Making the right turns to find our way ahead
Copyright 2000 The Scotsman Publications Ltd.
Scotland on Sunday
June 25, 2000, Sunday
Rob Stokes
WHEN Henry McLeish and Jim Wallace launch The Way Forward on Thursday, the Scottish Executive's economic framework document will doubtless evoke the odd cry of 'heard it before'.
This would demean an important work which stands out in a number of ways even before we see details of what will be more a statement of long-term vision than a compendium of specific policy initiatives.
It is the first comprehensive exposition of how the administration in Scotland's new parliament views the tasks ahead as it seeks to make a sustainable difference to material and social well-being.
The lengths to which a small band of hard-pressed civil service economists and Henry McLeish have gone in collecting views is refreshing.
They could have e-mailed the usual suspects, then cobbled their views together with existing strategies from Scottish Enterprise and Highlands & Islands Enterprise. Instead, between December and March, the civil servants conducted nearly 40 seminars with up to 10 people at a time, across mainland Scotland and the isles.
The core issues will be about spreading the benefits of growth and closing the productivity gap with major competitors. Everyone hopes for some innovative thinking. There will be evidence of 'joined-up thinking'. For example, the launch of an adult literacy and numeracy initiative last week was incontrovertibly as much to do with economics as with personal development.
However, McLeish must not let the usual departmental and ministerial tribalism stand in the way. The Executive should establish a parliamentary economics committee, bringing together those whose remits impinge on development issues.
Neither the finance nor enterprise and lifelong learning committees in themselves cover all the angles that need reconciling if The Way Forward to a more productive Scottish economy is to be clear of institutional roadblocks at Holyrood itself.
IT IS also encouraging to see the setting up of a consultative committee on Scottish economic statistics. Here's what bum information can do. What is now West Wales & the Valleys was ravaged by industrial decline in the 1980s and 1990s. Yet no one thought then of shifting boundaries as has now been done so that this new economic 'region' qualifies for pounds 1.2bn in European Union funds until 2007.
Academics Gavin Cameron and John Muellbauer at Nuffield College, Oxford, know why. They have shown how divisions between south-east England and other economic regions were understated in the 1980s and right up to 1995. Statisticians compiling Regional Accounts underestimated incomes in south-east England because the Inland Revenue could not work out which economic regions 12% of its tax records applied to between 1979 and 1990.
It turned out that a disproportionate share were in affluent south-east England, thus reducing income per head measures in the south and overstating the relative position of the North and Wales. The problem has been sorted out, but the authors estimate that if West Wales and the Valleys had existed in 1988, it would have missed out on around pounds 130m a year in EU aid from 1989-93 and/or 1994-99. Arguably, poor stats meant no Bread of Heaven for almost a generation in the valleys.
Bum information is one thing, no information another. Economists in Scotland suffer from both. Education ministers in Scotland, Cardiff and London should have a serious word with research funding councils about the relatively low status attached to regional economic studies in the UK. Prestige journals, which academics must publish in to further their careers, should also take note. As the Scottish 'experiment' gathers pace, regionalism could become quite the thing in the UK as it already is on the continent.
You can email me at Gavin.Cameron@economics.ox.ac.uk
Last updated: 9 November 2003.
