Robin McAlpine: As the government sleeps at the wheel, this is how we could save the economy

“We also need to make some serious choices. You can keep financiers and corporate lobbyists happy or you can build a stronger indigenous industry base, but not both. Scotland has to choose the latter.”

THIS might seem an obscure ‘read of the week’ and you’ll still be left guessing after reading it, but Douglas Fraser’s analysis of why Scottish Enterprise’s top boss is suddenly leaving is just one more indicator of something I’ve been repeating a lot – Scotland is drifting into an economic crisis without so much as a clue.

This isn’t going to be a pessimistic article; it’s all about solutions. But you can’t solve a problem you don’t acknowledge exists and there has been far too little honesty about where we currently stand.

First, Steve Dunlop. When he was appointed to the top role in Scottish Enterprise I heard very positive things about him – he had fresh ideas (which weren’t at odds with many of Common Weal’s own), he had energy and he was a clever guy. I never met him, but people I rate rate him.

And suddenly, out of the blue, he’s about to be gone. This is not normal. It certainly isn’t normal right now. The strong impression is that he has had a tough time dragging Scotland’s flabby and outdated economic strategy into a new era and that everything economic post-Covid has been, shall I say, sub-optimal…

Or let me be more direct; if there is a human alive who thinks the Scottish Government’s economic plans might be a suitable response to the crisis we’re in could they phone me – I’d be really curious. It’s not just bad, it’s a joke. As Common Weal pointed out at the time, most of it is in the past tense.

We can’t afford to mince words here because this is too important. Fiona Hyslop is more out of her depth than any government minister I can remember, Kate Forbes has ten minutes of experience and Nicola Sturgeon appears too busy with her daily TV show to spare time to take an interest.

Like so much since Covid, the Scottish Government prioritises only the look of things, not the substance. Rather than ask Scottish Enterprise or one of its endless existing economy-related committees, subgroups, reviews or advisors to work on an urgent plan, the first minister set up yet a new one. (Where’s the ‘ta da!’ for your TV show if it’s not a ‘new thing’?)

What’s quite worrying is that everyone from Common Weal to the Fraser of Allander Institute to the CBI has been trying to tell you that the bus is heading towards a cliff and the driver is nowhere to be seen. Now it seems the top economic development expert in Scotland is doing the same.

It’s coming to a head; I don’t agree with everything in this piece (which isn’t serious about public health impacts) but its spot on about the absence of strategy. The problem is that, like the failure to get a proper grip on Covid in July and August when we were pretending to be on an ‘elimination strategy’, this should all have happened months ago. So how do we get our act together quickly?

There are certainly substantial limitations on Scottish Government options because of the available powers, but that’s hardly news. Common Weal set out a strategy based on those limitations so it’s worth just repeating that strategy here.

To begin, we need to find major sources of the right kind of investment into the Scottish economy but without proper borrowing powers. Common Weal identified five sources. First, stop using public procurement as a way of shuffling money into wealth-extracting corporations and use that spend strategically to support Scottish businesses. That could be billions of pounds.

Second, seek emergency dispensation for the Scottish National Investment Bank to allow it to capitalise from sources other than the Scottish Government (especially pension funds) and use that to drive major investment into businesses that need to transition to new models. Common Weal called for this almost immediately, and the Benny Higgins report also called for it in June.

Third, target economic activities that the Scottish Government can stimulate but which are self-financing. Public rental house-building and public energy investments are no-brainer examples which do not require public subsidy.

Next, get past the free market dogma and use an industrial strategy to capture much, much more of the supply chains. Manufacture our own energy technologies, source building materials from Scottish producers and so on. This is why these projects need to be public because corporations will not do this (as we’ve seen over and over).

And then finally adopt an ‘import substitution’ approach where we get Scottish consumers to buy more domestic produce through both structural reform and messaging campaigns.

That creates the ability to get serious investment into small business and big projects and keep the public money for activities which cannot currently sustain themselves (like the arts and tourism sectors). But the capacity needs to be met with demand. There are too many demand-stimulation ideas in our work to cover here but let me pick one for now.

We have giant need for new jobs, major need to help businesses adapt and start up, lots of investment potential and a massive project ahead to tackle climate crisis in Scotland. Put them together and you have a Green New Deal-based industrial strategy. We have 25 years of major engineering work ahead of us so let’s get started and use it to stimulate the economy. If you do it right, it pays for itself.

That’s investment and demand. What about supply? Here there are two big requirements – a trained workforce and a load of supply chain businesses. Given there is a looming unemployment crisis, the former is straightforward; we need a massive retraining plan to get people ready for the jobs that would be on their way (this isn’t ‘training because we don’t know what else to do’).

And we’ve got lots of businesses (and business leaders) in deep trouble but we also need these new (or diversified) businesses. That’s why we proposed a specialised economic transition agency. We need to get our hands dirty, talk to real businesses and help them to make specific transitions to specific new roles which have guaranteed order books. That in turn is why we need that industrial strategy.

We also need to make some serious choices. You can keep financiers and corporate lobbyists happy or you can build a stronger indigenous industry base, but not both. Scotland has to choose the latter. Common Weal talks to Scottish businesses all the time and they all feel like an afterthought to corporate-pleasing. We need to reverse that; it is our business base that gets us through this, not Amazon.

And we need to make some hard choices because it’s not all coming back as it was. Some things will fail and some can be sustained. If we leave that to the free market alone, we’ll be in big trouble because the free market has become dominated by monopoly corporations. Inaction will simply strengthen those monopolies at the expense of everything else.

There are things we should let die back (a proportion of city centre retail which does little for the local economy). There are things we need to adapt anyway (we need the right kind of tourism because over-tourism is harming communities). It’s either creative destruction (with the emphasis on destruction) or its creative adaptation. Choose life people…

I have enormous faith in Scotland’s indigenous industry base. To my eyes, so many of them have been exemplary contributors to the Covid fight, providing something approaching a public service in many cases. I don’t know many who don’t want to do the right thing for their employees, for their community, for the country. It is largely these businesses which are issuing a scream of frustration.

You may not like Common Weal’s ideas, but you must surely accept they’re coherent. We analysed threats and opportunities, strengths and weaknesses, the present, the immediate future and the future after that. We put them together in a coherent way designed to achieve specific outcomes. Or to put it another way, this is a strategy, not another damned soundbite.

If it’s not this, what is it? It is definitely not the vacuous nothingness of what the Scottish Government has the brazenness to call ‘a strategy’. Does it have to appear in the first minister’s personal Twitter feed before she pays attention? Is there anyone else in her Cabinet? Do officials have only the options of typing this stuff up or abruptly resigning?

How much economic damage is enough economic damage before the conversation starts? What has to happen to drag Scotland out of its opium-daze of starting at a TV screen saying ‘that sounded nice’? Do businesses have to collapse and even more people go hungry before there’s a real demand for action?

This is as serious as it gets. This is the future of our nation, the fabric of our economy, the lives of our people, the hopes of our young, the raw materials of hope and belief and courage.

I stand shoulder to shoulder with Scotland’s indigenous business base on this. The Scottish Cabinet should get serious or focus the next round of redundancies on itself, and not the poor souls trying to make a living running a businesses or finding a job in these difficult, difficult times.