The People’s Recovery: A different track for Scotland’s economy

Roz Foyer introduces the Scottish Trades Union Congress’s response to the COVID calamity.

We face the biggest economic crisis in living memory. The immediate cause may have been Covid-19, but the virus drew its strength from a generation of injustices. Coronavirus may not technically discriminate on class lines – but its effects are clearly exacerbated by inequalities in income, wealth and power. When we speak of recovery, we do not mean reverting to 2019. We mean recovering, for working class people, the income, wealth and sense of collective purpose stolen from them by decades of political bias towards the rich and powerful. This is where we take issue with the Scottish Government’s response. For all the welcome rhetoric of government intervention, we must also abolish the built-up conditions that made this crisis so virulent in the first place.

Mass privatisations, short-term investment and dominance of multinationals placed workers in a position of weakness exacerbated by attacks on unions. This has led to the growth of precarious work through bogus self-employment, zero hours contracts and unwanted part-time working. Nearly 50 years after the Equal Pay Act, the gender pay gap remains while workplace injustice is a daily fact for BAME and disabled workers, and both groups have suffered disproportionately from the coronavirus crisis.

Alongside this, we have lost the power to guarantee basic rights such as good quality affordable housing, a living income for the sick or unemployed, and a dignified care system for young and old alike. According to data from the Sunday Times Rich List (May 2020) and the ONS Wealth and Assets Survey (January 2020), this has led to Scotland’s two richest families now having as much wealth as the poorest 20% of the population.

The private sector has shown itself woefully inadequate to meet the challenge of the crisis and there is no prospect of a green recovery without massive public sector intervention. But this public sector intervention must come with conditions. In return for financial support, employers must provide fair work and recognise unions. In areas such as health, care, education, energy and housing, we need to rebuild public services and democratic public ownership. While the Scottish Government’s Programme for Government offers the potential for fundamental reform in care and the introduction of a National Care Service, on topics such as rent controls, wealth taxes, public ownership, collective bargaining, and state support being conditional on fair work practices, it has little or nothing to say.

Ahead of the 2021 Scottish elections, The People’s Recovery: A Different Track for Scotland’s Economy combines short-term measures to rebuild our economy with medium and longer-term measures to create a democratic and green economy and a society in which workers and their families have fair work, decent housing and a proper safety net. It calls for a fundamental rethink on the purposes of growth and the introduction of a number of urgent measures.

Roz Foyer is the general secretary of the Scottish Trades Union Congress (STUC). The full report can be found at

Industrial democracy and fair work

We need to make the Scottish Government’s Fair Work policy a reality and give meaning to its laudable aspirations. With the pandemic having already radically altered work patterns, the guiding principle should be to give workers greater control of their own labour and their own data. We need a four-day week with no loss of pay, so that rising productivity enables full employment and greater leisure. We should regulate home working so that it becomes a system of greater freedom rather than one of employer control, cost-cutting and surveillance. Central to this should be the concept of industrial democracy and a fairer distribution of the costs and benefits of work. Strategies to eliminate poverty must address the workplace conditions that produce low pay. All this means we need to:

● Devolve employment law, remove curbs on union freedom and give right of access to unions to all workplaces. Strengthen employment rights and make them legally enforceable from day one in order to end precarious work in all its forms, including through zero-hours contracts, umbrella contracts and bogus self-employment.
● Implement an immediate £2 pay rise for all key workers and raise the national minimum wage to £10 an hour.
● Introduce sectoral collective bargaining agreements in childcare, social care, hospitality and tourism.
● Only provide government funds – through procurement, contracting and commissioning – to employers that recognise unions in their workplace and apply union negotiated rates of pay. Place effective voice at the heart of corporate governance and encourage sustainable and ethical business models.
● Establish regional and sectoral forums to provide economic information to workers, trade unions and citizens to enable them to organise workers and engage in local economic development.

Green recovery

A Just Transition to a low carbon economy remains a slogan rather than a reality. Markets, corporate slogans and individual behaviour change are no means to achieve either social or environmental justice. The Scottish Government has adopted the language of a Green New Deal but not the reality of it as it promotes ‘market-ready projects’ by offering ‘strong commercial returns’ to private capital. A just, green future can only be built on public investment, democratic ownership, and a strong domestic supply chain, beginning with energy and transport. All this means we need to:

● Fund an emergency green infrastructure stimulus to support Scotland’s economic recovery, including a comprehensive housing building and deep-retrofit programme to drastically reduce building emissions and tackle fuel poverty and support public transport while usage recovers. Invest in local authority led public works programmes and apprenticeships to provide meaningful employment opportunities to support and upskill young workers in new jobs.
● Require local content in all green energy leases and planning consents, shortening supply chains and providing manufacturing jobs in Scotland.
● Establish a publicly owned energy company and publicly owned construction and infrastructure company to drive forward green energy development and strategic infrastructure while supporting high health quality employment.

Democratic public ownership and community wealth building

Decades of political sloganeering established the principle of ‘private good, public bad’. Yet the banking and coronavirus crises served to illustrate that businesses are substantially dependent on public investment. Yet, too often, state intervention has been bailouts for shareholders paid for by cuts to public services. But public ownership has a positive, entrepreneurial role. High-tech, innovative products rarely emerge without massive public subsidy. This means addressing the gaps in accountability that have allowed privatised firms to ignore democratic norms. And it means ensuring that public ownership increases the autonomy and power of workers. There have been welcome moves to public ownership in Scotland, but these remain small scale and focused on bailing out failing enterprises. A strategic approach to address climate change and unemployment would involve developing profit-making enterprises. To address the decline of regional town centres, and to ensure wealth does not flow out of our communities but circulates within them, we should draw on the concept of community wealth building. All this means we need to:

● Establish a publicly owned energy company and publicly owned construction and infrastructure company to drive forward green energy development and strategic infrastructure while supporting high quality employment.
● Support community wealth building initiatives by providing greater powers and funding to local government to insource local services and address issues of corporate control.
● Create a Scotland wide Highstreet Taskforce to regenerate towns, protect jobs and improve shared community space.

Public Finance and investment

Public services have been neglected, regional economies have declined, and firms have put short-term profits over research and development. These problems existed long before 2008, but austerity made matters much worse, leaving a run down and divided society. But now traditional limits on public spending and investment have been abandoned. Superficially, the political consensus has moved towards job guarantees, infrastructure projects and support schemes for businesses. However, this will not be enough to put our economy back to normal. All this means we need to:

● Rebuild tax: Introduce wealth and progressive income taxes to address economic inequality.
● Rebuild borrowing capacity: Devolve borrowing powers to the Scottish Parliament to allow it to pursue expansionary economic policies and restructure our economy.
● Rebuild investment: Enable the Scottish National Investment Bank to invest in a more socially just, resilient and low-carbon economy, via state holding companies and public sector companies such as Lothian Buses. Reverse the cuts in local authority funding and offer a debt amnesty for Scottish councils as part of a package of measures aimed at easing the financial crisis facing Scotland’s local authorities.

Equality for all

The effects of coronavirus do discriminate against certain groups, be they BAME people, women, disabled workers, the young or those from the LGBT+ communities. All this means we need to:

● Devolve equality and employment law and ensure a day one right to flexible working for all workers.
● Take action to reduce the disability employment and pay gap and the race and gender pay gaps, including through introducing sectoral bargaining arrangements in sectors such as care and hospitality, where women and BAME women are over-represented. Ensure 10% of all apprenticeships go to disabled workers and ensure proportionate numbers of women and Black and minority ethnic people access job guarantee schemes.
● Rebuild equality in pay: Conduct an equal pay audit across the public sector in Scotland and resolve all outstanding equal pay claims.

Social security and housing

Damaging welfare reforms were forced through by governments intent on rolling back social security regardless of the costs. The sick, unemployed and vulnerable have been effectively criminalised and forced onto society’s margins, subsisting on meagre benefits and faced with arduous and humiliating means tests. Social housing has been transformed by deliberate government policy from a normal fact of everyday life into an emergency system for isolating the extremely poor and vulnerable. Responsibilities have been passed down to private individuals and private firms. The results are growing homelessness, exorbitant rents and a generation of younger people forced to live with parents into their thirties. All this means we need to:

● Provide a Minimum Income Guarantee for all. Raise the weekly level of statutory sick pay to £320 a week and removing the lower earnings limit, end benefit sanctions and the benefit cap, replace the Work Capability Assessment with NHS medical assessments, and end the DWP’s target-based culture and the outsourcing of contracts to the private sector. Enshrine in law a right to access healthy, affordable and nutritious food and properly fund public services to do this.
● Redistribute working hours across the economy through a 4-day week with no loss of pay. Provide opportunities for young people and those out of work, paid at the real living wage or union bargained rate for the job by augmenting Job Guarantee schemes with local authority led public works programmes.
● Massively expand the supply of publicly owned housing through municipal housebuilding and protect private renters with rent controls.

Universal public services

Austerity has left our public sector poorly equipped to plan for and deal with emergencies. Systems for supplying and distributing PPE and testing have been found seriously wanting. Thousands of people in care homes have died, with almost half of all of Scotland’s deaths being in care homes. For those facing a sudden loss of income, a lack of social security advisers has meant lengthy waits to access social security support. All this means we need to:

• End outsourcing across public services and properly fund health, education, emergency services and central and local government recognising their essential role supporting a wellbeing economy.
• Create a National Care Service, rooting out for-profit care provision and levelling up terms and conditions through collective bargaining.
• Commit to publicly provided early learning and childcare. Value teachers by reducing stress and over-working. Support Universities and Colleges with a support package which enhances democratic accountability and fair work practices.