Scotland must get serious about businesses and the economy

Among the depressingly familiar narrative about how terrible things are, how badly this or that policy is, and the challenge of disentangling Scottish politics from the plot of a gripping TV drama, the past few months have seen a change in the way our politicians approach the economy and businesses.

We’ve seen an open acknowledgement by the Scottish Government that it needs to reset its relationship with the business community – symbolised by the launch of its New Deal for Business Group. Ostensibly a forum to feed into the policymaking machine, but perhaps also a means to test out ideas in development ahead of their launch.

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This may reflect some degree of learning from recent experience in progressing policies despite businesses raising a series of sustained, often practical, concerns about them. That these policies have been paused, rethought, or shelved, including with respect to alcohol advertising, recycling, and Highly Protected Marine Areas (HPMA), is to be welcomed. Each had laudable intentions, but each was also subject to criticism for their design and planned implementation.

Time will tell whether the “New Deal” has a tangible impact on policy development, but the risk is of history repeating itself, with glossy documents being produced but nothing substantive changing. The bookshelves of St Andrew’s House are crammed with the output of the many similarly constituted bodies that have been convened over the past 20-plus years that fit this description.

Many of these provided forums for consultation on the broad principles that a government was advancing rather than working to develop and deliver new ideas.

It shouldn’t need to be said, but elections are where governments consult on their broad principles.

In June, the Scottish Government launched yet another new advisory group. This time a “Tax Advisory Group” which will “discuss the tax system as a whole and identify opportunities for broader public engagement”. Well-meaning as this initiative is, it’s not clear why it is needed.

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What new analytical input or advice will this group provide that isn’t available to ministers from their own civil servants? Isn’t this already produced by the Scottish Fiscal Commission? And how does its advice on tax policy engage with the work of the New Deal for Business Group? Or that of the National Strategy for Economic Transformation Delivery Board, which exists in this same policy space?
In its eagerness to show that it is taking these issues seriously again, the Scottish Government is in danger of its own advisory groups tripping over each other.

Outside of government, there has been a concerted effort from the only other political party that could conceivably lead the next Scottish Government to engage with the business community, earn its trust, and build relationships with business leaders.

Again, time will tell whether this leads to the development of innovative economic policies, but it is notable that the economy and businesses once again have the attention of both the SNP and the Labour Party. The Conservative Party – the traditional pro-business party – has become distracted by a whole series of wider social issues.

The Scottish Government will spend the summer, informed by its many advisory bodies, developing a new Programme for Government, and how it approaches that task will reveal how serious it is about tackling some of those weaknesses evident in recent policymaking. 

I’m optimistic that there are good ideas from across the political spectrum, and that businesses and individuals stand ready to help deliver these – but can the machinery of government be aligned to competently put these into practice? We’ll have to wait and see.

Stuart McIntyre is Professor of Economics at the University of Strathclyde.