Charting a Just and Sustainable Recovery for Scotland: A Plan for Scotland’s Programme for Government

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Charting a Just and Sustainable Recovery for Scotland: A Plan for Scotland’s Programme for Government

Executive Summary

The public health crisis has exposed fractures in our economy that long predate the pandemic. While the virus itself may not discriminate, our economy does, and those who were already vulnerable are disproportionately shouldering its cost. Even prior to the crisis, after a decade of austerity across the UK, we faced years of lost wages for workers, stagnating living standards, declining investment, soaring levels of hunger, and rising child poverty. These challenges have mounted while Brexit poses a wave of fresh economic anxieties for Scotland’s economy.

The climate emergency changes everything. While Covid-19 is the immediate focus, climate breakdown and biodiversity loss remains the single biggest threat facing our future. Inherently linked to soaring inequality, the causes and distributional impacts of the climate crisis are unevenly felt, with those contributing the least to the crisis disproportionately paying the price for it.

Moving forward on Scotland’s path to recovery will prove challenging and require bold action, as we navigate this multitude of intertwined crises. Out of this crisis, a new economic vision is needed to build a more equitable, sustainable, and democratic system. As the Scottish Government prepares to set out its Programme for Government, how it chooses to respond to this crisis at this critical juncture will not only shape the nature of the economic recovery – it will also be a key indicator of Scotland’s willingness to chart a different course. In the absence of a large fiscal stimulus package at Westminster, which we recommend, and without greater borrowing powers, we recognise there are limitations on the ability to introduce all of these policies at once. While our aim is to set out proposals for a bold recovery strategy as part of the upcoming Programme for Government, transforming Scotland's economy is an ongoing process and in practice such a policy agenda would need to be phased in over time. As well as identifying some key priorities for public spending, the paper also sets out a range of policies that would not require any upfront investment, and could therefore be introduced without any budget implications.

To that end, in this report we identify key policies that could be introduced under the present devolved settlement to democratise our economy, build community wealth, create decent jobs, and support the just transition for a sustainable future for all as the first step in building a new economic consensus. Our recommendations are summarised as follows:

A Green and Just Recovery

To secure a sustainable future, Scotland needs a raft of well paid, secure, green employment opportunities. We recommend that the Scottish Job Guarantee is designed to provide well paid employment opportunities in the public sector to anyone who needs it to create good quality jobs that are paid at least the real Living Wage rate. These jobs could focus on priorities such as decarbonising the housing stock, building a new generation of social housing, supporting afforestation and restoring peatlands.

The Scottish Government has recently taken the step of joining the Wellbeing Economy Governments partnership. To transform our economy to deliver wellbeing, a Green New Deal needs to break from a model of unsustainable forms of production and consumption. The Scottish Parliament does not currently have the power to oversee a managed phase out oil and gas extraction, but should support this and back a just transition for workers and communities; rapidly expand renewable energy generation, prioritise local job creation; give the Publicly Owned Energy Company a mandate to invest in renewable generation as well as energy supply; expand Scotland’s housing retrofitting programme; and introduce a series of tax changes aimed at supporting climate and economic justice, such as a Frequent Flyer Levy.

Expanding Community Wealth Building

The concentrated ownership of wealth and power designed into our economy strips workers and communities of the wealth they create in common. We therefore recommend a Community Wealth Building Act to support an economic strategy that transfers financial and physical assets to local communities and redirects wealth, control and benefits to local economies. This Act should be built on the following key pillars to secure a democratic economy: Pluralist models of business ownership, making financial power work for local places, fair employment and just labour markets, progressive procurement of goods and services, and socially just use of land and property.

Banking for the Public Good: The Scottish National Investment Bank

The establishment of the Scottish National Investment Bank (SNIB) is a considerable achievement. In order to meet its potential, it must be structured and governed effectively. We therefore recommend that the composition of its Board is reviewed to include at least one Minister, one trade union representative, one local authority representative and two representatives from civil society – and that the number of Board members from the private sector is capped at one-third. We also recommend that the proposed Advisory Group is replaced with three ‘Mission Boards’ corresponding to each of the SNIB’s missions. Investing in the development of in-house capacity to invest directly in the economy, rather than relying on consultants or private sector intermediaries, will be key.

Further, we recommend that a new holding company arm of the SNIB is established and tasked with purchasing equity stakes in distressed but otherwise viable Scottish businesses that meet defined criteria, helping them to stay solvent throughout the Covid-19 crisis.

Tenant Protection and Social Housing

In recent years the Scottish Parliament has made significant progress towards enhancing security of tenure in the private rented sector. However, rents in Scotland remain high and continue to increase faster than many households can afford, constraining living standards. We recommend that the Scottish Government introduces an immediate rent freeze to ensure that tenants will not face rent increases during a time of profound uncertainty and hardship; introduces a system of rent controls to commence after the rent freeze period ends; supports an increase in social house building to secure homes for all and create jobs; and encourages local authorities to explore opportunities to purchase properties made vacant by Covid-19 to repurpose them as part of the social housing stock.

Securing Democratic Public Ownership

Over the last four decades, privatisation has been a prominent component of the UK’s unequal and extractive economic model. Scotland has taken important steps to break with privatisation, but there remains a need to harness this by shifting our understanding of this approach, from a patchwork of decent individual policies and towards a strategy to integrate democratic public ownership at the heart of a comprehensive, planned transition to a new economy with wellbeing at its core.

Stewarding Land

Land reform has been one of the crowning achievements of the Scottish Parliament. However, land reform should not be viewed as a one-off event but rather an ongoing process. We recommend the establishment of a new, democratically accountable ‘Scottish Land Development Agency’ with the power to purchase, develop and sell land and ensure that this key resource is being managed strategically in the public interest. Furthermore, while Community Right to Buy continues to be an important mechanism for diversifying landownership in Scotland, high land prices remain a barrier. We therefore recommend that the Scottish Government introduces an upper limit on the total amount of land in Scotland that can be held by a private landowner or beneficial interest; strengthens Community Right to Buy powers to enable communities to acquire land at below market values; and grants local authorities the legal power to issue Compulsory Sale Orders. We also recommend that a new Common Good (Scotland) Act is introduced to provide a new statutory framework to modernise Scotland’s unique system of Common Good property.

Full Text
Charting a Just and Sustainable Recovery for Scotland: A Plan for Scotland’s Programme for Government