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Economic Recovery Final Report – Common Weal Response

Overview —

The Report of the Advisory Group on Economic Recovery has now been published. A large part of it is based on the economic agenda that Common Weal has been developing for six years and there is certainly much in its aspirations to welcome. However, it is also dominated by the assumption that the kind of future Common Weal has envisaged can be achieved by doing almost exactly the same things we’ve been doing since devolution.

Credits—

Common Weal

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There is a very big gap between the aspiration and the information contained on how to achieve it; the level of detail contained in the recommendations means it is generally impossible to envisage what is actually proposed. The vast majority of it seems to be to propose to do the same thing we were doing before – but a little faster. In places it seems unrealistic in its timescales – if something can’t be achieved in the next three or four years it can hardly be called recovery. There are no costings in this report and, other than requesting an increase in borrowing powers, little to explain how it will be paid for. There is almost no mention of increasing levels of manufacture in Scotland, no mention of domestic ownership of the economy and a rather depressing focus on Foreign Direct Investment – despite decades of negative experiences of it in Scotland.

You can call something resilient but that doesn’t make it resilient. You can talk about wellbeing at great length and it will do little to improve wellbeing. You can keep doing more of the same but you then need to explain how it will result in a different outcome ‘this time’. And if you believe that the only issue with Scotland’s economy is the harm caused by the virus and that a return to something like the status quo is your aim (but with renewable energy), you can’t claim it as resilience or wellbeing.

Common Weal’s approach was systematic; we identified what is wrong with the economy, explained the factors which caused the problems, outlined the alternatives and explained what to do to get there from here. This report believes that ‘steady as she goes’ will get us to the same place. Common Weal has severe doubts that that is credible.

This document is an initial response from Common Weal to the report’s recommendations.

KEY POINTS

― Scotland’s borrowing powers should be greatly expanded immediately but it should be done as part of wider and permanent structural reform not as a temporary emergency measure.

― The recovery should be investment-led and based on a solid rejection of “Austerity” politics

― The recovery must be democratic with community wealth building led by and for the communities in question, not imposed on them from above.

― The Recovery Group’s model of setting up “blind trusts” to manage bailed out companies is unwise. Where bailouts are unavoidable, the Scottish Government should take public equity stakes in the companies and use that stake to further broader strategic goals.

― The Scottish Government’s reliance on “Foreign Direct Investment” will inevitably result in even more of the profits generated in Scotland being shipped overseas. This should be avoided.

― The Recovery Group is correct in demanding conditionality on grants and loans. Common Weal favours demanding the same public good conditions being applied to companies in receipt of public money (in every day procurement as well as emergency Covid recovery) as is applied to “in house” public bodies.

― Many other shortcomings of the report are identified such as the majority of recommendations able to be summarised as “the Scottish Government should continue to do…” rather than demanding real, strategic change. If anyone expects that doing the same as before or doing it a little bit faster will create radically different outcomes from the failing economy we had pre-pandemic, it won’t.

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