A New Deal for Scotland

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I spoke at the  COSLA  conference this afternoon. COSLA represents local authorities in Scotland. This was my second visit to their conference.  It was good to be invited back.

I emphasised during my presentation that in my opinion Scotland needed a cross-party New Deal to ensure it can face the challenges coming its way, with or without independence. There were my speaking notes:

  • The challenge
    • Scotland is at a crossroads
    • Devolved with some economic powers
    • Debating its own future
    • If GERS is to be believed running a strong deficit
    • If trade is to be believed in a good place
    • And I would say sitting on all the fundamental assets that make a modern economy
      • People
      • Education
      • Energy
      • Enterprise
      • Identity
  • The reality
    • There's a crisis coming
    • Externally
      • Brexit
      • A tottering world economy
      • A world without a plan
    • Domestically
      • An economy constrained by Westminster and the South East
      • In need of a plan of its own
      • And having to address the real issue that faces Scotland - that people in the country just don't earn enough because not enough has been invested in productivity in its economy
      • That's the beginning and the end of the Scottish economic crisis
  • There is €33 trillion saved in cash in the world right now (Allianz Global Wealth Report)
    • As they say, this is because the owners of that cash don't trust the financial products available to them in the market
    • These people would rather lose money holding cash then invest it in financial products
    • If you want the surest sign of the failure of current capitalism then this is it
  • At the same time Scotland is crying out for investment
    • To replace PFI
    • To fund new infrastructure investment e.g. rail infrastructure
    • To build new social housing
    • To create the renewable energy infrastructure for the country
    • To insulate existing housing stock
    • Whatever you want to add to the list
  • The question is how can that wall money that can't find a home end up invested in Scotland
  • First it needs a policy
    • To clear PFI
    • To create investment opportunities
      • Of any of the types noted
    • To create a structure for investment
      • Like an infrastructure bank
      • Nationally
      • Or regionally
  • And then it needs a financing mechanism
    • Like local authority bonds
    • Or national bonds
    • At low rates of interest
    • Backed up by government guarantee
    • And People's QE if necessary
  • And some incentives / sticks
    • Like a requirement that pension funds invest 20% of all their new member contributions in investments that deliver new jobs and technology within the UK
    • And the reduction of ISA incentives for useless cash and share based investments that deliver not a penny of new investment into the economy
    • And instead to have tax relief solely for new technology / green / job creation / social housing and infrastructure funds so that tax policy aligns with social need
    • Plus local accountability for the funds invested in this way - and yes, that includes a role for councils
  • And the backstop is People's QE
  • The political assumptions in this
    • I am assuming Brexit because I think we have to
    • I am assuming that there is a broad cross party consensus on the need for investment in Scotland - even though I know there will be difference on the detail
    • I am assuming that there is a willingness to create real economic powers for devolved and local government involvement in Scottish economic development
    • I am assuming Scottish parties will be willing to work together on a New Deal for Scotland on the basis of the threat Brexit and the economic crash it will create will bring to you
  • The political realities of this
    • I know how massive my assumptions are
    • But as someone who's not a Scot and not a party politician I'll say that this scale of vision is what the people of Scotland do, I am sure, expect of you
    • I want Scotland to grasp its own economic future - devolved or independent - and whichever party is in government here or in Westminster - and I can't see how it is going to face the post Brexit world without a plan like this
    • I'd suggest it falls to you to deliver it
  • There is a need for a New Deal for Scotland
    • I'd suggest that together you can make it happen