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The SNP's Covid-19 recovery plan is a corporate compromise
Scotland will need radical political change after the coronavirus, but there is little sign that the SNP wants to deliver, writes STEPHEN LOW
The SNP's plan follows the advice of private-sector fat cats rather than the Community Wealth Building strategy that would see investment in core economic activities like housing, health, transport, education and care

IT should be a good thing that the Scottish government is drawing up plans for economic recovery after Covid-19. Given what their plans are however, enthusiasm should be strictly limited.

The SNP government outsourced their planning for recovery to a group chaired by former Tesco bank chief Benny Higgins, whose recommendations were accepted in full. The aim is a business-driven recovery.

The role of national and local government is to provide the stimulus for economic activity by providing low-cost funding for business and infrastructure investment and by creating the conditions for private enterprise to thrive.

There is no mention of public-sector job creation or utilising the Scottish government’s powers to intervene in the economy to protect or create jobs. The private sector is where jobs will be created, with overseas inward investment playing a significant role in this.

There are references to creating a “green recovery” and “community wealth building” but these have little substance attached. The report talks of building a “wellbeing economy.” This is usually understood as an economy organised around meeting people’s needs. The report’s focus however, is firmly on growth.

The Scottish National Investment Bank is urged to get up and running quickly this year and be ready to begin issuing bonds to raise additional capital. While there is no mention of direct interventions by the public sector to create jobs and stimulate local economic activity, a much closer relationship between the private sector and government is urged.

Very little of this inspires confidence. Promoting foreign direct investment has been an almost uninterrupted priority in Scotland for a half century. A law of diminishing returns set in on this a long time ago — where once there was computer manufacture and tractor plants, now there are Amazon fulfilment centres.

Similarly, the idea that providing funding and a cheap labour force for big business to deliver infrastructure will kick start a recovery has come under some strain recently. There was more than a grain of truth in the jibe that the new Forth Crossing was actually built in Guangdong and merely assembled in Scotland.

And while using Scotland’s ample wind resources to shift towards renewable energy is self evidently good, the example of BiFab shows that without decisive government intervention, domestic economic benefits can be minimal.

It’s not all bad of course. The report recommends that collectively bargained Fair Work Agreements should be put in place in the social care sector and in the hospitality sector, with a view to concluding agreements within a year (by June 2021). A Jobs Guarantee Scheme for young people aged 16-25 is also proposed (NB: employment is guaranteed, a living wage isn’t).

Welcome though these might be, more benefit is likely to be realised by adopting the Community Wealth Building strategy that the report mentions but does not take seriously. This would see investment in core economic activities — essential goods and services like housing, utility supply, health, transport, education and care.

Investing in these sectors provides both longer-term economic benefit and increased social resilience. Providing reliable incomes for workers, with returns that go into the community rather than offshore bank accounts.

This however is not being seriously entertained. Instead the City Region Partnerships who will be entrusted to deliver schemes are focused on delivering for business and reconstructing local services — such as further education — to fit. This planning in turn now seems quite out of step, having taken little account of the changes, as opposed to disruptions wrought by the pandemic.

Home working is one obvious example. This time last year the Office for National Statistics estimated 4 per cent of the workforce did some or all of their work from home. In April that had risen to 40 per cent. What was largely the preserve of managerial and technical grades has become routine for most administrative workers.

While things won’t stay at that higher figure post Covid-19, they won’t go back to anything like previous levels. In this new reality planning improved transport links to new town centre office complexes for which there is going to be hugely reduced demand seems less than entirely wise.

Shifting such thinking though will require a willingness on the part of councils to challenge the dominance of business in these structures (which at local level have no trade union input).

No-one doubts that we are facing an economic emergency. The only argument is whether its scale will be “unprecedented” or merely “massive.” Tackling this will require a willingness to take action that is both radical and a break with previous, failing, orthodoxies. So far the Scottish government is showing little sign of rising to this challenge.

Stephen Low is a member of Glasgow Southside Labour Party and previously a member of Scottish Labour's executive committee.

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