Professional Documents
Culture Documents
Stephen Boyd
June 2011
www.oxfam.org.uk
About the author
Stephen Boyd is an Assistant Secretary at the Scottish Trades Union Congress
(STUC) with responsibility for economic and industrial policy, utilities, transport,
the environment, and arts and culture. He serves on a number of Scottish
Government working groups including the First Ministers Energy Advisory
Board. Stephen has worked with the STUC since 2003.
Email: G.C.Mooney@open.ac.uk
Whose Economy Seminar Papers are a follow up to the series of seminars held in
Scotland between November 2010 and March 2011. They are written to contribute to public
debate and to invite feedback on development and policy issues. These papers are work in
progress documents, and do not necessarily constitute final publications or reflect Oxfam
policy positions. The views and recommendations expressed are those of the author and not
necessarily those of Oxfam. For more information, or to comment on this paper, email
ktrebeck@oxfam.org.uk
Introduction .............................................................................................. 4
2. Opportunities ..................................................................................... 5
Notes ....................................................................................................... 10
Introduction
Scotland, a small, comparatively wealthy nation on Europes periphery, has left a
mark on the world economy out of all proportion to its size. The Scottish
Enlightenment provided much of the intellectual foundations on which modern
democracies and economies were built; the pioneering of public education
Scotland was the worlds first literate nation had a palpable economic as well
as social payoff. This included the engineering prowess exported to all parts of
the world and the capacity for innovation the spirit of invention that led to
so many iconic and transformative products and technologies being developed
within Scotlands shores. It is no exaggeration to describe the Scotland of the
early twentieth century as an industrial superpower.
A decline in the mid part of the last century can be explained by over-
specialisation in heavy industry and failure to diversify into lighter consumer-
based industries. High levels of outward migration were witnessed, as decent
work opportunities grew scarcer with the decline of heavy industry. From the
1960s onwards, regional policy, inward investment, North Sea oil and the growth
of financial services at least partially arrested the decline.
2. Opportunities
The challenges are profound, but there is little doubt that the Scottish economy
has significant opportunities, even as it continues to struggle out of recession. As
mentioned above, Scotland retains strong comparative advantage in a number of
areas: financial services, energy, life sciences, tourism, food and drink, health
services and education services. Although manufacturing employment has
declined precipitously over the past 30 years, a number of sub-sectors such as
aerospace, defence, and marine and advanced engineering continue to perform
well in competitive global markets. Scotlands natural environment, research
base and the strong political commitment expressed in the Climate Change
Scotland Act (2009) have combined to create massive opportunity in a range of
low-carbon industries. The industrial and employment benefits of developing
onshore and offshore renewable energy technologies is generally well
understood; less so are opportunities in areas such as improvement of the built
environment, and data storage and processing.
Since the 1970s, in common with the UK, the proceeds of economic growth in
Scotland have been increasingly narrowly shared; too few quality jobs have been
created; policy development and implementation is increasingly the province of
business (usually financial) and government elites, with other economic
stakeholders relegated to marginal status; and 30 years of weak and irrelevant
supply side interventions, such as deregulation of product and labour markets,
have consigned communities to worklessness, undermined productive industry
and weakened final demand. Far-reaching reform is necessary if Scottish
Government targets on growth, productivity, solidarity and cohesion are to be
achieved. As things stand, both the policy framework and the theory that
underpins it are not up to the challenge.
4. Pervasive myths
Since devolution, debate over Scotlands economic future has been narrow
dominated by a few shrill voices, and a no-go area for most of Scotlands citizens
and their civic representatives. Recurring themes routinely expressed through
the interventions of employer organisations, the Scottish think-tank community,
media commentators and too many politicians are that the public sector is too
big and necessarily crowds out more productive private sector activity and jobs;
that Scotland is over-regulated and over-taxed and is therefore not a good place
to do business; and that proactive industrial policy will necessarily do more harm
than good.
The global financial crisis of 2008 blew away many of the orthodoxies
(particularly around deregulation and the role of the state) which have
underpinned economic policy since the early 1980s. The crisis provided an
opportunity to create a new economic architecture to reconnect a strong, flexible
economy to the living standards of all, not just to the rich. Unfortunately, not
only was the opportunity not grasped, but those interests that promoted
deregulated financial capitalism have quickly reasserted almost unchallenged
primacy over economic policy development; witness the coalition governments
Plan for Growth which is almost exclusively based on business tax cuts and
deregulation.10