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Does the Economy Committee have the answers?

Aidan Reid

With a major overhaul of the Economy portfolio and a number of new ministers to the brief, will last week’s Economy, Jobs & Fair Work Committee report on Scotland’s economic performance provide them clear ideas as to how to improve the economy?

It is difficult to get MSPs from opposite parties to agree on a lot of issues. While stated intentions of the “something must be done” formulation receive natural nods of the head, matters more open to interpretation or party-political powerplays generally lead to party lines being drawn and absolutism dominating the discourse. That perhaps is the genius of parliamentary committees, where MSPs of all stripes are to hold a common purpose on scrutinising their set portfolio. To an extent this gets undermined by the occasional politicised interventions when questioning witnesses, but it does mean that when controversial subjects are broached, conclusions from their inquiries generally come with the seal of cross-party approval. This approval, which was given by the members of the Economy, Jobs & Fair Work Committee to its report on Scotland’s economic performance, gives it potency in an already crowded marketplace of commentary.

Since the much-awaited Sustainable Growth Commission’s report came out, the focus on Scotland’s current and future economic prospectus has been incessant. It has been the opposition’s contention that all is not well, and that the blame for this falls squarely on the shoulders of the Scottish Government. In contrast, the report’s efforts to highlight significant regional disparities across the UK in terms of immigration and economic investment is cited in response by those in favour of independence to emphasise economic malaise results from structural UK inequalities. These narratives are repeated with every monthly employment statistics publication or quarterly GDP update. Therefore, a general consideration of where we are now and whether it is in line with expectations would from the outset appear to offer a chance to cut through politicised arguments and offer a perspective on what is not working and what can be done.

The report’s potential to cut through has increased with yesterday’s Cabinet reshuffle. With Keith Brown losing his Cabinet position, his Economy brief has been largely subsumed by Derek Mackay, with Jamie Hepburn, Kate Forbes and Ivan McKee taking up economy and business-related ministerial posts. With new personnel comes the potential for significant changes to policy, which could be guided by the recommendations of the Committee’s report.

In terms of problems identified, this report largely succeeds in offering a clear-eyed view. A “fear of heights” is identified for SMEs who make up the backbone of Scotland’s economy, with more specialised support for businesses in development from small to medium to large called for. In addition, efforts to identify ways to boost sectors which suffer from low productivity reflects the proactive agenda which is the basis of the report. By taking a wholesale approach which does not reduce sectors to a list of winners and losers it also seeks to challenge assumptions of the central regions providing growth and other areas hanging on to their coattails. The opportunity of a South of Scotland Enterprise Agency is seen as a key opportunity to address this.

There are also clear suggestions made by the Committee which would, if adopted, impact Government policy. This includes targets for more employee-owned businesses, which the Committee identified as having “huge potential”. Efforts to support SMEs through public procurement contracts are also advocated for and are likely to be well received. There is also a tie-in with previous Committee work during discussions on the impact of the gender pay gap on Scotland’s economy. The potential boost which could be unlocked through enabling underrepresented demographics in the workplace to fulfil their economic potential is a wider theme within the report, with BME and disabled people’s access to apprenticeships cited as a concern.

Despite these policy ideas though, if you were to base the report purely on its final recommendations, “clarity” would be the assumed message. Clarity on inclusive growth, for which it seeks a definition embeded into the objectives of the enterprise and skills agencies. Clarity on how Scotland’s economic strategy may be achieved, with demands for an action plan and a clear monitoring framework that establishes performance indicators. Clarity on the role of skills and enterprise agencies within the strategy. While an action plan may provide a basis for economic improvement, the lack of specificity on how it may be formulated means these recommendations fall down somewhat due to their passiveness.

The more radical and focused policy recommendations dotted throughout the report are therefore welcome, but it is debateable whether the final recommendations take these on and offer clear ways in which to improve Scotland’s economy.

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