We MUST act now ...or a generation of children will be out of work for life

IBELIEVE the best social policy ever invented is a decently paid job. Last month, globally renowned consultancy – run by a Scot – McKinsey noted the following:

‘Our analysis, based on occupation-level data, estimates that the Covid-19 crisis could leave up to 59 million jobs at risk in Europe – a staggering 26 per cent of total employment in the 27 member countries of the European Union, plus the United Kingdom.

‘The sharp rise in benefit filings might just be the tip of the iceberg. We estimate that up to nearly 59 million jobs (26 per cent of total employment) across Europe are potentially at risk of reductions in hours or pay, temporary furloughs, or permanent layoffs.’

Importantly, they noted that of the jobs most at risk – hospitality, food services and nonfood retail – 40 per cent of that demographic are aged under 25 and 80 per cent of those jobs are in low-paid employment – in other words the existing, and now, poor and the younger generation will be most impacted, dramatically increasing inequality.

So it’s now or never for Scotland; we must drive headlong into a potential unemployment tsunami and come out the other end having grasped opportunities, protected and grown new jobs and shielded the next generation from a lifetime of unemployment.

On Monday, Benny Higgins produced his report on what Scotland needs to survive and grow. It was a compelling piece of macro-economic analysis, most of which I agree with – but it missed one large point.

Small to medium-sized (SMEs) businesses will create more or less all the new jobs for our future in the next five years. I think they got one mention in the weighty report that was heavy on macroeconomic policy but light on detail and how to implement said policies.

But where it was bang-on was recommending some form of two-year employment guarantee for our young people, because their prospects of employment are all but gone as businesses react rightly to survive and some to grow.

If we don’t get our economy moving again, many believe the impact of unemployment will kill significantly more than Covid-19. So here’s the rub – this isn’t government’s problem, it isn’t businesses’ problem or the third sector’s; its all of ours.

Hence, we need to work out who’s good at what – businesses create jobs, governments don’t. Let the private sector flourish in partnership with government, let us lead in a partnership of trust. And most importantly, where business needs support, we should pay that back: we must have a shared responsibility to build a fairer economy for Scotland where opportunity prevails.

Benny Higgins noted that business does not believe the Scottish Government understands nor engages enough with the sector. The First Minister, to her credit, responded by saying: ‘If that is the view and a perception, then we have to recognise it as real and address it.’

Legacy

And address it we must if we are to rebuild Scotland’s economy in partnership as a collective, parking our differences, our silos and our selfinterests for the good not just of our nation but the next generation. My mentor, Vartan Gregorian, once said to me: ‘What is the legacy you will leave for future generations?’ It’s a question we must all ask ourselves now.

More or less every business in this crisis faces two brutal realities: increased operating costs and massively reduced markets. On the former, witness Amazon’s increased operating costs due to reconfiguring its workforce to accommodate distancing.

In the medium term, clearly this will enable real market opportunities to be capitalised upon and Scotland needs to look to that future, but first deal with today.

The public and private sectors must collaborate and trust one another to do the right thing for Scotland. And we need to balance health advice with the economic; two-metre distancing will kill hundreds of businesses and tens of thousands of jobs so we should not even plan for that outcome. The World Health Organisation recommends one metre. Westminster announced it yesterday but Scotland remains at two metres; we deserve to know the different science our First Minister is listening to.

The hospitality sector will act responsibly and one-metre distancing changes the economic dynamic for them; I would implore the Scottish Government to follow Westminster’s lead and deliver this for an industry in absolute turmoil.

For our part, our foundation has consulted widely with the entrepreneurial community on what needs to be done to kick-start our economy.

And, based on that consultation, submitted a paper summarising its findings to government and Lord Smith in early May. That paper has the benefit of perspectives from hundreds of businesses employing hundreds of thousands of people.

These are practical points mainly in the gift of the Scottish Government; actions that could be implemented more or less immediately. Now, to be clear, we are not saying we have all the answers. But we have some of them, as do those we consulted with.

The consultation we undertook highlighted multiple areas under the control of the Scottish Government and local authorities that could be enacted to support employment, protect it and accelerate growth.

That report is on our website, as is our response to the Higgins report in the interests of transparency (hunterfoundation.co.uk). But to give you a flavour, the collective recommendations from those we consulted with included everything from new forms of loans (repayable or convertible into equity) to establishing a national training academy similar to the Higgins report suggestion.

A number of the suggestions simply seek to build on known successes by scaling them up – Scottish Edge for one, where my foundation co-invests with government and Royal Bank of Scotland. And on that point in May we suggested it was scaled up, with £4million per annum from government supporting the potential highgrowth businesses that will drive jobs growth. In fact, so confident are we in it that we offered to give the funding back if it didn’t have the impact expected…

To be clear, my foundation is willing to put funds and expertise into this economic revival, as are many others I know.

Recovery

There are simple things we can do to drive an investmentled recovery; implement a fast-track planning permission process to drive construction employment and investment. You only need to ask James Watt at BrewDog about that – when he built his brewery in the US he paid for fasttrack planning and was granted it in two weeks. Here it took months; to what end – delaying construction and operational jobs to fulfil an outmoded planning process.

And we need to dramatically increase investment in social housing construction in all local authorities funded, one would hope, via pension funds and perhaps our new Scottish National Investment Bank. And we should address the timescales and delays on all public sector decision making – processes, bureaucracy and delays are costing jobs: risk profiles require amendment in this world we are confronting.

Of course, we in business are not blameless either and those that don’t play a fair and equitable game on tax, employment and ethics need to step up and stand up.

Lastly, Higgins puts education as a central pillar to recovery and I could not agree more. During this pandemic we have witnessed the good and the bad there – youngsters previously disengaged, engaging virtually; meantime others struggled. Digitisation offers massive opportunities for re-engaging and re-engineering our education system so it’s fit for purpose and not designed as ‘one size fits all’.

I love this country. I believe we have the ability as a small dynamic nation – a speed boat not a supertanker nation – to rebuild better and faster than any other nation if we believe, trust and partner in deploying all the assets we have.