A curious document – the Scottish government’s economic strategy

strategy coverThe Scottish government launched a new economic strategy earlier this month, although for all the coverage it’s had in the media the phrase ‘slipped out’ might be more appropriate. I’m still waiting for a serious review by economists and business leaders but, pending that, here’s my take on it.

To be blunt, it’s a curious document issued at a curious time.

I cannot believe for one moment that it’s a serious attempt to plan the economic future of Scotland. The foreword by the first minister inadvertently suggests why this is. She rightly identifies working in partnership as crucial to success. But by partners she means

the wider public sector in Scotland, the third sector, trade unions, businesses and communities (p. 5).

This is such a woeful misunderstanding of what drives economic success as to be laughable.

First, the ‘wider public sector’ in Scotland includes essentially two types of organisation – councils and others. ‘Others’ are basically the agencies of the Scottish government itself and although many have an impact on local economies they are neither drivers of greater prosperity nor ‘partners.’ Councils have a role to play but as time has gone on they are more and more the handmaidens of their prime funder, again the Scottish government. Moreover, their government funding has fallen in real terms by 8.5% since 2011 with much more to come. And like the government itself they can only be enablers of economic development, not the key drivers.

Second, the third sector, trade unions and communities will not drive greater prosperity. The third sector depends for most of its funding on government, the trade unions are there to protect workers’ rights, and the concept of ‘communities’ in this context is so amorphous as to be worthless.

Lastly, you’ll notice ‘businesses’ tucked in the middle of the first minister’s list of partners. Not ‘industry’ or representative business organisations, just businesses. Well that’s all right then, sandwiched as engines of economic prosperity between trade unions and communities.

What’s equally strange about this list for a serious economic strategy is the absence of other partners, especially the UK government. In 82 pages, the UK government gets only 14 mentions, 11 of them negative (mostly around reserved powers and supposed adverse impact of UK policies on Scotland), 2 arguably positive (Glasgow and Clyde Valley City Deal, additional Smith Commission powers) and one neutral. Not once does the strategy say ‘We acknowledge our respective roles and will work positively in partnership with the UK government for the benefit of Scotland.’

At a more detailed level, the UK government’s department best able to support economic development – business, innovation and skills – receives no mention at all. Exports will not be driven with the help of the UK government but through an ‘International Framework’ that will

engage externally to promote Scotland – its economy and broader interests (p. 9).

This is not about economic development but about the well-established SNP agenda of easing Scotland away from the UK and trying to run their own foreign policy when it’s not a devolved function.

I said this new economic strategy was issued ‘at a curious time.’ The Scottish government already had an economic strategy, issued in 2011. It’s still on their web site. I have seen no proper evaluation of its success, but why replace it with a new strategy a mere 14 months away from a Scottish parliamentary election? With all the ‘t’s to be crossed and ‘i’s to be dotted there’s scarcely time to publish the various follow-up documents promised, let alone allocate resources and deliver any real changes. What’s it all about?

Here’s my guess.

We have a new first minister. She needs to make her mark quickly. In particular, she needs to differentiate herself from her predecessor, a trained economist who successfully or not majored on his understanding of matters economic. She also needs to respond to what the SNP have come to see as their major new constituency post-referendum – the urban poor of the west of Scotland and Dundee. What better way to do it than a quick nod in the direction of a new economic strategy that also says it’s about reducing inequality and creating a fairer society (what political policy isn’t?).

A final curiosity of the strategy is an infographic (p. 15 – see below) entitled ‘A closer look at Scotland.’ It paints an optimistic picture of Scotland’s economy as it already is – as part of the United Kingdom. Of course, the first minister claims that these sorts of achievements are ‘a result of actions we have taken’ (p. 4) even though ‘the key powers to support businesses, to shape the economic structure of the economy [sic] and reduce inequality remain reserved to the UK Government’ (p. 78). You can’t have it both ways. But as so often in their dealings this is precisely what the SNP want to do with this flawed document.

closer look at scotland

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