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I RECENTLY accepted an invitation to join the Scottish government’s Advisory Council for Economic Transformation. The ambition is for a new 10-year national strategy to drive Scotland’s economic transformation as the country recovers from the coronavirus pandemic and transitions to a net-zero economy.
The fact that we require an economic transformation is beyond question. Pre-pandemic our financialised capitalist economy was already failing, with the asset-wealthier getting richer and the wage-poor getting poorer.
Low-paid precarious work is endemic, house prices and rents are rising and we do not have a fit for purpose industrial strategy.
This is not political point-scoring. Our economic problems are the consequence of failed policy by governments over decades.
Without decisive action, the impact of the pandemic will be to worsen this crisis. The necessary support for big business to protect jobs during the crisis following on from the bailout of big banks during the financial meltdown of 2010 has shown that public funds ultimately bear the risk during downturns and we cannot return to business as usual.
Central to the Scottish government’s future strategy is their welcome support for Fair Work. This must be developed beyond the ambition of smoothing out bad working practices and seek, through increasing wages, stability at work and active trade union membership, to drive sustainable economic productivity gains.
It is an inescapable fact that the smaller northern European countries to whose economic model the Scottish government aspires have higher wages and less wage inequality.
This means recognising that public spending and public procurement have a wider value than mere service or contract delivery. Creating good work, supporting local supply chains and bearing down on wage inequality foster growth and assist community wealth building.
Whilst we have applauded government for interventions to try to protect manufacturing jobs through public ownership at BiFab and Fergusons and their supportive approach for Scottish steel plating and aluminium smelting, a future transformation requires a proactive public sector that intervenes as part of a forward-looking industrial strategy to create good jobs.
These moves to public ownership in Scotland and the decision to take Scotrail back into public hands have been welcome. However, we also need an ambitious approach to address climate change and unemployment through a new plan for jobs that would involve developing profit-making public enterprises
We have identified the scale of public interventions required for a green jobs strategy to meet climate targets. We need more investment in green energy and the energy supply chain, in transport and in housing.
These three sectors account for the majority of Scotland’s greenhouse gas emissions. And whilst public-private partnerships and attracting investment in new green technologies have a key part to play, so does direct public-sector delivery.
Take construction. In Bob Wylie’s recent book Bandit Capitalism, he exposes the full scale of the corruption at the heart of the collapse of Carillion that went down with debts of more than £7bn, the loss of 3,000 jobs and a direct impact on some 75,000 working in the supply chain. Public funds should be funding decent work delivered by a publicly owned Scottish construction company.
Similarly and as the Scottish government launches a consultation on the future of our bus networks, the case for a publicly owned and regulated bus service is unanswerable.
Transport is the sector in which emissions are falling most slowly in Scotland and cheap efficient transport is fundamental to reducing car use as well as providing a lifeline for rural communities and for workers’ daily commute.
The deregulation and privatisation of bus services has been a disaster. Fares went up and routes that weren’t profitable were cut. Lothian buses proves that public-sector bus provision is the way forward.
City Mayor Andy Burnham is to bring bus services in Greater Manchester back under public control, with one integrated service to replace the dozens of private operations in a broken market. The devolved powers of the Scottish Parliament allow for even more decisive interventions if the political will exists.
Our recent report from Transition Economics also demonstrates the value in terms of jobs and climate of embarking on massive programmes of home retrofitting.
Across Scotland our trades councils are stepping up their campaigns for these programmes to be delivered by local councils, potentially providing secure employment for thousands.
Indeed, the role of local authorities generally needs to form a key part of any economic transformation. Councils have been underfunded for a decade and lack the powers to embark on vital regeneration and community wealth building.
It should be recognised that the fate of Scotland’s future economy does not lie completely in the hands of the Scottish government. The Tories at Westminster continue to refuse to extend powers to allow increased Scottish government borrowing, their capital investment programmes in green industry are dwarfed by comparator nations and their per-capita fiscal stimulus shrinks in comparison to that of Joe Biden in the US.
However, now is the time to be bold and to set out a strategy for Covid recovery and green growth anchored by a fair wage economy and driven by the public sector.
Roz Foyer is general secretary of the Scottish TUC — @RozFoyer.
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