“A missed opportunity,” says one business leader. “Too vague, too bland, and too long,” according to another. These are not the reviews that Benny Higgins, the man charged by the Scottish government with producing a plan to revive the economy, will have been looking for. “It’s quite political, isn’t it?” says another CEO of the report published on 22 June.
Higgins, a former senior RBS and Tesco banker, has in recent years become something of a bridge between Scotland’s government and its business community. He is the go-to guy when Nicola Sturgeon is seeking a credible, respected private-sector figure to chair this or helm that. Highly charismatic and fiercely intelligent, Higgins has produced the Glaswegian equivalent of a judge-led inquiry.
Indeed, this week’s report would have done a judge justice. Its 76 pages lack a reader-friendly executive summary and cover almost every facet of the economy. Towards a robust, resilient wellbeing economy for Scotland is as unwieldy as its name.
Critics make the point that length and breadth are not the same as efficacy. At times the report reads as if it has been written by the civil servants it was intended to challenge. Its mouthful of a title surely hints at political pressures being juggled – no debate about the economy in Scotland can avoid tipping its hat to the issues of wellbeing and “inclusive growth”. If you want the First Minister to listen, you must talk the language of social justice.
A demand for a “fresh start” between ministers and business leaders, who have a relationship that verges on toxic, is as close as Higgins sails to confrontation. Scotland’s political debate is dominated by vested interests in the public sector, even though 70 per cent of its citizens work in the private sector. Those who would like to have seen Higgins defy economic taboos or attempt to unleash the animal spirits of business were disappointed. He told reporters: “This is not a time to start up new things but to make the most of what we have got.” But one CEO counters: “The problem is, what we’ve got may not be what we need.”
Recommendations included a guarantee of two years’ work, paid at the real living wage, for those aged 16-25; greater involvement of private-sector leaders in government economic decision-making; reforms to the UK fiscal framework, which underpins Scotland’s economic relationship with Westminster; the purchase of government stakes to save important companies under threat; and a step change in the provision of digital infrastructure.
These proposals are not unwelcome. The reality of the immediate economic future for Scotland is grim. Research for the report found that a fifth of the economy has been shut down by Covid-19, affecting 900,000 jobs and over one third of the business base.
[See also: How pandemics extinguished the Roman empire]
GDP is provisionally estimated to have fallen by 18.9 per cent in real terms during April, after a fall of 5 per cent in March. The output of the accommodation and food services sector is down by 85 per cent over the past two months, while arts, culture and recreation services are down by 51 per cent. Online job postings in April were 54 per cent lower than this time last year. It’s predicted that unemployment could reach 10 per cent later in 2020.
But there was unhappiness that the emergency jump leads remained firmly in the toolbox. Ewan MacDonald-Russell, head of policy at the Scottish Retail Consortium, said: “What is urgently needed are policies to pull Scotland out of its current economic nosedive. Short-term economic stimulus and immediate support for hard-pressed consumers over the next six to 12 months will make it easier to retain consumer-facing sectors and therefore build a sustainable long-term economic recovery.”
Some commentators drew a contrast with an Alistair Darling-backed report from Policy Exchange, also issued yesterday, which called for emergency tax cuts including the reduction of VAT from 20 per cent to 15 per cent, and a focus on small, local, shovel-ready projects.
Policies adopted by Westminster will of course have an impact north of the border, but the brutal realities of the post-Covid-19 era are a fascinating test of how 21st-century devolved Scotland responds when its back is to the wall. Are our politicians up to the moment? Are we?