in Scotland, while supporting Scottish businesses to scale up to meet that demand.
- Ensure the National Investment Bank invests in Scottish food businesses to supply the food, as we introduce all-year-round free school breakfasts and meals for all early years, primary and secondary school pupils (see below).
- Set up a Training and Employment Grants Scheme to support businesses to improve and modernise the skills of their workforce and start a massive skills retraining programme for younger people and those not in work. That skills programme must be about the skills of tomorrow to prepare Scotland for the automation and artificial intelligence revolutions which are ahead.
- Start a Scottish Research and Development Fund to act as an incubator of the industries of tomorrow and to help existing businesses diversify and take up the challenges of the economy ahead of us. This also needs the implementation of the Logan review into stimulating IT skills in Scotland.
- Promote much greater development of cooperative businesses in Scotland which help to create a more innovative and balanced economy.
- Make better use of our national assets such as our land (through planning and land reform linked to a land tax), our ports and our seabed (by turning the Crown Estate into a People's Estate as soon as possible).
- Make better use of our ports by setting up a National Maritime Administration to explore ideas like Forth and Clyde gateway ferry ports and a global container transhipment hub, and to modernise and expand domestic ferry services and shipbuilding. The current split between the publicly owned Caledonian MacBraynes and its procurement agency CMAL has failed island communities and the latter should be abolished. Ferries should be refurbished and built to consistent designs on long term procurement contracts.
- Create a fund to transition Scotland's taxi fleet to environmentally friendly vehicles – but ensure the industry's survival by bringing the level of grant provided to taxi drivers to at least the level of Northern Ireland.
Has any word been uttered at Holyrood more often than 'jobs'? And yet has the picture really got all that much better? Certainly employment policy is reserved to Westminster and so is most of the power over the economy, but in the last 20 years work has become more insecure and fewer people wake up in the morning proud to go to a job they care about. And for so much of that time wages have stagnated, despite the economy growing (and house prices growing a lot faster). Far too often '500 new jobs' meant 500 insecure jobs barely paying the living wage. And it is far too rare for a Scottish worker to have any real say or stake in the company for which they work.
And for those without work the picture is even worse. Lacking the powers over social security, Scotland has been left at the mercy of Westminster which, over the last decade, has shown real brutality towards the most economically vulnerable in society. In or out of work, housing is at the heart of Scotland's welfare and scrambling to pay for a draughty house because that is the only option, should become a thing of the past. So is food – no-one in Scotland should go hungry.
We're always hearing that 'Our people are our greatest resource', but is it a resource we're investing in? Are we doing everything we can to ensure their prosperity and to maximise their welfare? The statistics on wages, inequality and poverty suggests we are not.
The best welfare is a good job you're proud to do.
Everyone deserves a wage on which they can live well.
To build a life you need a decent home to build it in.
No-one should be without enough cash in their pocket to live in dignity.
So, powers or not, ALBA believes Scotland can and must do better.