Yesterday, I was speaking at the book launch of 'A New Scotland: Building an Equal, Fair and Sustainable Society'. I have previously written about the themes in the book, which I picked up in my Afterword. These go beyond traditional economic thinking to include inequality, public services, and economic and political governance. While there is plenty of challenging analysis, there is also optimism that a better Scotland is possible.
My substantive contribution to the book was on local economics. There is plenty of commentary on macroeconomic policy in Scotland, not least within the confines of our interminable constitutional debate. However, there is far less analysis of how our over-centralised political and economic governance undermines the local economy.
One of the issues I cover is the importance of ownership. This is a crucial issue with Community Wealth Building because local ownership is less likely to bolt when the cold economic winds blow. This week the Herald, in conjunction with The Ferret, ran a timely series of articles on ownership in Scotland.
Their research looked at 23 major shopping centres in Glasgow, Edinburgh, Dundee, Aberdeen, Inverness, Perth, Stirling and Dunfermline, excluding retail parks. They found 18 involved ownership structures that made some use of companies registered to tax havens. In other words, more than three out of four of Scotland's largest city shopping centres are owned in or linked to tax havens. Tax dodging deprives governments of tax revenues, increases inequalities and undermines smaller and domestic businesses. As Paul Sweeney MSP said, “The levels of influence held by these multinational organisations is as unsustainable as it is unbelievable. For years, city centres and high streets have been left chasing their tails because large shopping centres have had carte-blanche to reconfigure the very fabric of our major cities.”
This isn’t just an issue for the retail sector. While the majority of cultural assets in Scotland’s cities remain in the hands of local councils and charities, others are not. These include venues such as the Edinburgh Playhouse, King Tut’s Wah Wah Hut, and Glasgow’s King’s Theatre, owned by global companies with links to offshore tax havens. In addition, cinemas and theatres are at risk of being taken over by tax haven-linked private equity companies.
The research also found that Scotland’s three largest airports and some major sea ports are linked to offshore entities and that a firm building Scotland’s digital infrastructure is ultimately owned by a private equity fund. One of the firms building broadband services across Scotland is backed by a state-owned Emirati company, which invested in an Israeli firm behind controversial spyware called Pegasus. The spyware is alleged to have been deployed by foreign governments against dissidents, journalists, diplomats and members of the clergy.
The Scottish Government has a welcome commitment to a 'wellbeing economy' and supports, in principle, Community Wealth Building. However, if this is to be more than just another glossy document full of ambition, it must be backed up by action. As IPPR Scotland puts it, “The Scottish Government has a stated ambition to create a ‘wellbeing economy’, built on inclusive growth and community wealth building. That needs to see wealth not just being created in our local economies but retained there, too.”
In the book, I highlight the local initiatives that could help to regenerate our town centres and High Streets. These include creating spaces for small businesses and cooperatives and 20-minute neighbourhoods that promote a circular economy. And most importantly, investing in the social infrastructure, like libraries and leisure facilities, which binds our communities together. All of these actions can be delivered under devolved powers. A better Scotland recognises that not all the solutions to our challenges can be dictated from the centre. They must be developed and organised from communities of interest and place because ownership matters.
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