As Scottish economy slumps, we don’t need SNP battle about powers – Brian Wilson

The report by the Advisory Group on Economic Recovery, commissioned by the Scottish Government, is unlikely to lead to practical steps to help the economy recover from the effects of the coronavirus outbreak, writes Brian Wilson
Benny Higgins led a short inquiry into how Scotland's economy can recover from Covid-19 (Picture: Lisa Ferguson)Benny Higgins led a short inquiry into how Scotland's economy can recover from Covid-19 (Picture: Lisa Ferguson)
Benny Higgins led a short inquiry into how Scotland's economy can recover from Covid-19 (Picture: Lisa Ferguson)

Here’s a piece of advice. If you want things to happen, don’t create an advisory group.

Unemployment in Scotland has reached ten per cent. Thousands of businesses are in crisis. None will be helped by another report which stargazes into the future of the Scottish economy.

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From the Scottish Government’s perspective, the hand-picked Advisory Group on Economic Recovery served its purpose by endorsing the right to borrow more and revisit the Fiscal Framework (which is due for review anyway). Thus a slogan is created to the exclusion of all else. Ian Blackford thundered at Prime Minister’s Questions about “increased borrowing powers” referencing the advisory group’s report. Kate Forbes wants to borrow £500 million. It’s all about “powers” – not what you do with them.

There is of course a case for flexibility in all quarters when addressing economic consequences of the pandemic. At present, we know neither the extent of that challenge nor the scale of the UK Government’s proposed response, from which Scotland will benefit.

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Scottish “jobs guarantee” called for in economic recovery plan

Is the right to incur Scotland’s debt really a point of high principle? We already carry a massive deficit while tax revenues, even before the pandemic, fell far short of projections. Creating large-scale debt which eventually must be repaid should be approached with caution.

Instead of working night and day within the existing framework, in certain knowledge that more money will become available on a UK-wide basis, the priority as usual is to pick a fight with the Treasury when all common sense cries out for constructive engagement.

I do find it astonishing that an Advisory Group on Economic Recovery should be made up of one banker, two business panjandrums, one tame trade union trusty and four academics, three of them living outwith Scotland. Nobody from manufacturing. Nobody from creative industries. Nobody from retailing. Nobody from financial services. Nobody from tourism. Nobody from oil and gas... No wonder the report is so non-specific when urgent, specific actions are the crying need.

The Fraser of Allander Institute said in response that there was nothing new in the report, it would end up on a shelf stacked with its predecessors and had probably been written by the same civil servants who wrote the previous ones. That seems about right.

A slab of the report is devoted to the Scottish National Investment Bank which does not yet function and is Benny’s baby. Yet if ever there was a time when Scotland needed the development agencies which have been ruthlessly run down to make way for the long-awaited SNIB, it is now.

Three years ago, the Scottish Government, addicted to centralisation, tried to get rid of HIE and Scottish Enterprise. After an outcry, they backed off but kept cutting their budgets and imposed an overarching “strategic board” filled with usual suspects which does heaven knows what. Would it not be sensible in current circumstances to restore budgets to these agencies, who know their territory, and empower them to protect jobs and viable businesses?

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On one positive point, I support a jobs guarantee scheme for young people. In fact, I wrote here previously that ministers should establish a version of the New Deal introduced in 1997 along similar lines. There was no need for an advisory group to say the same thing – with political leadership, it could have been well on the way to being up and running through local authorities. There seems to be an aversion to actual action.

Such critiques are usually met with the question: “What would you do?” So here are a few answers. 1. Do not set up an advisory board. 2. Ask 100 practitioners of Scottish business for ten ideas within existing powers at modest cost to protect jobs. 3. Define key areas for constructive engagement with the UK Government. 4. Focus immediate support on shovel-ready projects, cutting through bureaucracy to make them happen...

Within a month, out of that lot, there could be an action plan of practical measures. I will be delighted if the Advisory Group on Economic Recovery’s report has the same outcome. I will also be surprised.

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