THE global coronavirus pandemic has become very personal. Many of us, myself included, have lost friends and family to it.
That’s why the absolute priority for all in power across the globe at this time must be to protect lives and minimise the damage that this virus will cause. The idea that we consider lifting the lockdown for reasons of commerce, before we are sure we are way past the peak of the virus, a vaccine has been developed and widespread testing, tracing and tracking is delivered must be firmly rejected.
The lockdown has forced some rethinking about public health, but also about the economy. The first budget from the new Chancellor Rishi Sunak was awash with borrowing and spending promises that would have been considered heretical by the Tories mere months previously. Beyond that, state intervention in the economy, abhorred by the Tories at Westminster and used as a begrudging last resort by the SNP at Holyrood has returned. For too long the economic strategy of UK and Scottish governments has been confined to a narrow, market-orientated horizon. The scale of this crisis and the threat it poses to the livelihoods of so many demands that this horizon is rethought. This is not a time for tinkering around the edges - this is a time for real change.
Last week the Scottish Government published their “State of the Economy” report. According to the report the Scottish economy will face a collapse in output of some 12 per cent, a crash unparalleled in recent history and twice that inflicted by the 2008 financial crisis. The week before the Office for Budget Responsibility warned that UK GDP will drop by 35 per cent and unemployment could rise by two million by the summer. This should leave no one under any illusion about the scale of the challenge we face.
So while emergency relief for businesses and workers is welcome, we also need an economic plan as part of a new social contract with trade unions and employers. The last few weeks have shown the potential for change, the importance of co-operation but also the deep-seated inequalities which are a feature of our economy. Which is why restarting the old economy and relying on the market just will not work. Returning to the old ways of working, the old injustices, the old unfair distribution of economic power and prosperity, the old balance between the public and the private sector, and the old employment insecurities cannot form the foundations of the new economics we need to build.
The magnitude of the change required is huge but it is the only way to restore economic confidence. In practical terms it means understanding that manufacturing is critical and greater self-sufficiency in a more diverse economy is essential. The PPE crisis is just one reminder of why this matters. It means an extended role for local government in the direct provision of services like care for the elderly, and new investment in the pay and conditions of those whho provide it. That means an end to austerity, and radical new thinking like the creation of a Scottish Care Service to go along with a fully funded National Health Service. Across the public sector we must see procurement used for community wealth building, rather than to fuel the profits of a few global corporations. It means a significant increase in the resources of the Scottish National Investment Bank as part of a wider industrial strategy to grow indigenous businesses, not as part of a case by case rescue service, or simply in response to market failure, but as part of a proactive way of working with unions and employers in the planned development of our economic base. It means harnessing the expertise in our higher and further education institutions, but it means harnessing the expertise of workers in the workplace too in new forms of economic democracy. And it means a new spirit of determination after the lockdown to re-prioritise workers’ rights, health and safety at work, end the low pay long working hours culture, stamp out zero- hours contracts and the gig economy and to apply solutions which reduce our carbon emissions.
With interest rates now at a record low, monetary policy has run out of road. The Fiscal Commission has stated it is incredibly difficult to forecast weeks ahead, let alone years. But what is certain is that we cannot afford another decade of austerity and that will mean exploring options like a wealth tax and taking much tougher action to clampdown on the current industrial scale of tax avoidance and evasion.
Active state intervention is needed to support ailing companies and provide a helping hand to workers in times of trouble. As time wares on it will become necessary for government to take a leading role in re-structuring our economy alongside business and trade unions. Economic planning is going to be essential if we are to restart and reform our economy, and to tackle inefficiency, waste and exploitation.
We will get through this crisis. But we must ensure we get through this together and no one is left behind.
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