Economic growth: Growing what, and for who?

Yesterday, John Swinney said that he plans to “rewire the Scottish state”. But in the year that his government legislated for a new economic model in Scotland – community wealth building – his programme for government missed the mark when it comes to rewiring the economy, too. The narrative of economic growth was baked into the heart of his programme, but what is missing is an explanation of how he will channel the proceeds of growth differently, so that they can be shared fairly, and actually make a tangible departure from the failed supremacy of trickle-down economics.

Instead, the language of “rewiring” was reserved for governance, including moves to redesign the size and shape of local government. As those changes are designed and decided upon, it will be incumbent upon ministers to ensure that they strengthen rather than weaken local government’s proximity and ties to the communities it serves.

That said, the programme for government sets out that “community empowerment and community wealth building will remain at the heart of a new model of governance”, and this is to be welcomed. So too is the fact that community wealth building was explicitly mentioned in the ‘growing the economy’ chapter as a means to “strengthen local supply chains and create jobs in local communities” (even if its purpose stems far beyond just procurement and jobs) as well as a commitment to a new Social Economy Strategy to strengthen the parts of the economy that strengthen our communities.

There were some other interesting nuggets too – the proposed £2 bus fare cap, alongside a proposal to consult on legal price ceilings for some essential food items are significant economic interventions that target the high cost of living facing so many of us in Scotland. They matter because they mitigate a problem people are experiencing right now, but what’s missing is the groundwork to change how the system works so that they don’t need mitigating in the future. Take buses. The fare cap will retain money in the pockets of many on the lowest incomes, but we need to look at who controls services so that public investment in our buses works as hard as possible for people who use them. I’ll be asking these questions of the forthcoming Better Buses legislation. On food, too, capping food prices to take the heat off household budgets is important right now – but there remains work to be done to change who really has power in our food system.

To understand what the programme for government is missing, we need to zoom out and look at the big picture. When we do this, we see that we’ve lost any mention of a wellbeing economy, or our National Performance Framework. Instead, we have the language of economic growth, 17 times in fact. There is mention of a new Council for Economic Growth, a Major Projects Office, a High Growth Unit alongside six priorities for growth led by making Scotland “a better place to invest and do business”. Community wealth building in this context is being touted as a regional delivery tool, not as a potentially transformative opportunity to rewire the economic system.

John Swinney said “economic inequality exacerbates inequality throughout society. It undermines cohesion.” And he is right. We can point to examples the world over. So to focus on economic growth for “good jobs and successful businesses and stronger communities” without meticulously setting out how he will ensure that growth reaches the people who need it most using institutions, ownership models and more, is at best shortsighted and at worst not learning the lessons of our own history.

This programme for government has been billed as a programme for government to tackle child poverty. But in a context of a focus on economic growth and not on actively connecting wealth and communities, I think we have all been around too long to know that we won’t make the progress we need to. Trickle-down economics does not work and, although we might be sprinkling some of the right ingredients into the economic mix, we’re not baking them altogether to truly put an end to it. Yes, there were good concrete actions which can and will impact children’s lives – from cost-of-living measures, employability, childcare and housing opportunities. And these are all welcome. But the logic of the programme for government does not follow all the way through to deliberately intervening to connect wealth to families who need it most.

We know from our research that community wealth building, alongside housing, employment, welfare and cost-of-living measures can form part of the activity needed to have positive impact on child poverty. But there is no mention of community wealth building in that context in this programme for government – which even the child poverty delivery plan ‘Bringing Hope, Building Futures’ does mention. It leaves me wondering, if the government’s defining mission doesn’t even draw on the opportunity it has legislated for, does it even understand what it can do?

And that for me is the nub of my response to this programme for government. The Scottish Government has created an opportunity with its community wealth building legislation to rewire the economy for sustainable and inclusive growth. But I am not sure it really understands the true potential of what community wealth building can do, or how deep that potential runs. If it had, it would have been ambitious about setting out who will own, shape and benefit from growth – and unwaveringly set out how.

Naomi Mason is head of Scotland at CLES