Where’s the evidence?

‘Let the jury consider their verdict,’ the King said, for about the twentieth time that day.  ‘No, no!’ said the Queen. ‘Sentence first—verdict afterwards.’ (Alice’s Adventures in Wonderland).

Politicians have often followed the Red Queen’s approach: policy first, evidence later.

Alex Salmond, then First Minister, announced the Scottish Investment Bank to the STUC conference in 2010. A few days later the chief executive of Scottish Enterprise, where I was on the board, received an urgent request from civil servants: what would the SIB be; what would it do, how would it be funded?

I was an adviser to the UK Department of Business when Vince Cable, then Secretary of State, decided he wanted a British Business Bank. Again there was little or no analysis of the problem, let alone the solution – although I am sure civil servants were tasked with writing papers to justify the minister’s decision.

This time – with Nicola Sturgeon’s announcement of a Scottish National Investment Bank (SNIB?) – the job of justifying the creation of new institution is being given to Benny Higgins, chief executive of Tesco Bank. In the First Minister’s words he will ‘lead work on developing the Bank’s precise remit, governance, operating model and approach to managing financial risk.’

In other words, he will have to decide what the new bank will do. It looks very much like a solution looking for a problem. The Red Queen would approve.

Programme for government, or repacking mature brands

Civil servants are well used to handling this sort of ministerial whim. They simply rename something that already exists: thus the investment division of Scottish Enterprise was rechristened Scottish Investment Bank and Capital for Enterprise was rebranded as the British Business Bank.

There are usually some cosmetic changes – a new logo and sometimes an announcement of extra funding (occasionally real, often not) – but essentially the good people running these organisations carry on doing what they would have done anyway, but under a new banner.

So it will be with the SNIB. What it will do differently from the Scottish Investment Bank, Scottish Enterprise and the Scottish Futures Trust remains to be seen. And how will it relate to the new ‘strategic board’ (whose chair, PR woman Nora Senior was announced recently) which is to oversee the existing enterprise and skills agencies?

The Programme for Government is full of detailed initiatives to support and encourage everything from manufacturing in the West Highlands to tourism in Ayrshire. Mostly it is a description of what is already being done. Anyone familiar with marketing will recognise the repackaging of mature brands, an established means of giving tired products a longer shelf life.

On course for the iceberg

Meanwhile the underlying problem of the Scottish economy remains unanalysed and unaddressed by government. Yet it is serious, deep seated and renaming the deckchairs will not change our course towards the iceberg.

Great comfort is taken from the fact that unemployment is low and that Scotland has ‘competitive advantage’ in the technologies which will shape the future. If this is the case then why is our productivity mediocre by international standards and our growth so fragile?

A succinct summary of Scotland’s economic problem was given by Professor David Bell of the University of Stirling to the Goodison Group in Scotland. The discussion was under Chatham House rules, but I have his permission to describe his presentation.

He started from the proposition that by 2030 we wanted to live in a “fair, just and stable political environment with a strong economy.” Not very different from the First Minister’s ambition ‘to build a modern, dynamic, open economy which benefits everyone in Scotland.’

But Professor Bell then did a very unfashionable thing: he looked at the evidence to see whether we are heading in that direction. His conclusions were not encouraging.

Falling behind our competitors

Research had shown that cognitive skills were vital to the development of a vibrant economy. Schools had a crucial role in the formation of skills, although other influences, such as home environment and the demands of the labour market were also important.

Yet in Scottish schools we were falling behind our competitors (including England) in basic skills such as proficiency in science, maths and reading. We were still around the OECD average, yet the number of countries doing better than us was increasing consistently. Even if we have competitive advantage now, on this trend we will not keep it.

This echoes the experience of some businesses. The engineer Jim McColl has established his own secondary school in Glasgow in an attempt to reverse some of the failings in the education system. The car dealership Arnold Clark has also expressed concerns about the quality of applicants for jobs.

Add to this the general UK economic weaknesses which Scotland shares, such as an over-dependence on debt financed consumer spending, poor productivity and Brexit, and the particularly Scottish issues such as the decline of important high-value industries such as oil & gas and financial and business services, and the picture does not look encouraging.

There is a section in the Progamme for Government on education and we are promised a Bill empowering headteachers. This may do some good if it is accompanied by genuine and significant new resources. But will it be enough to reverse a trend which now looks entrenched?

An investigation of the problem should logically come before the implementation of the solution. But that is not the way politics works.