Scottish Economy

Parties must consider inequalities widened by Covid and not exacerbate harm

The Scottish election is coming on May 6. With so much going on in Holyrood in the last few weeks, anyone following events will probably feel like they need a lie down rather than getting geared up for an election.

Many will hope that we’ll be discussing substantive policy matters over the next six weeks. There are a range of issues that are of critical importance to Scotland over the next parliament.

One issue that we know will break through, of course, is the debate over the constitution. Important questions over a future economic case for independence – touching on currency, trade, and public spending – need to be reckoned with but it is unlikely that the election arena will be conducive to such detailed discussion. That will most likely be pushed back to the next parliament, if another referendum goes ahead.

One of the legacies of the 2014 referendum was the devolution of more powers to the Scottish Parliament, particularly over tax and benefits. In this campaign we can hear from parties on how they would use these new fiscal powers.

Of course, income tax in Scotland looks very different now to how it did at the last election and a new benefit payment to low-income families with young children is (just about) up and running. These have largely been progressive changes and with more powers over carer and disability benefits due to be operationalised in the next parliament, more could be to come.

And yet the troublesome council tax remains in place, widely agreed to be unfair due to being regressive and out of date. Promises at further reform remain hanging.

Of course, the pandemic will still be placing huge restrictions on our lives and the economy by the time of the election. The pandemic has, in many ways, exacerbated inequalities that were prevalent in Scotland pre-pandemic. In talk about rebuilding the economy, parties should consider the harm that Covid-19 has caused and set out proposals on moving forward in a way that doesn’t exacerbate these harms further.

There are a number of other long-term challenges for the Scottish economy that have not gone away – whether on climate change or the ageing population.

Continuing progress towards climate change targets is of crucial importance to Scotland and its economy, and with the delayed COP 26 due to happen in Glasgow later this year, all eyes will be on Scotland. There are difficult decisions to be grappled with in terms of how to prioritise action on reducing carbon emissions.

On child poverty, there is a set of interim targets that need to be met this parliament. The likelihood is that big investment will be required to get there, with the social security system likely to have to step up further.

Related to poverty of course are other key ambitions of the current Scottish Government, including improving attainment and reducing the attainment gap. The report published earlier this week by Audit Scotland shows there are still challenges to grapple with: challenges that have been made worse by the pandemic.

Many big issues for the future of Scotland’s economy are there to be discussed – let’s see how many of them are discussed in the midst of all the inevitable politicking.

At the Fraser of Allander Institute we will be putting out a range of content on the election that rises above the politics and focusses on the policy issues and analysis of the latest data.


Picture of Mairi Spowage, director of the Fraser of Allander Institute

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.