As I See It
Bad marks for Osborne and Dugdale
It has been a bad day on the political campaign trail. Not only have we have been fed the nonsense of George Osborne’s “£4,300” price of staying in Europe, there also has been another knee-jerk policy announcement from Scottish Labour which needs to be nipped in the bud.
Mr Osborne’s declaration that Britain’s economy would shrink by 6.2% within 15 years if Britain opts out of the European Union is the key conclusion in a 200-page report from the Treasury.
“This is more than a third of the NHS budget and equivalent to 8p on the basic rate of income tax,” said Mr Osborne, adding that the diminished economy would be equal to £4,300 per household.
This may prove to be true. But we might also discover there is a monster at the bottom of Loch Ness. Predicting the future is notoriously difficult, and prone to surprises. Mr Osborne ought to know this better than most given that he was confidently predicting growth in the economy only five months ago in his Autumn Statement and hurriedly reworked his forecasts in time for the March Budget. Does anyone really take his figures seriously?
The commentator Fraser Nelson goes so far as to accuse the Chancellor of deception and delivering statistics which are “intellectually dishonest”. This is strong stuff, stronger even than the robust criticism Mr Osborne has received from the Leave campaign which simply called his predictions “absurd”.
Whichever way you put it, and whether you are for staying in or pulling out, data such as this needs to be treated with utmost caution.
Dugdale in Wonderland
As for the Scottish Labour leader, she has once again been inventing policy on the hoof. This time she wants to restructure Scotland’s biggest economic development agency, Scottish Enterprise, by merging it with Skills Development Scotland.
Daily Business spoke to Jack Perry who was head of SE at the time when these two were separated. He was apoplectic at any suggestion they be reunited.
On the face of it, merging skills and training with economic development may seem a reasonable idea. But Skills Development Scotland has to deal with a number of issues such as literacy and drug abuse which, while being important social concerns, were proving a huge drag on SE’s effectiveness.
As Mr Perry told me, the agency could get a call from someone needing transport organised for an individual, or be faced with demands for teaching aids to help those struggling to get into work. All of this needs to be addressed, but an economic development agency whose objective is driving growth and attracting investment cannot be distracted by having to devote resources to these matters.
During Mr Perry’s tenure this distraction was a big problem which led to criticism of the agency’s effectiveness. With the backing of the politicians of the day he succeeded in paring SE down to its core function. Ms Dugdale should note that since then it has worked more successfully and smoothly than at an time in its 20-odd year history.
Ms Dugdale is either ignorant of what led to the division of roles, or else is taking a somewhat cavalier approach to economic management.
A niggling worry about the Labour leader’s plans is that they are not so much designed to improve the performance of the agency (which is better without political interference) as a sop to the trades unions who would get a bigger role in its operation.
Labour is trying to win back core supporters who deserted it for the SNP. Using agencies such as Scottish Enterprise to lure them back in to the fold is not the most sensible way to go about it.