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, 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.

Thursday, 30 May 2019

Rethinking how to deliver budgets

Instead of just tinkering around the edges of the Scottish and UK budgets, we should radically rethink how to deliver them.

A couple of months ago I blogged about a new book by Katherine Trebeck and Jeremy Williams, 'The Economics of Arrival', which invites us to consider a future where economic progress might not mean endless growth. This involves not just changes in economic strategy but setting different budget priorities. 

The authors are not naive about the political challenges such an approach entails, and so they recommend an evolutionary approach. Having a bright idea is one thing, getting a government to do it is another. However, it would appear that at least one government is prepared to make some steps in this direction.

New Zealand's Labour coalition government has unveiled its "world-first" wellbeing budget. Straight out of the 'Economics of Arrival' play sheet, the Finance Minister said many New Zealanders were not benefiting from a growing economy in their daily lives, and this year's budget had been designed to address the increasing disparity between the haves and have-nots. Budget spending is focused on long-standing problems like mental health, child poverty and sexual violence.


Another interesting international development is Portugal, even if not strictly in the wellbeing sense. In return for a bailout, the European Union imposed privatisations and cuts in salaries, social security and services on Portugal – what we would call 'austerity', through a centre-right Portuguese government. 

A left-wing coalition government decided to take a different approach by scrapping austerity. Recently privatised companies were re-nationalised, the minimum wage rose by 20%, four national holidays were re-established, and pensions were unfrozen. There were some targeted tax cuts, although taxes went up on some luxury items. 

A new report on the economic effect of these policies says it achieved a return of economic growth. This was 4.3% in 2016/2017 after falling 7.9% during the austerity measures. Unemployment fell from 17.5% in 2013 to 7.4% now and the public deficit reduced from 3.1% of GDP in 2015 to virtually zero now – the UK’s deficit is 1.9% of GDP. Prime Minister Costa told the Financial TimesWe have shown that it is possible to raise incomes, lift private investment, cut unemployment and still have sound public finances.”

Of course, this is what many of us argued when austerity was implemented in the UK, but Costa has shown there really is a better way. With 14 million people in the UK locked into poverty, we could have adopted different policies. As the UN Special Rapporteur recently put it; “The imposition of austerity was an ideological project designed to radically reshape the relationship between the Government and the citizenry. UK standards of wellbeing have descended precipitately in a remarkably short period of time, as a result of deliberate policy choices made when many other options were available.”


Tax is an essential element of any budget, and there has been a debate about the impact of tax on reducing inequality.  A new report by the IFS says it does have an effect in conjunction with benefits. They said: “The tax and benefit system significantly reduce the gap between rich and poor, with benefits playing a particularly big role. However, contrary to the ONS’s claim, taxes do also reduce inequality. But the bigger picture is that what matters for income inequality is the progressivity of the tax and benefit system as a whole, and not a specific part of it. The Government should achieve its desired amount of redistribution using those parts of the tax and benefit system best suited to that particular job."


So, as we start the discussion about the next UK and Scottish budgets, let's have a look at the above evidence and think about a wellbeing budget that scraps austerity and reduces inequality. All we need is a bit of political will.

Monday, 29 April 2019

Putting the 'Public' back into Scottish Water

Scottish Water is a public corporation, accountable to Scottish Ministers and parliament. It was created in 2002 by a merger of three regional water authorities. This contrasts with the privatised service in England, which has seen high charges and massive payouts to shareholders and executives - not to mention running out of water. Scottish Water's average household charge is £1 a day lower than the average for England and Wales, despite having higher costs due to geography and structure.

This public service status needs restating because Scottish Water does not always act as a public service.

Scottish Water bosses have a nasty habit, internally at least, of referring to ‘The Company'. This is not only factually inaccurate but reflects a culture and a desire (from some board members and senior staff) to become one. Efforts to privatise Scottish Water are rarely far from the surface. Commercial interests lobby for it and political support is not entrenched as various back door attempts have been made over the years. At times, only the inability to recoup the capital investment in the sale price, which in any case would probably go to the Treasury, has kept the service in public ownership. If Scottish Water were a company its balance sheet and gearing would make it an attractive takeover prospect.


Then we have executive remuneration. The 2017/18 accounts state that the Chief Executive received £92,000 in bonus payments on top of his £256,000 salary. The Chief Operating Officer got a £67,000 bonus to supplement his £186,000 salary, while the Finance Director took home £66,000. The £225,000 in bonuses amounted to a near 7% rise on the top up payments enjoyed by the same three individuals twelve months earlier. The Scottish Government scrapped bonus payments in its pay policy some years ago but made an exception for Scottish Water. Needless to say, 7% pay rises are not the norm in the public sector, and senior pay is already one of the highest in Scotland's public services. 

The regulatory structure is also not appropriate for public service. Ministers set directions, but the regulatory cost system is very similar to the privatised system in England. The work of Jim Cuthbert and others have highlighted why this is not appropriate.

So, why does this matter and how would a different structure make a difference.

The Hydro Nation concept points to a much broader role for Scottish Water than only delivering water and wastewater services. Sadly, the high blown rhetoric at the launch was not translated into action act scale. A reformed Scottish Water could have a stronger international role, it could develop more significant economic spin-offs from our abundant water supply and expertise, support public health and have a more prominent role in renewable energy. It could also stop outsourcing critical services, developing in-house capability in Scotland as part of a broader industrial strategy.

The current governance structure would need to be changed. There are several options the simplest of which would be to create a Water Agency with a much broader remit, of which the utility function would be only one element. Under this structure, the regulatory role of the Water Industry Commission could be abolished with a considerable saving (£3.5m plus the mirror costs in Scottish Water). This approach would also eliminate the role of the Competition Commission and liberate its function back to Scotland. Retail competition in the non-domestic sector has resulted in few benefits, and the valuable water management role of Business Stream can continue to be delivered without so-called competition.

Another option some may argue for is a co-operative model, at least for the utility role and possibly other sub-streams. In the capital intensive water industry, any mutual body would in effect be controlled by the financial institutions. They would insist that to minimise risk to their money, services and jobs would be transferred to English and European private water companies. This is what happens at the only UK mutual model, Welsh Water. As a co-operator, if there were a viable co-operative model, I would welcome it. However, a mutual shell over a privatised industry is not a co-operative solution.

Across Europe, water services are delivered on a municipal rather than a national basis. In 2006, the STUC and water unions commissioned a paper from the University of Strathclyde and developed the ideas into a paper ‘It's Scotland's Water'. It argued for greater democratic oversight and citizen participation. Elements of this certainly could be delivered locally. Scottish Water was only created on a national basis because of the need to cross-subsidise the cost of providing services in rural areas. There are other ways of achieving this objective.


Water and wastewater services are something we take for granted. The right to water is a human right, and that right should be protected through democratic accountability. The current model of Scottish Water could be reformed to achieve much more economically with a governance structure that reflects a public sector ethos.