Scotland needs good economic advice and Brian Wilson questions if the Council of Economic Advisers is enough
In more normal times, there would be greater attention paid to the fact that the Scottish economy is not doing terribly well, in either absolute or relative terms. These things used to matter, not least because they translate directly into jobs.
An increase of 18,000 in the Scottish unemployment figure, over summer months when it normally falls, deserved more attention than it received. A pre-devolution Scottish Office would not have escaped opprobrium for a headline figure of 170,000 out of work, and neither should the Scottish Government, with far greater powers and money at its disposal.
Neither rising unemployment nor a negligible growth rate is likely to bother the conclave of happy-clappies, to borrow Jim Sillars’ felicitous phrase, currently assembled in Aberdeen. Insofar as they notice at all, it will only be in order to blame someone else. But that would hold more water if the trends were the same in the rest of the UK. They aren’t.
It is impossible to quantify, because nobody makes these announcements, but anecdotal evidence suggests that investment decisions are being made which factor in the political uncertainty which continues to be perpetuated in Scotland. Talk of a second referendum cannot all be about a political calculation for the SNP, which is how the Nationalists currently behave.
The “respect” promised by First Minister Nicola Sturgeon, if it means anything, must involve recognising the many elements within Scottish society which are negatively affected by perpetual debate on the constitution, with everything else treated as pawns in that game. Ultimately, that obsession impacts on jobs and businesses. Warning signs are now flashing.
The stated economic priorities of the Scottish Government are to accelerate “growth through innovation and to reduce inequality”. Neither is going very well. Growth is stagnant and business pessimism rising while inequality, from cradle to grave persists without any obvious clue in St Andrew’s House about how to address it.
Indeed, given all the lip-service paid to combating inequality, it was ironic to learn that a Scottish-born economist who has devoted his entire career to studying its causes has been awarded the Nobel Prize for Economics. Angus Deaton’s career has taken him from Edinburgh to Bristol and then on to Princeton University.
One wonders why Professor Deaton’s expertise has not been harnessed in his native land, perhaps via the much-trumpeted Council of Economic Advisers. Who better to be advised by, if inequality is the biggest blight on our society? Perhaps the clue is to be found in the good Professor’s heartfelt view that breaking up the UK would have made him feel “personally dismembered”.
Prof Deaton could bring an internationalist view to combating inequality. It is, after all, a global phenomenon rather than a peculiarly Scottish or British one and he has studied it in many settings. The wider the economic gap, the less likely it is to be narrowed without a truly radical approach to the public instruments capable of reducing disadvantage.
There is minimal sign of any such imaginative thinking in Scotland, so perhaps we need a little external advice. Any government which avoids even the most timorous changes in taxation, using the powers at its disposal, can hardly expect to be taken seriously as strugglers against the rising tide of inequality.
Wondering why Professor Deaton has not been acknowledged as a prophet in his own land led me to check who the Council of Economic Advisers now are and what advice they are proffering on inequality or anything else at a time when the Scottish economy is plodding. It was not a very encouraging piece of research.
Basically, it’s the same old Nat-friendly faces. They have met once since the referendum. Of the six wise men and woman present, five were easily identifiable as having come out publicly for a “yes” vote. I’m still checking the sixth but let’s just say that membership does seem heavily skewed to support for The Cause, above any other qualifications.
So what advice are they offering in this hour of need? I can find no trace of any report or submission since the referendum but, fortunately for our enlightenment, there is the transcript of an appearance by four of them before a Holyrood committee last week. It is almost comedic in its unhelpfulness.
A Nationalist MSP bravely pointed out that the latest growth figures were “pretty poor in comparison with the rest of the UK… Why did we grow by 0.1 per cent when the UK grew 0.7 per cent over the quarter?”.
The chairman of the Council of Economic Advisers, Crawford Beveridge, replied: “At the moment, I don’t have an idea about why the growth level was at 0.1 per cent”. Thanks for that, Crawford.
Lewis MacDonald, a Labour MSP representing Aberdeen, was understandably concerned about the North Sea downturn and its impact on manufacturing. Crawford had it covered: “So far we have not had a discussion on that. I stress that we met for the first time in March and we are still trying to build up thoughts on where we might be useful”.
He was not the only one asking that question. This is October.
The conclusion I draw is that the Council of Economic Advisers continues to be a group of nodding donkeys for the SNP, which is wheeled out occasionally to endorse whatever wisdom is required of them. If it takes six months to think about having a discussion about the impact of the North Sea downturn, what is the point of them existing?
Scotland certainly needs economic advice – but it should be from people with knowledge and experience who have no political loyalties and, critically, whose interest is in maximising the benefits which can be derived from Holyrood’s existing powers and those, including over taxation, which are coming its way.
The horrifying possibility that these powers might offer the optimum economic (and hence constitutional) status for Scotland is unlikely to be welcomed by individuals who pinned their colours to the independence mast. Scotland now needs some urgent, constructive advice, rather than a group of cheerleaders who meet once every six months.
In short, there are at least 170,000 good reasons why Scotland needs to hear a lot more about the economy and correspondingly less about the constitution.