Robin McAlpine: Scotland's number one embarrassment? Our economic debate

CommonSpace columnist and Common Weal director Robin McAlpine appeals for a more dynamic debate about Scotland’s economic future

I WAS very honoured to be asked by the Coalfields Regeneration Trust (CRT) to talk at the launch of the Longannet regeneration plan recently. The plan was devised by the communities around the Longannet power station to tackle the economic trauma of the closure of the major economic player in the area.

But once again it highlighted for me the real problem with the economic debate in Scotland. And that's that its rubbish.

Because it's been an emotional rollercoaster of a ride for people in the Longannet area. The last deep coal mining jobs in Scotland were lost from that part of Fife a bit over a decade ago and earlier this year the power station closed down.

The potential economic impacts on the local area of losing by far its biggest single employer are clearly worrying with many local supply chain businesses (for example bed and breakfast accommodation, local newsagents and community pubs) now severely struggling.

But then came along the wonderful news that thousands upon thousands of jobs are about to flood into Scotland because of the go-ahead for a new runway at Heathrow. A mere five or ten percent of the promised jobs bonanza will virtually replace all the jobs being lost in the power plant. Locals were ecstatic.

Their enthusiasm wasn't to last. Just when they thought their troubles were over, they hear the shocking news that a Chinese multinational firm which was literally going to throw money at Scotland out of sheer benevolence has fallen through because some idiot somewhere wanted a little bit of detail about exactly who was getting what out of the deal.

“The loss of the Chinese gold rush has offset the utterly unbelievable (literally) Heathrow gold rush.”

Suddenly the loss of the Chinese gold rush has offset the utterly unbelievable (literally) Heathrow gold rush (incidentally, also a Chinese venture). The people of the Kincardine area and beyond, for many years proud of an economy that was built from their own labour, are now to be saved or damned on the whim of Chinese multinational corporations.

And this utter, utter garbage is what passes for economic debate in Scotland.

I find the Heathrow nonsense particularly egregious. When the Scottish Government announces that 16,000 jobs are coming to Scotland (that's over ten times as big as the biggest industrial employer in the whole country), I assume that they didn't just parrot a piece of commercial propaganda but rather pursued proper protocol and commissioned a serious independent evaluation of the likely economic impact on Scotland.

Which is scary because that means that the Scottish Government has the phone number of an economist who actually believes that Heathrow is going to bring half as many more jobs to Scotland as the entire offshore oil industry.

You’d think we were some kind of branch economy so reliant on the city of London that their airport is make or break for us.

“You’d think we were some kind of branch economy so reliant on the city of London that their airport is make or break for us.”

(And what is so amazing about the Scotland-Heathrow economic miracle is just how easy it was to achieve. To gain as many jobs as there are police officers in the whole country, all the SNP had to do was accept lots of money from Heathrow's lobbyists. You can't argue with that for efficient government.)

So the Heathrow nonsense might well give you some democratic worries, but it is the lack of any kind of serious debate about the China Railway No. 3 Engineering Group deal that should worry you most.

It's not that I have any reason to believe it's dodgy or has been handled incorrectly. It's not even that the company concerned has a worrying record on human rights and possibly fraud (unlike every other multinational). It's that the whole thing seems economically illiterate to me.

Because CR3 isn't coming here to invest in a new industry sector which has a chance of growing and becoming a sustainable long-term job creator in Scotland – this is not a Silicon Glen moment.

Nope, CR3 has its greedy eyes on stuff that Scotland is going to have to do anyway to see if the economic benefit of those things can't be captured for Chinese investors instead of the Scottish public.

“Funding mass house building or renewable energy in Scotland, by Scotland, for Scotland is straightforward.”

Because it's telling that this 'investment' is being mooted for virtually zero-risk areas such as social housing and renewable energy. These are both guaranteed income streams. The only risks would be something like the population of Scotland collapsing to a level where we don't need any more houses or the imminent discovery of a magical new energy source which will make renewables redundant.

They seem like low risks to me – the only kind global predatory financial capitalism is interested in these days.

To be clear, funding mass house building or renewable energy in Scotland, by Scotland, for Scotland is straightforward. They all return not only their capital value but clear profits. We can keep those profits in Scotland by funding these ourselves or we can gift the profits to China instead. Entirely our decision.

And the funding would be easy to find. One of the major focuses of Common Weal's policy work over the last year and a half (working with the New Economics Foundation and Friends of the Earth) has been to develop rock-solid and easily achievable proposals for a Scottish National Investment Bank (case here, details here).

That bank could have created the £10bn 'investment' coming from China without difficulty, with all the benefits being for Scotland. Unfortunately the Scottish Government has rejected out of hand our proposal (also rejecting a request to meet and discuss it).

The desperation to send our wealth to China can only be explained either by the power of undue commercial lobbying or because the Scottish Government is pursuing the Osborne strategy of selling off national assets to the Chinese to try and make it look like an 'export' (so the balance of trade doesn't look quite so bad).

“The desperation to send our wealth to China can only be explained either by the power of undue commercial lobbying.”

So where's the debate? Where's the discussion? Almost everywhere else in the developed world senior economists both of the right and the left are now in a serious examination of the ways globalisation failed politically, environmentally and – in many regards – economically.

But in Scotland? We have few academic economists and not many of them are interested in the Scottish economy. We have almost no major economic commentators or journalists. Overworked news reporters treat this issue as Willie Rennie's press release versus Keith Brown's press release. Anti-fraud and human rights campaigners raise questions about the company. That's yer lot.

Whether it’s the ongoing multinational corporation love-in, the susceptibility to Chinese lobbying, the apparent disinterest in indigenous industry or the utter failure to make connections between 'free market economics' and rising global inequality (including in Scotland), the Scottish political debate is both embarrassing and more than a decade out of date.

I'm afraid that Scotland rewards people for saying what everyone else used to say and for doing what everyone else used to do. To my eyes the SNP's economic strategy has a couple of new buzzwords but is fundamentally unchanged from Jack McConnell's economic strategy. Sturgeon even announced at her party's conference that she was going effectively to reinstitute McConnell's 'Friends of Scotland' scheme (as if it failing once wasn't enough).

Meanwhile, back in the shadow of a dormant Longannet, all this stuff feels like satire. And believe me, every unemployed miner, every former pub landlord, every collapsing local business – they all have a better economic analysis than this.

“I'm afraid that Scotland rewards people for saying what everyone else used to say and for doing what everyone else used to do.”

In the question session at the report launch, the issues raised were the lack of sustainable finance for community enterprises (if only we had a national investment bank), the failure of anyone to do anything about public procurement (corporations like shutting small businesses out of public contracts and government administrators are inexplicably delighted to comply), the irrelevance of building a bunch of new industrial units with no businesses to go in them and so on.

One proposal was raised – a serious, technically competent proposal to use heat exchangers which would use the flooded mines to heat massive greenhouses which could make Scotland self-sufficient in tomatoes and create real, productive, sustainable jobs in the area built on a real resource advantage.

In Scotland? You're kidding. Creativity and moving forward plays no part in our national economic debate. Why should it? We have 16,000 jobs almost literally falling out of the London air.

Remember, Heathrow is just next door, China a short hop from there. Longannet? Miles and miles away. Just keep saying 'the foundations of the economy are sound' as you fall into a deep sleep and hope it gets better when you wake.

Picture: CommonSpace

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Comments

jaydeeess

Thu, 12/08/2016 - 19:35

OMG!

Alisdair McKay

Thu, 12/08/2016 - 23:46

I'm not an economist or annalist of any sort and even I wondered why we would encourage investment from abroad to take our safest projects on. I assumed I'd missed something. That's very worrying.

Dunnzer

Fri, 12/09/2016 - 01:47

Menie Estate mentality.

Isembard

Fri, 12/09/2016 - 11:12

Economic debate in Scotland is in the same state as any other country - full of mainstream economic misinformation and neo-liberal bias. No surprise there.
Concerning your comments about the Heathrow announcement, I note that the Scot. Gov. announcement that repeats the claims of London Heathrow Airport actually says "...up to 16,000 jobs". The "up to" weasel words are always significant.
This isn't economics, it's commercial bragging and politics.

ChristieWilliamson

Mon, 12/19/2016 - 14:29

Absolutely spot on Robin. I was at the SNIB report launch at Idea Space, and I'm saddened that ScotGov won't even sit down and talk about it. I wish I could say I was surprised.

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