Hugh Andrew: Amazon jobs come at a high price for Scotland

First Minister Alex Salmond tours Amazon's new distribution centre in Dunfermline with Allan Lyall, Amazon's vice president of European operations
First Minister Alex Salmond tours Amazon's new distribution centre in Dunfermline with Allan Lyall, Amazon's vice president of European operations
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The online retailer’s investment has been celebrated by the SNP, which even helped fund it, but it represents a death knell for many independent businesses

THE Scotsman published an article recently containing seemingly unalloyed good news. Amazon is bringing 750 full-time staff and 750 seasonal staff to Scotland. A further 900 are said to be following at Waverley Gate in Edinburgh. And all this for the expenditure of a mere £10.6 million of government money. The pages of the paper were full of laudatory quotes and the government, of course, made the most of this announcement. Surely it is time we looked at the real story behind it?

It is this story that reveals the utter moral and economic bankruptcy at the heart of Scottish government.

Let us stand back and look at Amazon. It is a retailer, pure and simple. In a time of flat retail expenditure, its market share expands in only one way: at the expense of others. Those others are the high street and town centres across the UK, those others are independent businesses struggling to survive in an ever bleaker environment. It is a company that has paid minimal UK tax (apart from National Insurance) in at least the past three years. It is a company that has specialised in minimum-wage labour under no contractual protection whatsoever (last year it was censured for its behaviour in Greenock where, when the work finished in the small hours, workers were left unpaid and with no means of getting home). It is a company whose market share has grown to a great extent by predatory pricing and elimination of rivals through purchase. In a completely deregulated market it has proved a remarkably successful strategy. Don’t get me wrong. It is good at what it does. I buy from Amazon too! But I am not blind as to what it is. However, that this company should receive more than £10m for the privilege of being allowed to enhance its market dominance from taxpayers to whom it contributes little directly beggars belief.

Let us look a little closer at the monies given. This money would have paid near enough the ENTIRE salaries of those who work in the Scottish independent book industry for a year. How do they feel knowing their government is acting as a free advertisement for a company whose growth represents their death knell? How do the owners of the small bookshops of the North-East feel when their First Minister, their MSP, proudly announces he doesn’t support them, he supports an American behemoth?

One hundred years ago this country was the publishing centre of the entire world, a mere ten years ago or so a Scottish company was one of the largest booksellers in Britain. And now we are reduced to buying pick-and-pack and call-centre jobs with taxpayers’ money and boasting about it. This is the Scots crisis of confidence writ large and made government policy. Nor is this the first time this tawdry charade of the fake “good news” announcement has been used by government. Last year the First Minister announced proudly all the new jobs that Sainsbury’s would be bringing to Lanarkshire. Sadly there was no countervailing announcement about the Scottish jobs that the supermarkets would cost, the Scottish suppliers who no longer would have access to their market because their local outlets had been driven out of business. Research has shown again and again that supermarkets are net job destroyers, not job creators, and yet government continues to support them, stifling enterprise and encouraging monopoly.

At the root of this complete incoherence is a simple yearning: that of the politician for “good news” stories, and big ones at that. Unfortunately, this is something no small business can provide. Big “wins” need big business, and so in a sordid embrace politicians and business lurch incoherently along, filching the public purse. There is, after all, no news story to be tweeted or proclaimed in “more small shops in Scottish town” or in organic growth, and no photo opportunity for the aspiring politician.

For me as a Scottish businessman, with both bookselling and publishing interests, I watch with sadness and despair how a party that claims to be about restoring pride in Scotland has become merely a tool of interests inimical to the communities and people it claims to serve. For a small country to seek and buy the temporary attention of global multinationals is rather like a small furry animal seeking the loving embrace of a python.

Every big Amazon-type announcement, every new supermarket opening is another small death of Scotland. And how ironic that our new Amazon warehouse is beside the deserted Hyundai site which only a few years ago was trumpeted as a new Jerusalem for Scottish jobs. There is nothing new in pronouncements such as these – they belong to the same school as the “picking winners” philosophy of Labour in the 1960s and 1970s, the failed industrial policies of the last century.

Ultimately business flourishes not because of subsidy but profit, and it is the creation of a flourishing economic ecosystem which enables that profit to be generated. Every distortion, every subsidy represents not an enhancement of that ecosystem but its slow death. And to add insult to injury, it is indigenous business that will pay for its own destruction through a 5.6 per cent increase in business rates in the worst recession in our lifetimes.

The true irony of the SNP position is that it had and still has an enormous opportunity to articulate a genuinely different way of doing things, to create long-term strategic planning which creates demand in an economy, which works with Scottish business and not against it, to decentralise and not continue relentless centralisation. The SNP’s tragedy is like Faust’s: to achieve the one thing it dreams of, it has sold or forgotten everything that could make that dream viable and coherent. Surely it must perturb intelligent Nationalists that they are asked to vote not to make a difference but to continue with the same failed policies of previous governments. And surely the strongest argument against independence is precisely this: that it will produce no change, no hope and no dream.

At the end of Mussorgsky’s great opera Boris Godunov, the people of Russia hail as their great white hope the False Dmitriy. They are left alone on the stage as the Pretender’s troops march on to Moscow, alone with the dawning realisation that they are merely a tool for the powerful, and that the Pretender represents not hope or freedom but its opposite. Is this the prospectus that Scotland is now being offered: a new False Dmitriy for our times?

• Hugh Andrew is a partner in bookseller Yeadon’s of Elgin and Banchory, and managing director of publisher Birlinn