Robin McAlpine: How do we start to rebuild?

“If the government is incapable of saying no to the powerful, it will all go wrong. But the housing lobby, the property development lobby, the retail corporations, the financial services sector and the landowners can’t get everything they want this time. Does the Scottish Government have the courage to say no?”

Common Weal Versus the Virus: The virus is exposing the reality of the weaknesses in our economy, society and democracy. Over the last six years Common Weal has been showing that the weaknesses can all be fixed. Over the next few weeks Common Weal Director Robin McAlpine will write a series of columns showing how Common Weal policy is the best way to survive this virus and then rebuild when its over. Today – starting the rebuilding

I’M trying really, really hard to be positive and optimistic right now but jeez the First Minister of Scotland makes it really, really hard. Just when it looks like she’s finally going to U-turn on her ‘Ich Bin Ein Londoner’ strategy (under enormous pressure, mostly from Common Weal) she goes and does this

So I’ll start with her ‘Advisory Group on Economic Recovery’, but since all hope for Scotland now seems to lie in a post-Sturgeon era I will move on quickly to how early rebuilding steps can give us hope.

Let’s start with the pain…

This can’t be serious, right?

The layers upon layers of concern you should feel about Sturgeon’s economic recovery ‘strategy’ would take all of this article, but if you read the link above to George Kerevan’s analysis it’ll save me some time. I want to highlight only two aspects. And when I say ‘only’…

First, let me just repeat that Sturgeon is so clearly not governing but ‘managing PR through a process of continual reaction’. Whatever looks like it is going to give her the biggest PR headache becomes the new priority. And how does Sturgeon deal with a PR headache? She sets up a committee. She always, always sets up a committee. One a week during her reign.

I mean, even the staid and steady Fraser of Allander Institute has had enough. Setting up committees is Sturgeon’s default way of giving the impression she’s a leader. But they never come up with anything. Go on – name me a committee that resulted in anything.

The water is already above our waists and Sturgeon is setting up a pilot working group on the principles of boat building. Nae rush, FM…

But that is predictable; her choice of Convener for that group is truly shocking.

I want to start by saying that I like Benny Higgins. I worked quite closely with him when he was producing the proposal for a Scottish National Investment Bank, it was a very constructive relationship and he did a good job. He’s already been in touch with me and we’ll have a really constructive Zoom chat. Under other circumstances I’d welcome working with him again.

But it’s like the Growth Commission: Andrew Wilson is a nice guy but you just can’t appoint a commercial lobbyists to write public policy. It’s a blatant conflict of interest. Likewise you can’t ask the Chief Executive of one of the biggest landed estates in the country to lead you out of a Great Depression. No matter how good a job Benny does, he can’t avoid a conflict of interests.

It’s beyond my comprehension how this could have happened. Land reform is going to be an essential part of changing Scotland’s economy. Sturgeon has always sided with land owners over land reformers but my jaw is hanging down here.

I assumed Sturgeon’s view of a post-virus Scotland was plutocracy – quickly rebuild the wealth and security of Scotland establishment and let them take it from there. I couldn’t have imagined that she was actually toying with feudalism.

I said no good would come from the Growth Commission. I was right. I’m telling you now; not only will no good come from this, it might be the straw that breaks the camel’s back for the SNP. Party members will be disgusted, and many of us will find it impossible to vote for this party until there is change.

Unless the party membership takes control and its elected politicians demonstrate a spine, there will be real consequences.

Don’t start from administration – start from analysis, from ideology

Right, moving on swiftly and hoping to god something will finally change in Scotland, how should we get started? Let me start with a slightly unfashionable statement – you need an ideology.

Ideology is a weird subject; free market economics thinks everything else apart from itself is an ideology, which makes no sense. I’m always being told the problem with the left is ideology, like Boris Johnson’s belief that the only true universal freedom is the freedom for nations to trade with each other is – what exactly?

An ideology is just another way of saying that you have an analysis of the world, how you think it works and what you think is causing failures. Everyone has one. (In fact, everyone has many – but there’s no space to go into discourse theory here…)

Put very simply, if you don’t believe you know how it works, how can you believe you’re capable of fixing it? Ideology-free managerialism is just free market ideology in disguise.

Which means at this moment in our history you either believe that free markets can fix this (no-one really does) or you believe something else. You may believe that the free market has only one weakness – viruses. Well, viruses and financial crises. Well, viruses and financial crises and climate change. And poverty. And global inequality. Oh and war. But basically the system works.

That is one ideology. You can hear it in versions of ‘first we’ve got to get back to things exactly like they were before – and then we can change things’. But it really is as daft as it sounds – to go forwards everything must go backwards.

But other ideologies are available. In fact, I just wrote a couple of articles explaining what they are (this and this). They explain I think persuasively what went wrong and why it went wrong, and they guide us forward to how we fix them.

At the moment Scotland’s economic recovery is going to be driven by two things. At the UK level it will be ideology-central as Dominic Cummings implements his revolution. At the Scotland level, it looks likely that the Scottish Government – rather than analyse the Scottish economy and form an opinion – will just ask the vested interests what they want.

But the government of Scotland can’t just be about gift-wrapping things for the powerful. It should lead. But leading requires a direction, a direction requires a map, a map requires a destination and a destination requires a vision. That comes from an ideology, from an analysis.

This time the early choices will actually be tough

The narrative of ‘tough choices’ in politics has had two phases in my lifetime. The first was the Blair narrative – that if the left wanted nice things it was going to have to swallow a lot of things it doesn’t like. The second was George Osborne – the bank bailout necessitates shrinking government and cracking down on social security.

Here’s the thing though – for tough choices, they sound suspiciously like exactly the thing these politicians wanted to do from the start. It wasn’t the choice that was tough, it was the impact of the choice on others.

This time, the choices need to be actually tough. That means that politicians are going to have to make decisions that the powerful don’t like. These choices will be actually politically difficult for the politicians, not because they’ll be unpopular but because they’ll be unpopular with the lobby network that is so entwined with government.

Put simply, rather than saying ‘no’ to some (for them) faceless unemployed single mother or refugee, they’re going to have to look into the eyes of the people they say no to.

If the government is incapable of saying no to the powerful, it will all go wrong. But the housing lobby, the property development lobby, the retail corporations, the financial services sector and the landowners can’t get everything they want this time. Does the Scottish Government have the courage to say no?

The nature of recovery must be decided

‘A bit here, a bit there and let’s see where we get to’ is not going to cut it this time. Even worse would be to use the tools that got us here in the first place. If the Scottish Government tells us the aim is to ‘get GDP back where it was’, we’re doomed.

That’s not because GDP doesn’t need to recover. It’s because it has to recover as a result of reform and not take the place of reform.

Because the Scottish Government has a toolkit for GDP. It could give the bulk property developers another generous ‘help to buy’ subsidy for the purpose of artificially inflating house prices for the umpteenth time. It can replace the high street with Amazon. It can give the wealth managers access to Scotland’s renewable assets to get them speculating our future away again.

That’s where we’re headed – corporate monopoly, an economy dominated by rentiers, the privatisation of public assets and all the rest. That would be the default.

If we want change we must have a different set of goals. For example:

  • State clearly that Scotland is now going to do what it can to prioritise domestic productive business over corporations.
  • State clearly that the government wants to get property price inflation under control so excessive rents and mortgages don’t undermine the economy again.
  • State clearly that Scotland wants banking to be safe and boring again and that risk-takers will be allowed to fail
  • State clearly that Scotland wants to see a reduction in the volume of commercial retail and to transition away from those low-pay jobs
  • State clearly that the goal is ‘green reindustrialisation’
  • State clearly that Scotland’s recovery needs to be driven in part by land-based industries and so land reform is crucial
  • State clearly that there will be an ‘entrepreneurial state’ model working to a national industrial strategy
  • State clearly that we want more of Scotland’s economy owned in Scotland
  • State clearly that Scotland will use rebuilding to move rapidly to start a radical Green New Deal
  • State clearly that nothing in Scotland’s recovery will be allowed if it does not decrease economic inequality and poverty

Say these things out loud and we know where we are, where we’re going – and what’s not happening. Make these choices and stick to them.

Be honest

There are still people who are willing to suggest that this might all result in little more than a three per cent drop in global activity this year and that we could have a ‘v-shaped’ recovery. That’s not happening.

So it would be good to be honest – lots of businesses are not going to make it and unless things are done people are going to lose their homes, income or basic economic security. It can’t all be put back together again and letting people believe that it can is dishonest.

I have now been working intensively (with many people) on a recovery plan. It is sobering to go through how much should probably be done and realise how much probably can’t because of lack of powers, lack of resources, lack of delivery structures and more.

But there are two things above all that are sobering in the short term. The first is lack of time; some of this is going to be like propping up rain. Things are going to fall and we can’t stop it all because it’s all moving too fast. In the immediate post-lockdown period we’re going to have to make those tough choices in fast order. We can’t save everything.

The second is the lack of viable business models. I’ve thought and thought and thought and there are some business sectors I can’t work out how you could rescue. Some are fine to say goodbye to, but some are not.

Tourism for example; it may be a long time before international tourism levels get back to anything like before – if they ever do. I don’t think we should want it back like it was, but parts of Scotland’s economy are now pretty wholly dependent on it. It will be very difficult to turn that round before the pain is felt.

‘It’s all going to be fine, sort of like before’ is not honest. People appreciate honesty – and we’re going to need people to trust government.

Then decide what you can do

The period between some kind of resumption of economic activity and the Scottish elections in 2021 will whizz by. At that point it is imperative that the public gets a chance to vote against the establishment forming a ‘national unity government’. That’s why the mooted suspension of the election is so alarming.

There will be months to respond. It simply won’t be possible to do it all. Some kind of priority-setting is going to be key. Without that underpinning vision I’ve argued for above it will just be some kind of pick and mix.

If you put together the arguments above you’ll see that I’m suggesting that, effectively, you need to pick sides. And since you can’t do everything you need to do things consistent with the side you are picking.

So with limited capacity we should be returning the calls of corporations last and going nowhere near the Big Accountancy sector, focusing instead on the businesses that form the fabric of our communities.

Then it’s about powers

We’ll set out all of this in the Common Weal recovery plan, but there is little time for new powers in Scotland – but much need for them. Realistically there are only two we should go for immediately – the removal of the borrowing limit for the Scottish Government and dispensation for the National Investment Bank so it can finance rebuilding.

These can both be done with the stroke of a pen in London. We must demand it.

Then it’s about people

If you’ve done all of this, you can make a start. But from this point onwards its all about people. This needs to be delivered.

There are two immediate steps that should be taken. The first is recruitment. Right now the Scottish Government isn’t exactly filled with people familiar with this new agenda. So some big thinkers who get it should be head hunted immediately. I could pass on some names.

Then, those who are already there must be aided to ‘get with the programme’. We should set up a Transition Academy for the medium term. This should train Scotland’s public servants in the new way of working, the new strategy. Naturally this will take some time.

But immediately that Academy can make clear that the change is happening and that those not willing to make that change need to consider their positions. A rapid introduction to the new approach can be delivered to everyone.

At that point you have a chance of actually getting a grip of recovering from this crisis. Until then, it’s just more committees…

Next Up: ‘Enough of the principles, gimme some examples…’