We have an economy that most people don’t trust to work for them
Earlier this month, Shell announced that they had made their largest-ever profits. History will surely look on in bewilderment that a fossil fuels company was able to make record profits as a result of an illegal invasion during a climate emergency while millions struggled to heat their homes.
These sorts of contradictions are not lost on people in Scotland. In recent polling by the Diffley Partnership, more than 4 in 5 people disagreed with the idea that the economy works “for most people”.
The political debate at both a UK and Scottish level generally overlooks this consensus. Paired with a fairly bald assumption that growth benefits us all – that a rising tide lifts all boats, ignoring the fact that the millions of people don’t own boats and the rising tide is starting to be a problem.
In Scotland discussions about the economy have become bogged down. That more traditional view pervades our current meander between concepts such as inclusive growth and a wellbeing economy. They rightly speak to an economy more concerned about our collective wellbeing and the realities climate change. Yet even the most passionate advocates of these concepts would admit that we are failing to create change as hopeful as the concepts.
The present economic doldrums require us to pause and think why? To me we’re letting down public disappointment in the economy by failing to make the debate meaningful to people’s day-to-day lives.
We need to agree on the basics.
Firstly, that the economy is not something distinct from public and third sector services. Business is not “the economy” and public and third sector services “the wellbeing economy”. If they don’t work together, neither work. The mental health crisis we face at the moment is a stark reminder of this.
Secondly, human beings like innovating, learning, being enterprising and working with other people to achieve and build things. Profiting from ideas or providing things for people is not inherently a bad thing. What is bad is when that profit is horded and made at the expense of those who work to produce it as is regularly the case now.
Next, work should not be the only route out of poverty but for most people it should be an effective protection from it.That is far from the reality today.Recent social security reforms have pushed more people into work, but those jobs are largely part-time and poorly paid. Those jobs serve to limit people’s earning ability in the future, not just while in the grip of the universal credit system.Work is not a guaranteed route out of poverty at the moment and until the gains of that work are shared more evenly, it won’t be.
Finally, tax is merely part of the story not the silver bullet. Tax can, and does, redistribute income from those with more to those with less. But that redistribution only happens through spending choices that favour those with the least – otherwise it is just shifting the deck chairs. We also need to think beyond the current system – much of our wealth is in housing that escapes significant taxation yet many children live in temporary accommodation.
What, then, are the solutions?
Part-time work needs a rebrand and redesigned. It is dominated by women and, almost certainly as a result of that fact, predominantly low paid. Partly leading to men paying 70 per cent of income tax in Scotland, a shocking indictment of our jobs market’s impact on women.
One way to change that is to embrace and promote part-time work and things like job shares to individuals, including men, and employers. This needs to include how some full-time work is redesigned to facilitate it. The benefits to employers are multiple but the most immediate is the ability to tap into a new pool of possible workers. But there has to be a mutual benefit.
Employers cannot continue to treat part-time employees as a second-class concern. Good pay, good conditions, promotion opportunities, job-shares must become the standard in doing so they will help retain talented staff as their life circumstances change.
In this context, sectors who rely on cheap, flexible labour need to realise that they are in as fragile a position as sectors who rely on fossil fuels. And it is incumbent on those of us who believe in both the goal and the potential of a fairer economy to work with business to put a harder nose on the benefits to them and our society.
In the government space, we need a ban on strategies, actions plans and legislation aimed at culture change from the Scottish Government. Community Wealth Building and concepts like a 15 minute community could really benefit places in Scotland. Inform people, empower people, fund people long-term – all in the time you could’ve written, consulted on and published a strategy.
Finally, the Scottish Government needs to actually get on with delivering a Minimum Income Guarantee. In many ways it is the key to unlocking many of the blockages in our economy. Supporting parents of young children to re-enter the jobs market from solid foundations, rather than tired and poor. To support entrepreneurs and workers without access to the bank of mum and dad to take more risks. And to redress the generations’ old taking for granted of unpaid work, predominantly done by women, in our society.
At the moment we have an economy that most people don’t trust to work for them, a country where a million people live in poverty and where indoors has suddenly be rebranded as a “warm bank”. We can, and surely must do better than this – it seems most people want us to.
As John Lennon once sort of said “you may say I’m a dreamer, but I don’t think we have any other choice”.
Chris Birt is associate director for Scotland for the Joseph Rowntree Foundation. He will be speaking at our event, Transforming Scotland's Economy. To book your place, click here