Author: MICHAEL SETTLE
HOLYROOD should have control over immigration, have £15 billion more in borrowing powers and could get more tax powers as part of a plan to create a new economic settlement for post-Brexit Britain.
These are among the recommendations of the IPPR’s Commission on Economic Justice, whose members include Justin Welby, the Archbishop of Canterbury, and leading UK figures from business, trade unions and civil society, and which insists the economy is not working and needs “fundamental reform”.
The Commission’s final report, “Prosperity & Justice: A Plan for the New Economy,” concludes two years of research and consultation across the UK.
It notes how publication comes just before the 10th anniversary of the financial crisis since when real wages and the living standards of tens of millions of Britons have stagnated, young people have seen their life chances deteriorate and the economic gulf between London and the South East and the rest of the country has grown wider.
The report says in Scotland economic performance has improved since devolution with the nation moving from among the worst economic performers across the UK to now the “best of the rest” outside of London and the South East.
However, it also points out that in recent years economic performance has been poorer in Scotland than the rest of the UK with poor productivity growth and business investment notably below the UK average.
Among the 73 recommendations in the Commission’s 10-year reform plan are:
*an immediate increase of around £1 an hour in the minimum wage to the Real Living Wage across the UK with a requirement that all those on zero-hours contracts should be paid 20 per cent above the higher rate along with a package of measures to revitalise trade unions;
*a decisive shift to investment-led growth with an industrial strategy supporting a “new industrialisation” to boost the UK’s exports and close the trade deficit backed by a new National Investment Bank working alongside the proposed Scottish national investment bank and by raising public investment by £15bn a year to 3.5 per cent of GDP;
*the devolution of immigration powers to Scotland and the other UK nations to help bring immigration policy in Scotland in line with skills and economic policy and to respond to Scotland’s specific demographic needs;
*more borrowing powers for the Scottish Parliament worth up to £1.5bn a year and a total of £15bn and
*the possible devolution of further tax powers to Scotland, including National Insurance employee contributions, income tax on savings and dividends and capital gains tax, which would be worth a total of more than £4bn per year.
The Commission argues that there needs to be a rebalancing of economic power across the UK economy: from corporate management towards workers and trade unions; from dominant companies towards entrepreneurs and new market entrants; from short-term financial interests towards long-term investors; from Westminster towards the UK’s nations and regions and from individuals and households, who own great wealth, to those who do not.
Mr Welby said: “For decades the UK economy has not worked as it should with millions of people and many parts of the country receiving less than their fair share. The widening gulf between rich and poor, and fears about the future among young people and their parents, have damaged our nation’s sense of itself.
“Our report shows that it doesn’t have to be like this. By putting fairness at the heart of the economy, we can make it perform better, improving the lives of millions of people. Achieving prosperity and justice together is not only a moral imperative, it is an economic one,” he added.
Commission member Mary Senior, Scotland Official of UCU Scotland, said: “It’s time for a fundamental rethink of our approach to the economy across the UK.
“Scotland has seen progress on the economy but this has stalled in recent years. The Commission outlines an alternative to current stagnating living standards and massive inequalities across the UK. A better deal for workers in Scotland and across the UK is possible and will allow us to build a stronger, fairer economy.”