How Covid economic crisis is making inequality worse – Richard Leonard

Poverty caused by lost jobs is not evenly distributed, with sectors like oil, culture and tourism needing particular help and more work needed to boost Scotland’s green economy, writes Richard Leonard.

Experts fear the pandemic and low oil prices will decimate the North East’s economy, says Richard Leonard (Picture: Jeff J Mitchell/Getty Images)

Over the last few days, there has been a worrying increase in the number of positive Covid-19 cases. Yesterday the reported Scottish average went up to 6.3 per cent of newly tested people, testing positive. In some health board areas, it was even higher. The World Health Organisation has said that if the number of positive test results is below five per cent of the total number of people tested for 14 days in a row then that means the virus is under control.

So, a sustained rise above five per cent of positive tests is cause for concern. Perhaps there was a degree of inevitability that there would be an increase in the number of reported cases as more elements of society have opened up: schools, workplaces, colleges and universities.

However, it is the speed of the spread of the virus which is ringing alarm bells.

It will be how our governments react to this new development that will determine how long the virus remains with us.

Critical to this will be the transparency of government. We have continually called for better sharing of the scientific advice the Scottish Government receives. This has been intermittent, and all-party leaders meetings to discuss the pandemic in Scotland ended months ago.

This is important because, across the country, people are anxiously waiting the announcement of further restrictions. Those on the frontline of our National Health Service who have done so much to protect and save lives for the last six months, those who have only just been able to start visiting their loved ones in care homes again and those who have had to rely on foodbanks to feed their families with no end to their impoverishment in sight and no job on the horizon.

We know that the toll on health during this time, physical and mental, has been acute and that the burden has been unequal. And everybody, the Chancellor of the Exchequer included, knows that we will be neither out of this pandemic nor out of this recession by the end of October. Which is why the Job Retention Scheme, which has provided a vital lifeline to around 350,000 in Scotland with working people being paid through the scheme for all or part of their salary, must be extended beyond the end of next month.

It is a matter of record that Labour brought forward a proposal in the House of Commons to extend the furlough scheme with a sector-based, targeted approach that would protect workers as the second wave approaches. But the Tories, including every one of the six Tory MPs representing Scottish constituencies, voted down the plans. And even though the Chancellor has hinted in the last few days that it may be replaced with something else, his government seems to be pressing ahead with the cancellation of the scheme in its current form in less than 40 days’ time.

With over 10 million people now subject to localised lockdowns in various stages across the UK and with further curbs more and more likely, it makes no sense that employment support should be terminated when economic demand, far from recovering, is likely to be taking a further nose dive. That’s why at the weekend I made a call for the Chancellor to look at a targeted scheme for Scotland that takes into account the specific requirements of the industries based here.

This should be done working closely with the Scottish Government and Parliament, it should be cross party and involve both business and trade unions.

One obvious and urgent industry where targeted intervention is needed is the oil and gas sector. Already in trouble, experts are forecasting that the pandemic and low oil prices are likely to cause an additional 30,000 job losses across the UK and decimate the economy of the North East of Scotland. Direct support from the UK and Scottish governments would ensure not only that these jobs are saved but that the industry and the workers in it are able to play a critical transitionary role in the country’s economic recovery.

Others, too, spring to mind. I recently visited bus builders Alexander Dennis in Falkirk, which is facing temporary closure. It is a critical pillar of the Scottish economy and an industry of the future. It needs lifeline support and the delivery of a promise of orders made earlier in the year by Boris Johnson. It needs aid and work now.

Or what about those BiFab workers at Arnish Point, Methil and Burntisland who have learned in the last few days that a £3 billion order to build jackets for 114 offshore wind turbines off the east coast of Scotland has been placed at fabrication yards in China and the United Arab Emirates? That the wind farm developers including SSE have been allowed by both governments to place this work thousands of miles away at a time of the worst economic downturn for 300 years is unconscionable.

What’s worse, the SNP waxed lyrical again about their commitment to green jobs in the Programme for Government presented to Parliament a few short weeks ago. I can’t think of many greener jobs than those in renewable energy fabrication work and public transport manufacture. With the ink barely dry on an SNP commitment, it is already being broken and lying in tatters.

There are other sectors of our economy and parts of our society that have barely survived lockdown once and will be at further risk from any tightening of restrictions this week. Tourism, culture and those reliant on the night-time economy were the first to be shut down back in March and they will be some of the last places to re-open. High streets across Scotland are in peril. It really is time for action and inter-government co-operation.

We know that the impact of this virus – the awful loss of life and the long-term health effects, the jobs lost, and the poverty caused – is not evenly distributed, that there are deep-seated inequalities in our society.

That’s why we understand that for reasons of public health, new measures may be necessary in the coming days, but the unequal economic and social impact must be not only mitigated, it must be tackled at its very roots.

Richard Leonard is leader of the Scottish Labour party

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