A New Scotland

In the book, A New Scotland, leading activists and academics lay out the blueprints for radical reform, showing how society can be transformed by embedding values of democracy, social justice and environmental sustainability into a coherent set of policy ideas.

This is not a conventional book on economic policy. The first theme that struck me is the breadth of the factors that make up the nation's wealth. When I first studied economics, we were taught a range of formulas that calculated everything from a nation's output to the money supply. In this book, the contributors demonstrate that the wealth of a nation depends on much more than mathematical calculations. 

More than anything else, it is inequality that holds back our economy. Equal societies do better on almost every measurement. Then we have arguably the most significant challenge facing our society, environmental and climate justice. This also reminds us that we live in an interconnected world, which involves action beyond our borders. Some chapters cover subjects that are not traditional economic concerns yet are essential to a functioning economy. These include housing, education, transport, land, health and decent work. Land ownership is a particularly Scottish concern, with a disproportionate share held in the hands of very few individuals and bodies. 

Then there are chapters on the structural factors that undermine our economy. These include the need for economic democracy that challenges the elite domination of wealth and economic decision-making. As well as addressing the weak forms of political governance. Several contributors highlight the development of a highly educated, socially unrepresentative professional-managerial class, which has banished all talk of ʻcapitalismʼ, ʻclassʼ and ‘exploitation’ as obsolete - leaving little appetite amongst the political elites for change. Chapters on culture, human rights, race and gender also point to complacency in what we like to think of as Radical Scotland. 

The second big theme for me is that a better Scotland is possible. If the analysis might depress us, the possibilities are also there in buckets, from a new approach to bottom-up public ownership and investment in worker-owned business to individual economic rights, public participation and deliberation of the economy itself. This wouldn't be a book about Scotland without referencing our national obsession, constitutional change, and the authors hold a range of views on this issue. Whatever constitutional path is taken, Scotland will remain embedded in a complex web of economic relationships across these islands, Europe and the world. 

My chapter moves away from traditional macroeconomics to focus on the local economy. Scotland has one of the democratic world's most centralised forms of government and one of the least 'local' local democracies. Economic development in Scotland has focused on attracting inward investment. This has resulted in the wealth generated by workers, local people, and businesses being extracted by often distant shareholders as profits and dividends in our communities of place. These firms are often the first to flee when the economic cycle shifts. Community Wealth Building seeks to address this by encouraging plural ownership of the local economy, increasing investment using fair employment, progressive procurement and the socially just use of land and property. 

I also argue that outsourcing of public services has fragmented delivery and extracted wealth from communities. I make a case for the collective provision of a wide range of local services based on plural forms of democratised and decentralised common ownership. The cooperative movement and other forms of community ownership could also play a much larger role in regenerating the local economy. The problems facing our high streets and town centres will not go away after the pandemic. Consequently, we need to rethink our town centres as places where people live and work, not just shop. This should include a level playing field on taxation. I listened to an interesting IFS debate last night about an Online Sales Tax to offset the business rates for high street retailers. There are always challenges in implementing a new tax, but this issue needs to be tackled now.

This book highlights some challenges for traditional thinking on the left in Scotland. We should be proud of our radical history while applying the lessons to a Scotland in thrall to a neo-liberal economic orthodoxy with weak governance systems. The solutions cannot be dictated from the top; they must be developed and organised from communities of interest and place. This book offers a different vision for Scotland and signposts new approaches to our enduring challenges.    

ScotRail - the start of a new journey

Today is a special day for rail campaigners who have been making a case for bringing Scotland's railways back into public ownership for the 25 years since privatisation. ScotRail is back as a public service. While this has been a long journey, with every Scottish Government since devolution, it is not the final destination. Public ownership is not enough on its own. What matters is what we do with it. And let's not forget that ScotRail is only part of Scotland's railway system; privatisation is still with us. Anglo-Scottish high-speed rail is still a pipe dream.

There have been the predictable doomsayers who claim ScotRail will "turn out to be CalMac on wheels". The ferry fiasco certainly hasn’t enhanced the Scottish Government’s reputation for running anything. However, those who argue that there is some magic formula for success that only applies to the private sector clearly haven't been following the P&O debacle or the costly absurdities of rail privatisation over the past 25 years. Even the Tories have called time on their privatisation model, although typically, their new model just tinkers around the edges.

If we are to avoid another CalMac, the First Minister needs to get serious about the promised 'national conversation for the future vision of the service. We also need some immediate action, not another long grass strategy. Fortunately, there are already some good contributions to get us started. For example, the rail unions have published their vision for Scotland's railways with help from Unity Consulting. These proposals include expanding the service, introducing proper staffing levels, and improving industrial relations.

Railfuture Scotland has suggested a pretty good mission statement for ScotRail, ‘The trains need to go where people want, when people want and at a reasonable price’. Unfortunately, this will not be achieved through cuts in rail services and ticket office closures. Electronic ticketing is still unreliable, and many prefer or have no option but to use a paper ticket. I regretted using an electronic ticket last year when I had a long battle with Avanti, only resolved by going to the Rail Ombudsman. A closed ticket office is also a closed waiting room and toilets.

The key to the future of our railways and climate change is to get us out of our cars and onto the train. It has been estimated that we need to double pre-covid passenger numbers to achieve net-zero. Quite a challenge when commuting numbers are likely to fall with greater use of flexible working. There will be more focus on leisure travel and ensuring rail is the first choice for long-distance journeys. As there were twice as many seats provided each day as passengers travelling pre-Covid, rail is in a unique position to accommodate transfer away from the car without further increases in cost to the taxpayer.  

Railfuture has also produced a list of 50 new stations for reopening on existing lines that would generate significant numbers of new passengers. The same applies to rail freight. I recently did a paper for a European think tank on this issue, highlighting how far behind we are. In countries like Switzerland and Austria bus and rail use has been rising every year. Several bids for freeports or greenports don’t even have a rail link, suggesting they will be served by even more lorries on our roads. While all this will require significant investment, the costs of not doing it could be considerably more.

The railways also need to be part of an integrated transport system, which policymakers have discussed for many years and some cities have delivered. Sadly, not in Scotland, where it took the Scottish Government years just to establish a forum. We need a coherent network of interconnecting bus and rail services across the country. One break in that service and the car becomes the default means of travel for many. For example, I am flying from Edinburgh Airport on Monday and I would have preferred to go by rail and tram. However, my recent experience of cancelled trains means I will probably have to drive to be sure of catching my early morning flight. I will not be alone in that, looking at airport car parks.

Today is a cause for celebration, but it's just the start of the journey. The end destination must be ensuring the Scottish Government delivers a model of public ownership for ScotRail that is genuinely world-class. 

Putting the local into reducing health inequalities

While national strategies are essential in reducing health inequalities, we need to emphasise local action. 

This week the Scottish Government statistics division published its long-term monitoring of health inequalities. Spoiler alert, it doesn’t make happy reading. Male Healthy Life Expectancy at birth was 46.8 years for those living in the most deprived areas, 23.7 years lower than those living in the least deprived areas (70.4 years), and it’s getting worse. For women, the gap was almost identical at 23.6 years. Moreover, in 2020 the premature mortality rate in the most deprived areas was four times higher than the rate in the least deprived areas.

So, what is the Scottish Government doing about it? Well, there was a public health ‘review’ in 2015. There are many glossy documents and websites that say they are ‘working towards’ reducing health inequalities, ‘defining’ their priorities, and a lot of similar guff. What’s missing is any sense of urgency to actually implement these plans.

Let me give just one small example. The Scottish Government rightly says that Fair Work is an important tool in reducing health inequalities, and procurement is an important lever. Last year, SHA Scotland spotted that NHS Education for Scotland (a health quango) had awarded a contract to Amazon. Given Amazon’s notorious employment practices, they wondered how they passed the Scottish Government’s Fair Work criteria that are supposed to be applied to the evaluation of contract bids. So, they sent off an FoI request and were told that the Fair Work Criteria wasn’t applied to this contract. Here we have a government health quango who couldn’t even be bothered to apply the policy. It is no wonder that there is a considerable gap between rhetoric and policy delivery.

Important though national action is, many of the services and actions required to reduce health inequalities need to happen locally. No serious plan to tackle health inequalities in Scotland can ignore the pivotal role of local government. Councils make a vital contribution to weaving the social fabric of their areas and seeking to create and sustain healthy places for people to be born, grow, live, work and age. 

I drafted a paper that SHA Scotland launched this week, which sets out some of the ways that local government can make a difference. Planning, public spaces, leisure and cultural services all make up the vital social infrastructure that promotes wellbeing in our communities. This helps tackle poor mental health through stronger social cohesion and social support. They can also create sustainable communities tackling air pollution and food poverty. However, this cannot be achieved while the Scottish Government cuts councils' funding by nearly a billion pounds. Fair funding for local government is crucial to tackling health inequalities. In addition, centralising services in Edinburgh, as with the proposed National Care Service, is also the opposite of what is needed to reform social care.

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Local action on health inequalities requires councils to lead the way with a community health strategy that puts reducing health inequalities at the heart of everything they do. When we focus on the social determinants of health, we see that local government services are health services. Without local government, adults and children would die sooner, live in worse conditions, lead lives that made them ill more often, and experience less emotional, mental and physical wellbeing than they do now.

The Scottish Government should set the framework for reducing health inequalities and take appropriate actions at the national level. That doesn’t mean micromanaging from Edinburgh. They must also ensure that the local government is funded fairly, not just pass on Tory austerity to councils while protecting their budgets. Local communities understand what needs to be done in their area, and they need the leadership and resources to do it.

Time to reform sick pay

'Fixing the UK's broken sick pay regime would reduce the spread of infectious diseases – and be a small step towards a fairer country.' I read these words in a Guardian editorial just before a mentoring session with an HR colleague. She reminded me that I was surprised when we discussed reviewing sick pay as one of her initial goals after moving from a private-sector post to the care sector.

I probably shouldn't have been surprised as three out of four employers responding to a government consultation agreed that statutory sick pay should be extended, and small businesses were as supportive as large. Not that this consensus brought any action from the UK Government. The UK has the least generous statutory sick pay in Europe, worth just £96.35 per week, around 15 per cent of average earnings, compared to an OECD average of over 60 per cent. And it is only available to employees earning £120 per week or more – meaning two million workers nationwide, mostly women, do not qualify.

The pandemic ought to have been a wake-up call on sick pay. Too many workers in public-facing jobs are, in effect, incentivised to go to work when they are ill. If care workers suspect they are seriously ill but worry that £96 a week will leave them behind on rent and bills, they have a choice: fall into debt or risk patients getting ill – with potentially fatal consequences. More than 250,000 workers were self-isolating last month without decent sick pay or any sick pay at all. And it's not a problem that will go away when the pandemic is over. An estimated 1.3 million people (1.9% of the population) were experiencing self-reported long COVID as of October 2021.

It is also discriminatory. A report from the IPPR and UCL found that households earning less than £25,000 were twice as likely to lack access to any sick pay compared to those earning more than £75,000. Similarly, workers over the age of 65 were five times more likely to lack access to sick pay compared to those aged 25 to 44. Workers aged 45 and 64 were also twice as likely as this younger age group to lack access to sick pay. And people from a South Asian background were 40 per cent more likely to lack access to sick pay than white workers.

Another tricky issue for her care organisation was vaccine mandates. Like most people, including me, her board found it difficult to understand why care workers wouldn't want to protect themselves and the people they care for by getting vaccinated. It wasn't mandatory in Scotland, but several organisations had decided to go down that route. We agreed that vaccine mandates could be ethical and legal, and staff should be encouraged to get vaccinated. However, mandates will only be necessary if there is no other way of preventing transmission to a similar degree. There is now good evidence that a vaccine mandate will not prevent healthcare workers from passing on the virus to vulnerable patients. The organisation also rejected the idea of cutting contractual sick pay for unvaccinated workers as, given the low level of SSP, that could encourage working when infected. This approach worked with only a handful of staff not voluntarily getting vaccinated.

TUC General Secretary Frances O'Grady said, 'No one should be forced to choose between doing the right thing and self-isolating or putting food on the table.' Employers should ensure that their sick pay arrangements don't force workers to make that decision. That approach needs to be underpinned by a statutory sick pay scheme that pays the real living wage to everyone.

A wake up call for a realistic energy policy

 This month, I returned to familiar territory when asked to write an overview of UK energy policy as part of a wider European project. Energy policy can be quite parochial, particularly in Scotland, so it was interesting listening to European colleagues who link the issue to broader strategic issues, such as the Russian gas pipeline.

The impact of rising energy prices is a common concern across Europe. UK customers have had some protection due to tariff caps, but these caps increased by 12% in October 2021 and are set to increase in April 2022. The Bank of England expects the cap to rise from its current level by 20% for electricity and 35% for gas, leading to year-on-year energy inflation rates of 31% and 58%, respectively, in April. Others, including energy specialists Cornwall Insight, have predicted even steeper increases. The £2000 plus annual energy bill looks inevitable.

As the IFS highlight, this would lead to a mildly regressive pattern of overall inflation because lower-income households spend almost three times as much of their budgets on gas and electricity as the highest-income tenth on average (11% versus 4%). To this, you can add the impact of benefit cuts and tax rises, all of which disproportionately hit the lower paid. So much for levelling up!

A failing energy market is also not unique to the UK. New entrants have been collapsing like flies, not least because they were ill-equipped to cope with rising gas prices. Even more prominent players like OVO Energy (the third biggest supplier) are in trouble. They announced 1700 job losses today, which is unlikely to do much for their customer service. Already tarnished by advising customers to keep their heating bills low by “having a cuddle with your pets”, eating “hearty bowls of porridge” and “doing a few star jumps”. Ovo took over SSE’s retail operation a couple of years ago.

Reliance on expensive gas imports is another common position, driven by the ‘dash for gas’ in the 1990s by the privatised energy companies. In Europe, that may be addressed by the Nord Stream 2 project, which will bring vast amounts of extra Russian gas into the European market. However, the implications for Ukraine and Russian power more generally is clearly a concern. Brian Wilson reminds us we are paying the price of action and inaction over the past 20 years, “Those whose mission in life was to get rid of nuclear power knew that gas was the realistic alternative, regardless of cost or where it came from. Those who preached renewables and pretended there was not a problem with intermittency that needed to be addressed with equal vigour made the same unspoken assumption.” 

This should all be a wake-up call for further renewable generation and energy efficiency. However, that won't address the immediate challenges. The energy industry has suggested a £20 billion fund to subsidise bills, repaid over ten years. This, of course, assumes prices will return to previous levels, which may be a gamble the Treasury is unwilling to take. Removing VAT and transferring 'green levies' from bills to the taxpayer would save £250 a year for the average householder. Helpful, but just a dent in the projected price rises. A windfall tax on energy producers profits could fund an expansion of the warm homes discount and the winter fuel allowance and reversing benefit cuts and tax increases.

Fossil fuel producers exploit the crisis to warn against a rapid move away from fossil fuels. For environmentalists, the situation highlights the need to accelerate the move away from expensive and volatile fossil fuels. This highlights the failure of COP26 to tackle the fossil fuel status quo. More green investment is required to ensure the future falling fossil fuel production is compensated for by improvements in energy efficiency and rapid growth in clean power generation. Despite some limited actions by the financial markets to discourage fossil fuel investment, producers do not believe demand will disappear. 

The Scottish Government continues to bury its head in the sand over nuclear power. It argues, “Significant growth in renewables, storage, hydrogen and in carbon capture are, in our view, the best way in which to secure Scotland’s future energy needs and to meet our net zero objectives.”. This might be a strategy, except that three out of four elements are some way off at best. Little is happening on storage, which is, in any case, expensive when the alternative is to import English gas and nuclear power when the wind isn't blowing. Hydrogen is not really an option for electricity, it's a better bet for heating and transport, but even that is small scale so far. Carbon capture is a sensible option for industrial processes, but again we have barely reached demonstrator projects.

Meanwhile, Hunterston is closing, leaving us with just one time-limited nuclear plant. Nuclear does have cost issues, but we subsidised other forms of renewables. I have given up explaining on Twitter (well, not quite!) the misleading energy statistics that are so often bandied about. Not least the First Minister claiming almost all electricity used in Scotland comes from renewables. In fact, in 2020, 56% of the electricity consumed in Scotland came from renewable sources, 30% from nuclear (which is also renewable) and 13% from fossil fuels. 

There is no shortage of energy issues to be tackled in Europe and the UK. The short-term solutions are all expensive and are the inevitable consequences of a failure to take a sensible long-term approach to energy policy. They are coupled with too much reliance on market solutions. We need a planned and balanced energy policy. 

The 'poor relation' in railway policy

I was speaking at a European symposium on rail policy this week, providing an update on developments in the UK. It was interesting to hear what other countries were doing post-pandemic. Most are facing similar challenges as passenger volumes, if not freight, struggle to return to pre-pandemic levels. The concerns over the new Omicron variant is adding to those challenges.

In the UK, I explained the immediate UK Government reaction has been a predictable outbreak of short-termism. The Treasury spent an additional £6.5bn on running the railway in 2020-21 to cover lost fare revenue during the pandemic, but that was a drop in the ocean compared with other pandemic costs and should be significantly less this year. Train operators have been told to find savings of 10% while somehow protecting services. With large fixed costs in rolling stock and rail access, cutting staff or reducing terms and conditions is all that is left. As rail historian, Christian Wolmar says, “In the short-term, they are being completely squeezed. It’s incoherent. And it’s going to have a real impact.”

Since June, Unions have been in talks over plans to reduce costs in the industry. Voluntary redundancy schemes have been introduced, but the current agreement to rule out forced job cuts ends on 31 December. The rail unions are understandably expecting the worse and preparing for industrial action. The RMT said: “We’re very clear on the direction of travel, that a massive jobs cull at train operators and Network Rail are coming, as well as an attack on pay and pensions. We’re getting our tanks on the lawn right now.”

In Scotland, ASLEF has shown the way with its call to end “rip-off peak fares” and new investment. Scottish organiser Kevin Lindsay described the Budget as “the first big test” of the Scottish Government’s commitment to meeting its climate targets by “Investing in rail by making fares more affordable, ruling out service cuts, improving accessibility and growing freight infrastructure is of huge importance if we are to take the climate action we need to”. But, sadly, his call fell on deaf ears in the Scottish Government’s somewhat less than ‘bold and ambitious’ budget. The transport section is also pretty opaque when it comes to detail.

Other speakers and I argued that a new funding approach is required until rail use recovers. The UK and devolved governments should invest in rail services or see long-term increased car use, increased carbon emissions and more congestion. The new German government coalition plans to invest more in rail than road, and the Austrian government has introduced a “climate ticket”, giving access to all public transport. While the EU Single European Railway Area was broadly welcomed, the focus should be on breaking down barriers rather than promoting competition, which was likely to lead to the same shambles as energy networks. Despite some criticism of the railways, consumer satisfaction across the EU is quite high at almost 75%. Some £86 billion of EU funds has been allocated to rail investment, reflecting 2021 as the European Year of Rail. Although the pandemic has understandably overshadowed this initiative.

My previous paper had outlined the UK Government’s long-term plans for the railways. The Williams-Shapps plan includes a new “Great British Railways” contracting companies to run services, manage the infrastructure and conduct long-term planning. Since then, the UK Government has decided to slash the plan for more high-speed rail in the north of England, abandoning one leg of the HS2 high-speed rail link. Even the promised £96bn investment is subject to Treasury approval at key stages. With rail fares going up above the inflation rate and fuel duty and air passenger duty held or cut, climate change policy is going in the wrong direction.

We also had the Union Connectivity Review report that seeks to improve transport links between England and Scotland. Predictably, this collapsed into a constitutional bun fight, with the Scottish Government accusing UK ministers of a ‘power grab’. Others at the symposium used to more mature federal systems looked bemused! It has to be said the report was pretty underwhelming. Strong on rhetoric, but little in the way of firm plans.

Integrated transport also came up at the event. A single travel card is pretty standard in European cities, even those with less well-developed economies, as the Herald’s Catriona Stewart found in her trip to Tbilisi and Istanbul. Not to mention London. However, despite many promises, we have barely got past establishing a group to investigate the idea in Scotland. I explained that process is usually more important than action in Scotland.

For the seriously radical, there are free travel schemes. There were mixed views on these. Those countries that tried it argued that while public transport use increased, there was only a modest drop off in-car use. Increasing the cost of parking, congestion charging, or increasing fuel taxes needs to be combined with free fares to lower car demand. Others argued that it was a progressive social policy in its own right, improving access to travel for those who would otherwise be unable to get around.

Not for the first time at a European event, I felt like the poor relation. Our Anglo-Saxon love affair with the market again results in a transport policy that is second-class at best. While public ownership on its own isn’t the complete solution, it would make joined-up solutions that much easier and remove the waste and inefficiency of the profit-driven model.

The not so 'Great Resignation'

There has been a lot of talk about ‘The Great Resignation’ in the media and HR circles. However, for some sectors, this is not new and certainly predated the pandemic.

I have been doing some HR work this month. If I thought the rail sector had its problems, sorry challenges, mentoring an HR director in the social care sector reminded me what real challenges are! Scotland’s health and social care partnerships (HSCPs) described the challenges of increased demand and staffing shortages as “unprecedented”. And that is reflected in the organisation I have been helping.

The available data does appear to show a general increase in workers looking for new jobs, even if the actual number of resignations are less dramatic. Surveys show a doubling of the normal rate, which at £25,000 a worker in recruitment and training costs, has cost and efficency impacts on employers.

There are several explanations for this ranging from COVID to Brexit. However, a US perspective in The Conversation highlights a different point. Most advanced economies have shifted from productive sectors like manufacturing to a service-based economy. This is significant for turnover because most jobs in service-based industries require generalised occupation skills that are often easily transportable across companies. This is true across various professions, from accountants and engineers to truck drivers and customer services representatives. Therefore, it is relatively easy for employees to move between companies and maintain their productivity.

This is not news in the social care sector, which has the additional challenges of low pay and a job that, while it has its rewards, can also be emotionally and physically demanding. I sat in on a discussion with care workers recently, and there was an obvious difference between older workers who said they would probably struggle on and younger workers who were actively looking for less demanding and better-paid jobs. This reflects my experience doing focus groups for UNISON over many years, and if anything has got worse. Looking at the recent UNISON Scotland survey, 96% reported that their workplace was suffering staff shortages and 90% were concerned about the safety of colleagues and service users. One-third were thinking of leaving, and 57% were close to burnout.

A lot of hope is being invested in the creation of a National Care Service (NCS). In the short term, this is misplaced as organisational change at this scale takes a lot of time. There are also other concerns about the Scottish Government’s direction of travel for the NCS, which I outline in the latest edition of Scottish Left Review. These include the scope of the new service, funding and centralisation. Even the workforce reforms are pretty vague when there is a broad consensus on these. The organisation I have been working with would welcome the reforms recommended in the Feeley Report.

One tricky HR issue we looked at was vaccination. I have to say that I struggle to understand why some workers in the sector refuse to be vaccinated. However, having been through this issue before with flu jags, I am not surprised. Many care workers still do not get sick pay (although there is a sticking plaster scheme in Scotland) and have to take unpaid leave if they experience any temporary side effects. More significantly, for those who are vaccine-hesitant, mandatory jags are likely to be the straw that takes them out of the sector. Despite my personal view, I am not convinced that compulsory vaccination as in England is the right approach. Mandatory vaccinations can only operate in a high trust environment that simply doesn’t exist in many parts of the sector. Persuasion, not pressure, and improving workers’ pay and conditions are the key factors to help to overcome vaccine hesitancy.

Working from home is not an option for care workers, but it has been an issue for HQ functions. A report to Glasgow City Council says office occupancy rates are currently less than half of the UK average, while transport occupancy rates are around 65-70% of pre-pandemic levels. This is already having an economic impact as I see many of the sandwich shops I used to frequent have closed. Most workers want some flexibility in their working patterns, and many employers recognise this with hybrid models of working. What many middle managers said was impossible before the pandemic has now become the new normal. It is not without its problems, and intrusive monitoring is one of them. I had an ‘interesting’ conversation with one middle manager who wanted to introduce such a system. Frankly, if you don’t trust your staff enough work without these, you really need to look at your management skills.

So, spare a thought for those doing some of the most difficult and challenging work in the post-pandemic world. It isn’t easy, and some joined-up public policy would help.