Welcome to my Blog

I was the Head of Policy and Public Affairs at UNISON Scotland until my retirement in September 2018. I now work on several policy development projects, so all views are very definitely my own. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Tuesday, 8 October 2019

Housing Commission shows how to tackle the housing emergency

There is a real housing emergency in many parts of Scotland, and we need the Government to recognise the scale of the problem and take radical action.

I was in the Scottish Parliament today at the launch of Scottish Labour’s Housing Commission report.  Chaired by Professor Stuart Gulliver it brought together a range of experts to agree realistic and practical proposals.

The report sets out a detailed ten-part plan based on the underlying principles of tackling inequality in housing and rebalancing the relationship between the private and public sector. 

The report starts with the need to increase the supply of housing. 60,000 social homes over 5 years from 2021 would mean a 70% increase in the supply of affordable homes compared to the Government’s current commitment. Social housing will once again be seen as a national asset like any other form of infrastructure.

I particularly liked the recognition that empty homes are a wasted resource when Scotland needs more homes. There are an estimated 40,000 Long Term Empty Properties in Scotland (empty for more than 6 months). The Commission proposes using the law to force sales in certain circumstances or a low-cost loan scheme to incentivise re-occupation, especially in rural areas.

The term' affordable housing’ is utterly misused by governments. Genuine affordability requires establishing the crucial links between rents and the ability of people to afford them. This means adjusting the capital subsidy to ensure rents are genuinely affordable, although as SFHA pointed out this morning, this might also require other types of grant funding.

On homelessness, there was a clear view that legislation is not enough. We have strong legislation, it is simply not being enforced. The Commission said the Labour Party should continue its cross-party support on homelessness and, in its own right, emphasise the need for sufficient, sustained long term funding and support to eradicate homelessness across the whole system.

The Private Rented Sector (PRS) is playing a much larger role in housing supply, although there are substantial regional variations. The Labour Party’s concern with PRS relates fundamentally to the need for the sector to treat its tenants fairly, honestly and with respect.  That means PRS should be subject to substantial regulation and control to protect tenants' rights, particularly those concerning security of tenure, the fairness of rent levels and their increases and the quality of accommodation being offered. 

Addressing the price of land is probably the single most crucial thing that the Government could do to improve the housing situation in Scotland. A key proposal is to allow public authorities to acquire land at, or very close to, existing use value. Part of the solution is to reform planning gain. For example, in a 2017 study, it was calculated that the 'planning gain' contributions received by Edinburgh City Region had a value of £32mn in 2015-16 while the actual land value uplift amounted to £350m. The Commission also recommends that land transferred between public bodies should be done at a nominal cost. This includes removing the duty on public bodies to maximise the receipts from land sales.

Finally, the Commission recommends strengthening the institutional framework with a new Land and Communities Development Agency in Scotland. It will sit between local and national Government, acting as a 'prime mover' to generate new mixed tenure housing communities and acquire derelict land.

The Commission rightly emphasised the importance of developing a cross-party consensus on housing. The solutions require long-term action over several parliaments. This report is a perfect place to start that work.

Thursday, 26 September 2019

Plunder of the Commons

Public wealth takes precedence over private riches. This is a policy prescription from what became known as the Lauderdale paradox. The Earl of Lauderdale in 1804 argued that there was an inverse correlation between public wealth and private riches such that an increase in the latter often served to diminish the former.

This is one of many classical ideas that underpin a new book by Guy Standing, 'Plunder of the Commons: A Manifesto for Sharing Public Wealth'. While most people are familiar with Magna Carta, there was a second document, scarcely known today, but at the time of its sealing was regarded as equally fundamental. This was the Charter of the Forest, which was about the rights of commoners to use and manage common resources. The Charter was also among the first environmental law statues as it placed implicit limits on the exploitation of natural resources.

Standing takes the principles of this Charter and looks at how they have been abused over the years, and then applies them in a modern context. He starts with how common land has been captured by private interests from the enclosures to the Highland clearances and modern-day encroachments - leaving most land in the hands of the very few, not the many. Common land today makes up only 7% of Scotland and 5% of the UK as a whole. The tenth Duke of Buccleuch is Britain's largest private landowner. As the descendant of an illegitimate son of Charles II, he inherited 277,000 acres, for which he did not do a day's work.

Land ownership continues to be concentrated in a few hands. For example, over 33,000 small-to-medium-sized farms have closed down since the mid-2000s. Forests, public parks, National Parks and even village greens have been whittled away into private ownership. This has a wider impact. For example, parks save the NHS £113 million a year as a result of fewer visits to the doctor. They also reduce heat in built-up areas and help manage run-off from heavy storms.

The book gives many other examples of how 'The Natural Commons' have been destroyed or privatised. Urban trees, water, seashores, air, sky, wind, and the minerals beneath our feet. Fracking without the landowner's permission is a recent example. Put simply; privatisation has paved the way for a pervasive colonisation of what had been commons.

Standing takes a similar approach to other, less obvious 'commons'. These include the 'social commons', public services that are provided outwith the private market and have been built up over generations. The 'civil commons' shows how access to justice (charges, legal aid, etc.) has been whittled away, and even criminal justice has been privatised. 

The arts, sport, the mass media, public libraries, art galleries, museums, concert halls and public places for performances are all part of our 'cultural commons'. He shows how the depletion of the cultural commons in the twenty-first century has been extensive and devastating, accelerated by the prolonged period of austerity. Concerns over the use of big data are covered in his' knowledge commons'. He argues that everyone should have access to adequate information and shows how corporate interests have captured information through enclosure, commodification, privatisation and ideological capture.

What I like about this book is that while providing excellent analysis, it also provides solutions - 44 of them. The final chapters offer a modern Charter of the Commons, to promote an ecologically sustainable society in which security, freedom and equality can flourish. There are too many to list in a blog post. However, a key recommendation is the establishment of a Commons Fund, sourced by levies on the commercial use or exploitation of the commons. These levies would also give all citizens a sense of collective ownership, even if some cost them personally.

Private wealth should be the starting point for the fund as it has increased at the expense of public wealth. Only 4% of tax revenues in the UK come from wealth. Standing proposes a progressive tax on inherited wealth or a general wealth tax, which already exists in a number of countries. Other sources of income include a Land Value Tax, Carbon Levy, Frequent Flyer Levy, Cruise Liner Levy, water use and others. These all have the advantage of encouraging less environmentally damaging activity. 

A Digital Data Levy addresses the use of our personal data by companies that are adept at tax avoidance, putting little back into our economy and public services. A similar approach is suggested to intellectual property rights, including an end to subsidies for Patents.

A number of us are sceptical that Basic Income will work without it being funded at a meaningful level. Standing argues that the Commons Fund could be one route to such a Basic Income. He also argues that a Basic Income also comes with an obligation to be an active citizen.

Overall, this is a very welcome, and concise, contribution to the debate about ownership, public services and inequality. I'll finish with this paragraph from the concluding chapter:

"The commons are our collective heritage. They cannot be alienated legitimately unless we, as citizens, decide that is what we wish, recognising that we are custodians for future generations as well as ours. Privatising and commercialising the commons, and most particularly colonising them, amounts to theft. It is a form of corruption intended to generate rental income for a few, from newly created 'property rights'. And it is regressive. The loss of the commons most affects those who rely on it the most."

Tuesday, 10 September 2019

How we can finance the future

I am in Cape Town, South Africa, this week speaking at the global summit, 'Financing the Future'.

This is a gathering of the global divest/invest movement. The aim is to shift finance flows away from fossil fuels and into climate solutions as the right way to 'finance the future’. The conference is hearing from experts and campaigners who describe why these approaches are indispensable to solving the climate crisis and ensuring universal access to clean, reliable, affordable sources of energy.

There have been some inspirational contributions, including the deCOALonize campaign in Kenya who took on huge corporations, Chinese investors and the government to stop the development of a coal industry in Kenya. Or the Dakota Sioux who opposed the oil pipeline that threatens their environment. 

There was also inspiration and support for what young people have achieved with their campaigns, including the 20 September climate strike. Back home, today’s Scottish Household Survey highlights almost two-thirds of adults viewed climate change as an immediate and urgent problem. The greatest increase in concern is among adults aged 16-24, rising from 38% in 2013 to 67% in 2018.

However, there is plenty of hard-headed analysis as well. The movement has just passed $11 trillion of managed investment funds committed to divestment from fossil fuels. I was impressed by the understanding that this not only an environmental issue. It is just as much about economic and human rights, about global justice.

Exxon Mobil is dying
I talked about Scotland's cross-party political commitment to tackle climate action. That ambition has resulted in good progress in decarbonising our electricity generation, although we remain in the middle of the emissions league table because of limited work on transport and heat.

I also referenced the importance of Just Transition. Sadly, having to point out that as you travel across Scotland, you pass thousands of wind turbines, precious few of which were manufactured in Scotland. We have plenty of experience in our coal and steel communities of bad transitions – the consequences of which remain with us today. Scotland’s Just Transition Commission is very welcome, but it must be more than a 'good intentions' commission. There has to be a real route map, with a jobs guarantee and a commitment to solutions that eliminate poverty and inequality. As Sam Smith from the ITUC put it: “a world where emissions are down, but actually people have decent and better lives.”.

My contribution also covered the practical issues associated with pension divestment and investment. Shifting our pensions funds into a long-term horizon - to recognise that fiduciary duty is no longer an excuse for inaction when the evidence is clear that fossil fuels are not a viable investment. I highlighted the practical measures in the UNISON guide as a template for pension trustees to not only divest but also invest in a different future. 

Being in Africa gives you a different perspective on these issues. Two-thirds of Africa doesn’t have grid access to electricity and little prospect of the marketised electricity system delivering much improvement. However, there are innovative schemes using solar and mini-grids in countries like Zambia and Nigeria.

It was also interesting to talk to South African unions and environmental groups about coal mining in that country, where Just Transition hasn't got much beyond the aspiration stage. A story involving Malawi illustrates other practical challenges. The energy minister told one delegate that he would love to build renewable electricity generation, but the only financing offer he had was from the Chinese to build a coal plant!

There was a lot of discussion about alternative investment. For example, mini-grids in Nigeria face 35% interest rates, staggering for someone coming from Scotland. There are probably not enough investment opportunities in renewables for constrained investors like pension funds, who need scale, low risk and have limited expertise. That’s why other socially useful investment is equally important like housing and other forms of infrastructure. 

Overall, there is plenty of inspiration for change here, and some fantastic projects and campaigns are going on worldwide. It seems appropriate being in South Africa to end with a Nelson Mandela quote: "It always seems impossible until it's done.”

Thursday, 22 August 2019

New National Parks for Scotland

National Parks are beautiful and inspiring places enjoyed by many – so why don’t we have more of them?

I declare an interest, I love our National Parks. I have walked the hills of the Trossachs and the Cairngorms made easier by the infrastructure of our National Parks. As a child, I spent many a summer holiday in the Lake District, which remains one of my favourite places on earth. 

Our National Parks are very different places. The wild open spaces of the Cairngorms, contrast with the generally gentler terrain of the Trossachs or the Lake District. At my age, the sight of a tea shop or pub in the next valley is a welcome sight, even if it adds to the development!  National Parks are not museums. They are living places where people make their living as well as respecting the environment.

Last month, was the 70thanniversary of the 1949 Act that gave rise to the UK’s National Parks. Yet another ground-breaking piece of legislation passed by the post-war Labour government. The Act followed years of campaigning activity – most famously the mass trespass of Kinder Scout in the Peak District in 1932. In Scotland, the Ramsay Report (1945) recommended five areas, which received a special status somewhat short of being National Parks.  

There is a Scottish Campaign for National Parks, which seeks to preserve and protect our existing parks. They also make a case for new National Parks in a well-argued report.  It makes the point that Scotland’s landscape ranks amongst the best in the world, yet out of 3,500 National Parks worldwide, Scotland has only two. Loch Lomond and the Trossachs (2002) and Cairngorms (2003).

Previous expert reports recommended the establishment of at least four or five National Parks in Scotland. Most recently more Coastal or Marine National Parks with two possible areas shortlisted. The campaign argues for a national strategy to designate more National Parks and improve the operation and governance of the existing ones. The case has been developed by the Scottish National Parks Development project. 

The National Parks (Scotland) Act 2000 was one of the first pieces of legislation passed by the Scottish Parliament after devolution. Section 2 of the Act sets out a broad criterion for an area to be designated as a National Park. On that basis, the campaign has recommended the areas identified below. Two of these areas, Borders and Galloway have developed more detailed plans. Argyll and Bute Council has published a report on a Coastal and Marine National Park (CMNP) for the Argyll Islands and Coast.

Another early piece of Scottish Parliament legislation, the Land Reform Act 2003, gives us proper access rights to the countryside. However, our path networks are pretty limited, and like most public services have suffered from austerity.

In England, the UK government has organised the Glover Review of designated landscapes, which has published an interim report. This suggests that there is much to do to improve access, increase funding, reduce housing costs and strengthen governance. There has also been a growth in non-statutory designations. 

Another new initiative is the concept of the National Park City. They seek to apply the benefits of traditional National Parks to cities. A campaign has been started to designate Glasgow as the first in Scotland. They join several campaigns across the world with similar aims, including London.

Apart from the usual free-market dafties like the Adam Smith Institute, few people are against National Parks in principle. The opposition tends to come from some commercial and landowning interests who fear more significant development restrictions. Despite a manifesto commitment, the current Scottish Government has done nothing to look at new designations, claiming to focus on the existing provision. 

There is plenty of criticism of how National Parks are run, including this grand rant by George Monbiot. So, any new National Parks would need to consider the governance arrangements.  Scottish legislation is pretty flexible on this issue.

In conclusion, I think there is a strong case for more National Parks in Scotland. It will raise issues from control and ownership of land to government financing and the broader rural economy. These are challenges we should face to protect and improve our natural environment for everyone.

Friday, 26 July 2019

The making of a democratic economy

Progressive writers, including me, have filled libraries with polemics against austerity or neo-liberal economics. However, we have been somewhat less prolific when it comes to setting out the alternatives. What turns reactive movements into transformative ones, is to be clear what we are for as well as what we are against.

A new book by Marjorie Kelly and Ted Howard, 'The Making of a Democratic Economy' offers some alternatives. As Naomi Kline says in her foreword; "It’s not enough to imagine that another world is possible; we need to be able to picture it, experience it in miniature, feel and taste it.”

Kelly and Howard indeed start by explaining what is wrong with corporate capitalism and the task ahead. As they put it:

“This emerging democratic economy is in stark contrast to today’s extractive economy, designed for financial extraction by an elite. It’s an economy of, by, and for the 1 percent. Society long ago democratized government, but we have never democratized the economy.”

The principles of their democratic economy, in contrast to the extractive economy, include:

  • Community: The common good comes first. The self-contained individual does not exist, the community creates the conditions in which each of us may flourish.
  • Inclusion: Creating opportunity for those long excluded. Particularly those excluded based on race, sex and wealth.
  • Place: Building community wealth that stays local. Grounded in loyalty to a geographic place where working together for the common good instinctively makes sense.
  • Good Work: Putting labour before capital with a living wage as a central aim.
  • Democratised ownership: Enterprises are understood to be human communities. They operate at an appropriate scale with living missions and with decision making by moral agents. This is more likely when ownership is locally rooted and close to daily operations.
  • Sustainability: Humans are not masters of the world but members of it. The extractive economy is waging war on nature. The democratic economy understands that we must meet present needs without compromising the ability of those in the future to meet their needs.
  • Ethical Finance: Investing and lending for people and place. Bringing money back to the real world, reaching actual companies to fund operations – not the casino economy of speculative trading.

The meat of this book sets out practical examples that highlight the above principles, mostly from the USA and UK. From rural native American communities to areas of urban decay. For example, community wealth building in Preston, being developed in North Ayrshire and elsewhere, was based on a model in Cleveland. In that city anchor institutions built a new economy of place – less inclined to abandon their community to profit as maximising corporations did. 

They don't duck the challenges. The example of a New York cooperative of home care workers faced many of the problems we have with a marketised social care system. This highlights the importance of having a government that is focused on supporting the democratic economy.

Ownership is vital in all these examples, and they include municipal, cooperatives, social enterprises and private companies. Providing new forms of finance is also critical. Labour's National Investment Bank could play an important role, together with the development of local and regional banks. There are European and US examples of how this is actually working in practice.

This is not a dry economic textbook, even if it is rooted in financial accountability and sound business systems. It is also a moral call to arms; “When we see with moral clarity, it becomes blindingly obvious that democracy is about the pursuit of happiness for everyone.” 

There is an afterword by Aditya Chakrabortty, which highlights the many similar stories he has reported on in his Guardian column. Another Guardian columnist, George Monbiot, in today's paper, highlights the strategy behind 'disaster capitalism' and their political puppets like Trump, Farage and Johnson. The new oligarchs want the deconstruction of the administrative state with chaos being the new profit multiplier.

Our democracy is struggling under the new populism financed by the oligarchs. We need to find ways of democratising our economy, to shift wealth and power from the few to the many. This book doesn't just point the way, you can also 'feel and taste' what it might look like. 

Monday, 1 July 2019

The Scottish Parliament - 20 years on

On this day (1stJuly) in 1999, Westminster transferred powers to the new Scottish Parliament in the most significant act of devolution the UK has ever seen. 20 years on it is worth considering if the Scottish Parliament has achieved the hopes and aspirations that drove the devolution campaign and what more needs to be done. 

Articles on the 20thAnniversary tend to fall into a rose-tinted or overly cynical commentary on the past 20 years.  For those of us used to dealing with Westminster pre-devolution, it is hard to imagine how little attention was given to Scottish issues compared with today. I, therefore, have no regrets about campaigning for devolution and I generally think it has been positive for politics and society.

However, yes you knew there would be a 'but', that doesn't put me in the rose-tinted school. A lot of attention has been given to the powers a Scottish Parliament should have, and too little on what we could do with the powers we have. Many of Scotland’s enduring challenges have been analysed, commissioned and consulted to near death, but most remain because successive governments have been too timid. 

Nearly a decade of austerity has contributed to a bunker mentality in our public services, which has thankfully been spared the marketisation and fragmentation that has caused such chaos south of the border. The notable exception has been social care, where a marketised race to the bottom has created a crisis, which the Scottish Government is only applying sticking tape solutions. 

This bunker means that there is a reluctance to look at radical solutions and meaningful change. An excellent example of this is the failure to implement key recommendations of the Christie Commission. In particular a shift to preventative spending and more localised public services. Instead, we have more centralisation coupled with a command and control model of public sector management.

The endless constitutional debate has not helped. A discussion that rarely considers where power rests in our society. Of course, London sucks in power and resources since Thatcher destroyed the UK’s manufacturing and primary industries, replacing them with trading financial instruments. However, even if Scotland were an independent country, London would continue to exert a massive influence on our economy. Ask the Danes about Germany.

There has been little effort to rebalance the Scottish economy. No industrial strategy worthy of the name and little concern about ownership. Even iconic and vital industries like whisky are controlled by boardrooms far from Scotland. Replacing the London establishment with the Edinburgh establishment isn’t going to achieve a fundamental shift in power and wealth. The Scottish Government’s progressive policies come to a grinding halt when the Scottish establishment feels threatened. Look at the response to proposed changes in Freedom of Information or lobbying legislation.

While political debate focuses on Brexit or Independence referenda, the real world problems mount up. Most of these relate to poverty and inequality. Over 6,000 children will need food parcels during the school holidays, many more are homeless living in temporary accommodation at best. More than 36,000 Scots are looking for somewhere to live. 

In these circumstances, it is hardly surprising that the suicide rate rose 15% last year - a rate that is three times higher in disadvantaged areas. I had the odd disagreement with Kenny MacAskill when he was a minister, but he hit the nail on the head when he recently said the SNP was too focused on “identity inequality rather than wealth and land disparity”.

So, 20 years on we should celebrate the genuine achievements of the Scottish Parliament. However, we should also recognise that it has only tinkered around the edges of Scotland's enduring problems. We need to focus the powers we have to address these issues while looking at long term reform that shifts power and wealth from the few to the many. 

Friday, 21 June 2019

Gizza Job!

The immortal words of Yosser Hughes is an unconventional way for an economist to start a book, but then Danny Blanchflower has often found himself at odds with conventional economic theory. His new book 'Not Working: Where Have All the Good Jobs Gone' is no different.  

He argues that low earnings and the loss of high-paying jobs have led to feelings of instability, insecurity, and helplessness, especially for the less educated. Suicide rates in the United States are up 25% since 1999. He links this to the rise of right-wing populism and the failure of the elites to get economic policy right.

Like the author, one of the things I remember from A-Level economics is that 'full employment' doesn't mean everyone has a job. His core argument is that the traditional definition of full employment, below 4%, is no longer valid. Mainly because there are very high levels of “underemployment” prevailing around the world. In his words:

“It is my contention that the natural rate of unemployment in most advanced countries is well below 3 percent. Employment rates and participation rates can rise, and unemployment rates can fall and by a lot. Globalization has weakened workers’ bargaining power. Migrant flows have put downward pressure on wages and greased the wheels of the labor market as their presence has increased mobility. The decline in the homeownership rate, which slows job creation and increases unemployment, has helped mobility.”

He points to the Bank of England’s consistent overestimates of wage growth as evidence that economists are basing their estimates on out of date 1970’s models. This leads to calls for rising interest rates to tackle a non-existent inflation problem.

Refreshingly, he doesn’t just give us an academic analysis of the problem (although there are all the charts and data you could want), he offers some solutions. These include:

  • Raising the 2% inflation target.
  • As economies are at best ticking along, keep the foot on the stimulus pedal. Don’t get hung up about debt, it matters most what the debt is used for, not its size. 
  • Real full employment will raise wages with consequent benefits for people and the economy.
  •  End austerity and stop shrinking the state to repair society and trust amongst low-income groups, which drives right-wing popularism. Now is the time to rebuild our social capital and tackle inequality.
  • Invest in early childhood education and subsidise childcare.
  • Progressive taxation to reduce income inequality and remove social security caps. Also supports earned income tax credits to encourage work.
  • Increase infrastructure spending.
  • Encourage migration and measures to help mobility.

He concludes:

“We were never all in this together, and it is time we were. We are better together. People are hurting. The worry is that policymakers have not learned from their mistakes, but now they have little firepower to deal with the onset of the next economic crisis. The whole world wants a good job. Gizza job.”

Danny Blanchflower is not the only person to be writing about jobs and wages. The latest IFS study shows that between 1994 and 2017 there was an increase from 13% to 18% in the proportion of people in working households living in relative poverty (that’s an increase of 40%). A key driver of the rise has been increasing housing costs for low earning households, driven mainly by higher private and social rents. Also, earnings growth has been significantly slower for lower earners relative to higher earners.

Professor Peter Dolton has a handy guide to the UK labour market, which he has helpfully summarised into ten important facts. He also highlights public and private sector pay and the impact of changes to occupational pension schemes. He also says that around a third of graduates do not have graduate jobs reducing the earnings premium for a degree from 15% to just 6%. With a substantial impact on student loan repayment.

The lesson from all this is that work matters. Not just in the dry economic sense, but in terms of social policy. Some of the radical solutions may be challenged by traditional economists, but with their track record, we should move on, even if they can't.