Ben Wray, head of policy and research at Common Weal, explains the guiding purpose behind its new Book of Ideas, officially launched today [7 October]. You can order a copy of the book here.
COMMON WEAL officially launched our new book today, ‘Book of Ideas 2016/21’. The book has a narrowly defined focus but is broad in scope: what can Scotland do with the powers it’s got and is set to get when the Scotland Bill is passed and in place?
That takes into account every area of governmental authority that the Scottish Government which is elected in May next year will be able to wield for its five year term in office. The book is obviously not entirely systematic – there’s stuff that we’ve not tackled either because we haven’t had the time to come up with strong ideas for it (we’re a very small team with a limited budget) or we just haven’t been able to come up with policies that would actually make things better. In fact, in various parts of the book we advocate that what we really need is much more research and policy thinking done by practitioners and academics collaborating together to come up with answers, which is why we’ve proposed a number of National Policy Academies which would do the thinking on difficult policy issues that’s currently done behind closed doors by civil servants. We’re more than aware that we don’t have all the answers, and believe that part of changing Scotland is creating a more sustainable and well-funded infrastructure to come up with good ideas and to make those ideas well-rounded policies.
In any case, we think the book – with it’s 101 key ideas – makes a substantial contribution to the debate about how Scotland can use the powers it has got to become a more equal and a more socially and economically just society. This isn’t Common Weal’s vision in total – we are very clear that Scotland is impeded and disrupted in making progress by a UK Government that is going in the wrong direction quickly. Therefore the book is in part an attempt to find ways to remedy the harshness of Tory policy, but it’s also in part an attempt to find ways round the fiscal, legal and constitutional straitjacket which the UK state, in particular the Treasury, has bound Scotland in to, so that we can kick-on and do things other than mitigate the worst affects of a Tory Government and start working towards building the society we want.
“The book is in part an attempt to find ways to remedy the harshness of Tory policy, but it’s also in part an attempt to find ways round the fiscal, legal and constitutional straitjacket which the UK state, in particular the Treasury, has bound Scotland in to…”
Lets take a few different examples from the book to briefly illustrate how we can both work to mitigate, and find ways to get around, the Tory Government and the restrictions of the current devolution settlement.
First: finance . The Scottish Government has no power over financial services, an area entirely reserved to Westminster. Holyrood can only sit back and watch as George Osborne sells RBS off on the cheap. Does this mean nothing can be done to challenge the corrosive dominance of the big commercial banks on our economy and society? Definitely not, there’s things we can do both nationally and locally, it just requires a bit more creativity and doing things differently from what we might do in ideal circumstances.
I will leave the details to the book, but a substantial and powerful Scottish National Investment Bank can be built if a significant sum of the Scottish Government’s capital borrowing budget was put into it. A bank can leverage much more money for far greater investment than the Scottish Government can, as in and of itself Holyrood is severely limited by fiscal rules that are so restrictive it makes it impossible for Scotland to increase its levels of investment significantly above that of the UK as a whole – and, as is widely understood, the UK has one of the lowest levels of public investment in the EU.
This requires establishing a bank legally as an entity separate from government with a self-contained business model. This can create problem without strong, democratic governance, but the rewards if done correctly could be an investment bank comparable to those in other European countries that take creating a productive, balanced economy with a substantial manufacturing base seriously.
“A network of local banks could then have a dynamic relationship with the national investment bank, providing a common financial architecture in Scotland that could provide an alternative to the big banks.”
Secondly, there is nothing stopping local government establishing its own municipal development banks. These could be capitalised by directing local pension funds to invest in them. A network of local banks could then have a dynamic relationship with the national investment bank, providing a common financial architecture in Scotland that could provide an alternative to the big banks.
Second: Housing. While the Scottish Government does have powers over housing it has a limited ability to invest vast sums into the huge social house building project that Scotland needs to tackle our housing crisis. A national investment bank could help provide long-term borrowing for a National Housing Company, which would have a self-contained business model as it would borrow on the basis of future rents it will receive when the houses are occupied. This would allow rents to be lower than the private rental market, and would ensure that housing is built to a high-quality standard using the latest zero-carbon models, where houses are actually exporters of energy to the grid. The National Housing Company could have a business model of building to meet demand – targeting areas where the council house waiting list is greatest and building homes there. The national structure of it would ensure efficiency, and create thousands of high-skill jobs. What is required is an acceptance that the market alone is not going to solve our housing problem and the creativity to look at financial models and legal entities that get round the Scottish Government’s borrowing limits.
Third: Austerity. What can we do to mitigate the impact of the Tory’s slashing of the block grant? We outline a plan to raise PS500m a year through an overhaul of local taxation, including a land value tax on high value land, which could be put towards austerity mitigation. It isn’t enough to entirely mitigate the effects of Tory cuts, but at least it would get us some of the way there, whilst creating a fairer more economically useful local tax policy.
“Hopefully most of you will recognise the guiding purpose of the project – to show that there is an alternative to the me-first, neoliberal model people of my age have lived under all of our lives, and there is a fairly comprehensive set of ideas out there in Scotland now about what we could practically do about it given the powers Scotland has.”
You may well disagree with some of what I’ve outlined above (although I’d urge you to read the actual book to get the ideas in full) and that’s fine – we need critical engagement around these ideas, and hopefully it will spawn not just critiques of these proposals but also other proposals for how to change things. Indeed, there will probably be very few of you who agree with all 101 ideas (I don’t!), but hopefully most of you will recognise the guiding purpose of the project – to show that there is an alternative to the me-first, neoliberal model people of my age have lived under all of our lives, and there is a fairly comprehensive set of ideas out there in Scotland now about what we could practically do about it given the powers Scotland has. We do have the powers in Scotland now to at least start making serious progress towards an all of us first society.
Finally I’d like to give thanks to the many people who volunteered their time to comment on parts of the book, as well as all of those who have written Common Weal policy paper’s which provided the grounding for most of what is in this book.
Get your copy of the Book of Ideas now, at allofusfirst.org .