My lesson from meeting with Bernie Sanders

But somewhere along the line one wag came up with the caption “The man who will never be President meets the man who will never be First Minister”. Prophetic – perhaps, humorous – definitely!

Nonetheless the unfolding of events since then has left me unbowed in my faith in the socialist ideal and my innermost conviction that at its best Labour is part of a worldwide movement for radical and transformative change. That huge private wealth alongside rising poverty and deepening inequality is intolerable. That we need a redistribution of not just income and wealth but of power. And that democratic economic planning is required if we are to build an economy that serves people and planet rather than the other way around.

Setting about these big challenges was the right thing to do before Covid, and even without Brexit. But in light of the economic shocks and social division that they have caused it is now more urgent and has greater moral force than ever.

Let’s take just one current illustration of the distorting effects of private wealth holding.

It is true that some big supermarket retailers have lost market share over the last ten months, especially those with weak online offers, but they have all seen a dramatic growth in turnover.

As a direct result Tesco saw interim profits jump by 28 per cent in the first half of 2020, and dividend payments up by a staggering 21 per cent.Sainsbury’s paid out an interim dividend to shareholders broadly in line with the previous years but threw in a special dividend bonanza worth more than twice as much again.

These examples are not unique but reflect a dangerous long-term trend of company profits disproportionately going out in dividend payments rather than being reinvested in the business or its workforce.

But there is something else going on too which exposes our economy to huge risk and weakens it at the root.

Back in 2007 the SNP made a series of headline grabbing promises: from a pledge to abolish the Council Tax to dumping all student debt, from the introduction of a first-time home buyers grant to a radical cut in primary school class sizes. None of which were ever delivered.

It is also worth recalling that at the 2007 SNP Conference Nicola Sturgeon in the wake of the takeover of Scottish Power by Iberdrola undertook to “defend” our businesses and our industries “when they are under threat…Yes we will be economic patriots” she declared “– and we will be proud to be”

The Scottish Government’s own evidence reveals this to be another promise broken. Whilst the SNP in office has championed political nationalism at every available opportunity, it has been posted missing when it comes to the economy and defending our national interests in it.

The results are dramatic.

Only one in five large businesses in Scotland are now Scottish owned – 82 per cent are not.

Over a half of all business turnover in Scotland is generated by businesses with their ultimate base outside Scotland.

Over a third of all workers are employed in these firms: that’s nearly 700,000 jobs.

Don’t get me wrong. For years the UK has cumulatively attracted the highest level of foreign direct investment into the country of any in Europe, it has also exported the second highest level as well.

But external ownership and control of the Scottish economy is much greater than other parts of Europe and much greater than other parts of the UK.

All the more reason to heed the warnings issued by the United Nations Conference on Trade and Development that the Covid pandemic will seriously crash Foreign Direct Investment.

The Scottish economy’s high dependency on investment, and disinvestment decisions in faraway board rooms makes us especially vulnerable and so susceptible to capital flight.

The economic practice of the Scottish Government has been to make Foreign Direct Investment central to its economic strategy, even when this takes the form of mergers and acquisitions of Scottish owned companies.

The time has come for a radical rethink.

Since 2007 little has been done to promote reshoring of production, or diversifying the woefully narrow base of our economy, let alone extending the ownership of it.

The decision to repurpose and re-invest in indigenous business in a planned way over the last year to source Personal Protective Equipment opens the lid on the possibilities.

At last the creation of a Scottish National Investment Bank should also provide a new public institution for building from the bottom-up, for promoting local and democratic forms of ownership, and for backing small and medium sized enterprises.

In the week of the Scottish Government’s 2021 Budget the time has come to look at the use of public procurement, grant aid, equity shares and loan facilities to drive up labour, environmental and tax justice standards.

But some initiatives are not simply about money. They are about how we do things and how we organise, and what the national purpose is.

That’s why a Scottish industrial strategy with full employment as its goal must be adopted. It is also why bringing together Government, industry and trade unions at a sectoral level to plan and invest in the economy, identifying new needs and new demands, over the next five to ten years is the right thing to do.

We need vision, urgent action and long term thinking.

It is a conclusion I have reached not only by meeting and listening to leaders with conviction like Bernie Sanders but by being inspired by the real lived experiences of working people the length and breadth of Scotland and their burning desire for change.

My lesson from meeting with Bernie Sanders - Richard Leonard

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