In the final episode of our Key Figures series Mairi Spowage speaks to Professor in Economics at the Adam Smith Business School, and previous director of the Fraser of Allander Institute, Graeme Roy.
Transcript
00:00:07 Mairi Spowage
Hello and welcome to the latest Fraser of Allander podcast.
00:00:11 Mairi Spowage
This is one of our series of interviews with former directors of the Institute, which we’re putting out in advance of our conference in the middle of September to celebrate our 50th birthday as an Institute.
00:00:24 Mairi Spowage
It’s been really useful to have these conversations to reflect on the different roles the Institute has had over its 50 years of existence,
00:00:32 Mairi Spowage
the ups and downs and the sort of economic conditions when different people were in charge of the institute.
00:00:39 Mairi Spowage
I’m delighted to say today I’m joined by Graeme Roy, who is my predecessor as director of the Fraser of Allander Institute.
00:00:47 Mairi Spowage
So welcome, Graeme, and thanks for speaking to us today.
00:00:50 Graeme Roy
Hi, Mairi.
00:00:51 Graeme Roy
Yeah, brilliant.
00:00:52 Graeme Roy
Thanks very much for the invitation.
00:00:54 Mairi Spowage
So as if the sorts of folk who listen to our podcast have probably heard of you before, Graeme, given, we’ve got lots of loyal listeners and you obviously featured in some of our podcasts when you were director, when we started podcasting.
00:01:11 Mairi Spowage
But for the uninitiated,
00:01:14 Mairi Spowage
let’s hear a bit about you and your sort of current role and maybe a bit about, your journey into economics even and how you’ve ended up where you are.
00:01:23 Graeme Roy
Great.
00:01:23 Graeme Roy
Well, thanks, Mairi.
00:01:24 Graeme Roy
Yeah, that is the first thing I would say is it’s nice to see the podcasts a lot more professional than when we first started them those years ago.
00:01:32 Graeme Roy
So, yes, I’m currently Professor Economics at the University of Glasgow and I’m also Chair of the Scottish Fiscal Commission, so Scotland’s independent budget authority.
00:01:44 Graeme Roy
And a bit about my background.
00:01:46 Graeme Roy
So I did economics at university and my PhD was actually in fiscal devolution.
00:01:52 Graeme Roy
So I’ve never really kind of moved on too much.
00:01:55 Graeme Roy
In all those years, I spent about nine years in government and working in different roles as an economist, again, particularly on things like fiscal policy and the budget.
00:02:07 Graeme Roy
And it was that kind of stuff and that interest that led me back to the Fraser of Allander.
00:02:14 Graeme Roy
I’d been there for a year just after I’d finished my PhD, came back to the Fraser and then was there up until kind of halfway through the pandemic, I think was about my time.
00:02:26 Graeme Roy
after we recruited a new starting director and then moved over to Glasgow and I’ve been there ever since.
00:02:33 Mairi Spowage
Yeah, and just for full disclosure, Graeme and I also worked together at the government.
00:02:37 Mairi Spowage
So it seems like I’m following you about, Graeme, a bit.
00:02:40 Mairi Spowage
But yeah, it’s interesting you said you worked at the Fraser a little while after your PhD.
00:02:45 Mairi Spowage
What did you do when you came at that point in your career?
00:02:49 Mairi Spowage
What were you working on?
00:02:50 Graeme Roy
So I had a postdoc.
00:02:52 Graeme Roy
So when I finished PhD, I got a postdoc.
00:02:55 Graeme Roy
with Peter McGregor.
00:02:57 Graeme Roy
So another person.
00:02:58 Graeme Roy
So you might think that you’re following me around, I’m following Peter around because I took over director from Peter.
00:03:04 Graeme Roy
So Scotland’s a small world in terms of economics.
00:03:08 Graeme Roy
And I’d actually, as I said, just finished my PhD in fiscal devolution.
00:03:14 Graeme Roy
And at that time, fiscal devolution in Scotland looked very different to what we have now.
00:03:18 Graeme Roy
And it was trying to look at what other countries have done around things like tax autonomy and spending autonomy.
00:03:26 Graeme Roy
And my postdoc was really an extension of that.
00:03:30 Graeme Roy
It was during that time and nothing to do with Peter and the supervision and support I had, but I decided I didn’t want to be an academic.
00:03:36 Graeme Roy
So I left to join the government.
00:03:38 Graeme Roy
And then after about nine years in government, I decided I didn’t want to be a civil servant and came back into academia.
00:03:44 Graeme Roy
So I’ve had a bit of a bouncing around.
00:03:47 Graeme Roy
But the one thing that stayed, I guess, constant has been kind of interest in the Scottish economy and fiscal devolution.
00:03:53 Mairi Spowage
That’s really interesting.
00:03:54 Mairi Spowage
And perhaps we, maybe not for the podcast, but it’d be good to discuss whether your research on fiscal devolution had envisaged the fiscal framework and block grant adjustments as they are today.
00:04:06 Mairi Spowage
No is the short answer.
00:04:07 Mairi Spowage
No, I didn’t think so.
00:04:08 Mairi Spowage
I’m not sure you would design it quite like this.
00:04:11 Mairi Spowage
Tell us a bit about how you came to come back to the Fraser and take up the directorship then, because it was a bit of an inflection point for the institute based on, you know, us looking at the history and, you know, the evolution of the institute over that period.
00:04:25 Graeme Roy
Yeah.
00:04:25 Graeme Roy
So there are a couple of things.
00:04:27 Graeme Roy
I’d obviously been in government for quite a long time and I’d
00:04:32 Graeme Roy
I had actually just moved into taking over the policy and setting up a policy unit for the First Minister.
00:04:38 Graeme Roy
And I guess the thing that struck me at the time was there was lots of big debates about fiscal devolution.
00:04:45 Graeme Roy
It was in the context of just after the independence referendum, there was going to be this transfer of new fiscal powers.
00:04:53 Graeme Roy
And one of my reflections was that while government and parliament were essentially scaling up to ready to start to think about these powers,
00:05:01 Graeme Roy
There was very little debate in Scotland more broadly and really high quality academic research into these areas.
00:05:10 Graeme Roy
And the exception to that was obviously the Fraser of Allander Institute.
00:05:14 Graeme Roy
But the Fraser at that time had never really done too much on fiscal policy.
00:05:19 Graeme Roy
There’s some things that I’m sure you’ll chat with Kim Swales and Peter McGregor about was that they’d started to do some modelling work around
00:05:27 Graeme Roy
existing fiscal powers, but there was never really an expertise in fiscal policy per se.
00:05:33 Graeme Roy
And I thought that was quite a gap in the kind of landscape in Scotland, particularly if we’re going to take on these new powers.
00:05:43 Graeme Roy
And the phrase at the time was also, as you say, was a bit of an inflection point.
00:05:47 Graeme Roy
It had been scaled back quite a bit.
00:05:52 Graeme Roy
The people who were leading the Institute, such as
00:05:55 Graeme Roy
Elizabeth, Peter, Kim, were all getting to the point, to put this politely, of thinking about moving to do different things in their kind of retirement phase.
00:06:08 Graeme Roy
And there was a real issue about, well, what would happen to the future of the Institute.
00:06:12 Graeme Roy
And it was actually, again, fortuitous, and coming back to the point about Scotland being a small place.
00:06:18 Graeme Roy
But Andrew Goudie, who was the chief economist in the Scottish Government when I was there, and I worked really closely with Andrew, had moved over to Strathclyde to be a special advisor to the principal, Sir Jim McDonald.
00:06:32 Graeme Roy
And I’d kept in contact with Andrew, and we’d been chatting for several years.
00:06:38 Graeme Roy
And one of the conversations we kept coming back to was this kind of lack of academic thinking and research.
00:06:45 Graeme Roy
And
00:06:46 Graeme Roy
independent analysis into some of the big fiscal questions.
00:06:50 Graeme Roy
And Andrew said, well, why don’t you come back to the Fraser and help to do that?
00:06:56 Graeme Roy
And it probably took about two years of Andrew buying me coffee or more, actually more likely me buying coffee, but just chatting regularly for a period of time.
00:07:07 Graeme Roy
And then it was right for me personally at the time, but also chatting to the university that Strathclyde had
00:07:14 Graeme Roy
decided to have a big commitment into this and these two aligned and that’s when I came back in 2016 and I just, at that point we’d just finished the work for the government to sign off on the fiscal framework and it was the ideal time to come in and then start to do it from the other side to think about how the fiscal framework would work.
00:07:37 Mairi Spowage
No, absolutely.
00:07:38 Mairi Spowage
And it seems from the outside of the Fraser at that time, so I was in government at that time, that it was that combination of, you going over to sort of lead a refreshed Institute, but also that sort of commitment from the university to put, some resources and money behind it so there would be more analytical capacity, I suppose, to comment on these new issues for the institute.
00:08:05 Graeme Roy
Exactly.
00:08:05 Graeme Roy
And it was a very, I mean, it was a very, it was a very bold decision, I think, by Jim McDonald and David Hillier, who was and is the Dean of the Business School, to essentially kind of put their money into this and to believe in this, and this was the right thing to do, and to make an upfront investment.
00:08:23 Graeme Roy
And then the commitment for us, well, if you make that investment, we will then generate the work and the activity and the income that will make it sustainable.
00:08:31 Graeme Roy
Because
00:08:32 Graeme Roy
the Institute had got into a position just because of just where it was in terms of demographics and where it was in terms of its journey, that it wasn’t financially sustainable in terms of its underlying business model.
00:08:46 Graeme Roy
So we had to turn that around, but then also think about where it would grow.
00:08:50 Graeme Roy
And I think the alignment of things like new fiscal powers coming, debates over budget, big policy debates,
00:08:57 Graeme Roy
meant that it was great the university put the investment in and then it was able to grow and develop and then be taken on people yourself like yourselves and the team onto even greater things.
00:09:08 Graeme Roy
So yeah, it was, I think it was a, it was a good alignment at that particular point in time.
00:09:13 Mairi Spowage
No, absolutely.
00:09:14 Mairi Spowage
And, you know, without that investment and that decision at that point in time, you know, we are now much bigger.
00:09:21 Mairi Spowage
We are financially sustainable.
00:09:24 Mairi Spowage
We’re around 20 people now and we wouldn’t be here if it hadn’t been for that decision at that point in time.
00:09:29 Mairi Spowage
I’ve sort of no doubt about that.
00:09:32 Mairi Spowage
And it’s interesting as we’re talking, you know, today I think it’s Jim McDonald’s last day as principal of Strathclyde.
00:09:41 Mairi Spowage
And he’s obviously moving on to other sorts of things like being chair of Scottish Enterprise and so on.
00:09:48 Mairi Spowage
But so I wouldn’t say it looks like a very
00:09:51 Mairi Spowage
quiet retirement for him, but it’s a really important part of his legacy from in terms of the economics landscape in Scotland, I think.
00:10:01 Mairi Spowage
So
00:10:02 Mairi Spowage
Could you tell us a bit about what you remember from taking over and sort of what were the economic conditions like?
00:10:08 Mairi Spowage
You’ve talked a lot about the debate about new fiscal powers, obviously following the Smith Commission and the fiscal framework being engaged and that sort of thing.
00:10:16 Mairi Spowage
What are your memories of the work that you did in the first couple of years as director?
00:10:20 Graeme Roy
So I guess the one thing is that you come in with plans and then very quickly these plans go out the window.
00:10:26 Graeme Roy
And as I said, one of the big things we wanted to really do was
00:10:31 Graeme Roy
to proper in-depth work into fiscal policy, both in terms of the fiscal framework, but then start to move into, well, actually, what do you do with these powers?
00:10:40 Graeme Roy
So what do you do with income tax and what do you do with social security?
00:10:45 Graeme Roy
And one of the big objectives, which we did actually stick to and deliver, and you and colleagues like Emma have taken, Emma Congreve have taken on to even
00:10:53 Graeme Roy
bigger and better things was to basically invest in the capability and the capacity to basically look at these sorts of things and to look at, well, what are the big policy questions?
00:11:04 Graeme Roy
What happens if you pull these different levers?
00:11:06 Graeme Roy
And we didn’t have the capability at the time.
00:11:08 Graeme Roy
So there was a lot of investment in staff, in modelling capabilities, in thinking about the data to go into that.
00:11:16 Graeme Roy
And that, I think, stuck, and that developed and then spun off into different things.
00:11:21 Graeme Roy
And I think the big thing that changed was, so I joined in March 2016 and everything was ticking along okay.
00:11:30 Graeme Roy
And it was like, okay, these are the forecasts for the economy.
00:11:33 Graeme Roy
And then whoops, we had the Brexit referendum.
00:11:36 Graeme Roy
And suddenly within 2 1/2 months, yeah, 2 1/2 months of me coming in, suddenly it just blew up in terms of what is this meaning for the economy.
00:11:47 Graeme Roy
And actually one of the very first things we did, and I think
00:11:50 Graeme Roy
I think one of the most insightful things we did was we did when it was who led the work at the time.
00:11:56 Graeme Roy
He was a PhD student or maybe just become a postdoc.
00:12:00 Graeme Roy
He was kind of still relatively early in his career and is now doing great things again in research in the department.
00:12:09 Graeme Roy
But he did some work for us to look at what was the economic impact of Brexit, the long-term economic impact.
00:12:15 Graeme Roy
And that was what we did with the Scottish Parliament.
00:12:17 Graeme Roy
And in some ways,
00:12:19 Graeme Roy
as much as challenging Brexit was, that was a fantastic opportunity for us to essentially put a marker down that the Fraser was here to do really high quality, independent, in-depth academic research into these big policy questions.
00:12:32 Graeme Roy
And I think that then kicked off a whole host of different things that then followed from that.
00:12:38 Graeme Roy
So yeah, that first couple of months didn’t go exactly to plan.
00:12:44 Graeme Roy
And
00:12:45 Graeme Roy
But I think it also helped set the scene for what we would do over the next few years.
00:12:49 Mairi Spowage
That’s really interesting because I know that work that was done by the Fraser in 2016 is still quoted, you know, it still comes up, you know, it sort of floats into the discussion in terms of the impact of different forms of deals on Scotland.
00:13:02 Mairi Spowage
And also a lot of the work that was done in that first year, you know, we’re doing lots of work with, say, Gioele and other colleagues on trade at the moment, you know, so applying these particular
00:13:14 Mairi Spowage
modelling techniques to the issue of the day, which then was about Brexit and how that could, and now it’s about trade and tariffs and, the regional dispersion of impacts from changing trading arrangements and things like that.
00:13:27 Mairi Spowage
but some of these things do still have resonance down to today.
00:13:31 Mairi Spowage
So some of the work that was done, I think it was with the GMB at the time in that first year or so you were director, it led to some other work, which led to some other work, which led to some other work, which we’re still doing today on, particularly on the impacts of trade unemployment, for example.
00:13:50 Mairi Spowage
So it’s just, it’s really interesting.
00:13:51 Mairi Spowage
I can see the line from some of that stuff that you did in that first year.
00:13:55 Mairi Spowage
to some of the things that we’re doing today.
00:13:58 Graeme Roy
Yeah, and similarly though, I think that they are probably likely to be true, but equally I think our ability to do that work around Brexit was built on the modelling capabilities that Kim and Peter had built.
00:14:11 Graeme Roy
Definitely, yeah.
00:14:11 Graeme Roy
Allen, who was the deputy director at the time, had built over time.
00:14:15 Graeme Roy
And I think that’s the bit that makes the Fraser really unique is the fact that it isn’t just doing
00:14:20 Graeme Roy
analysis for analysis sake.
00:14:21 Graeme Roy
It’s built on underlying kind of deep academic research, which might actually be quite boring and not really get too much attention outside the academic circles most of the time.
00:14:32 Graeme Roy
But it means that when it is needed to be called upon, there is something there that can be used and give really, really insightful analysis.
00:14:40 Mairi Spowage
Yeah, absolutely.
00:14:40 Mairi Spowage
And it’s pairing that up with being able to do
00:14:44 Mairi Spowage
agile and useful analysis with that kind of strong academic foundation.
00:14:50 Mairi Spowage
So we have credibility in the work that we do as well.
00:14:54 Mairi Spowage
It’s really important.
00:14:55 Mairi Spowage
And what would you say, you know, thinking about your, so five years as director, what are the things that sort of stand out to you as the things that you’d be kind of most proud of, either an output or an impact that the institute had?
00:15:11 Graeme Roy
I think when I look back, I think the biggest achievement and the thing that I still am really proud about was that when we came through the door, there was questions about sustainability of the institute.
00:15:22 Graeme Roy
And even maybe about five years before I took over, there was a plan put in place to close the institute.
00:15:31 Graeme Roy
And it was only kind of saved at the last minute.
00:15:35 Graeme Roy
And we had a fantastic team that was really ambitious, but it was very precarious.
00:15:40 Graeme Roy
And I think the fact that through the hard work of the entire team, we were able to turn that around into, something that was sustainable, but also something that I think the time I left looked and felt radically different.
00:15:57 Graeme Roy
So it had a whole host of different things.
00:16:00 Graeme Roy
It was working on it, from fiscal policy through to
00:16:04 Graeme Roy
We just started to get the first work in your world around economic statistics.
00:16:08 Graeme Roy
And that’s an area we’d never really done before.
00:16:10 Graeme Roy
We started to move into things like inequality, looking at disability and the labour force and things like that.
00:16:17 Graeme Roy
Things that we’d never really done, we started to diversify.
00:16:20 Graeme Roy
But I think the fact that I said the thing that probably still most proud of is that we developed an amazing team and an ability to create an amazing team.
00:16:29 Graeme Roy
Obviously, we brought in some outstanding colleagues that I knew.
00:16:33 Graeme Roy
I’m talking about Emma here, Mairi.
00:16:35 Graeme Roy
Oh, yeah, and yourself, of course.
00:16:37 Graeme Roy
But we managed to bring in some really, really good people.
00:16:40 Graeme Roy
We were able to draw on some fantastic academics in the university, Stuart McIntyre and Grant Allen, Gioele Figus, you know, all these people to come in and work.
00:16:50 Graeme Roy
But we then started to build a pipeline of really young people coming through.
00:16:55 Graeme Roy
And we started for the first time to put in initiatives like
00:16:59 Graeme Roy
Interns, and I think James Black
00:17:05 Graeme Roy
was our very first intern back in the summer, I think of 2016 or it might have been 2017.
00:17:12 Graeme Roy
Adam McGeer, who’s now gone on to the Bank of England, was one of our interns.
00:17:17 Graeme Roy
Ben Cooper was another one as well.
00:17:20 Graeme Roy
So all these people who’ve done great work for the institute ever since came through a programme of internships and were able to give them some work, which then led them to do
00:17:30 Graeme Roy
Masters.
00:17:31 Graeme Roy
So I think the biggest achievement, I think the thing I’m most proud of is the fact that we created this kind of this thing that could start to generate future economists, future statisticians who had an interest and a passion for the Scottish economy and fiscal policy.
00:17:44 Graeme Roy
So we built up a better capability and then people like yourself and the team have taken that on even further.
00:17:50 Graeme Roy
But that was never there back in 2016 and it was down to a small number of us.
00:17:56 Graeme Roy
And that was a real concern about that capability in Scotland.
00:18:00 Graeme Roy
So that’s probably that I still think is the thing I’m most proud of.
00:18:05 Mairi Spowage
Yeah, it’s a really good point, actually.
00:18:06 Mairi Spowage
And, we take that responsibility seriously as being part of this kind of ecosystem in Scotland.
00:18:12 Mairi Spowage
And whilst we do train,
00:18:17 Mairi Spowage
really good people who have quite often come through Strathclyde programmes, but not just, especially given our links into economic features and the other universities.
00:18:27 Mairi Spowage
Taking on these people, making them very useful economists who some of them stay and take on more senior posts like James and Ben that you’ve mentioned, who have got quite senior posts in the institute now, and some of whom go off to other organisations.
00:18:44 Mairi Spowage
And most recently, we’ve had Adam go to the Bank of England, Jeff’s gone off to the OECD.
00:18:51 Mairi Spowage
You know, Mark Mitchell, our colleague, went off to work for the CMA.
00:18:56 Mairi Spowage
Rob, our colleague, went off to work for SPICE and Scottish Parliament.
00:18:59 Mairi Spowage
And all of these organisations are, you know, are doing really good quality analysis.
00:19:05 Mairi Spowage
And we see ourselves as a key part of that ecosystem.
00:19:09 Mairi Spowage
And, you know, no doubt some of them will come back and even more senior posts to the Institute one day.
00:19:14 Mairi Spowage
maybe even to lead it.
00:19:15 Mairi Spowage
So it’s a really important part of our responsibility, I think.
00:19:20 Mairi Spowage
And given the number of applied economists seems to only grow in Scotland, perhaps one day this will stop.
00:19:27 Mairi Spowage
But you know, with the UK government basing more people here, you know, there seems to be lots more organisations who are looking for the people with these sorts of skills.
00:19:37 Mairi Spowage
So, you know, we are a key part of that ecosystem.
00:19:42 Mairi Spowage
Because of course, economic futures, which is a big part of our work now, started off under your directorship as well.
00:19:50 Mairi Spowage
How did that all, what was the genesis of all of that?
00:19:52 Mairi Spowage
Because it’s been a, it’s a really big part of our work and it’s, you know, it’s all very highly and it’s something that we’re really proud of.
00:20:01 Graeme Roy
Yeah, I mean, it came from that explicit effort as part one part of our strategy was to boost
00:20:06 Graeme Roy
capability and capacity and also diversity within economics and to get more people interested in it and to counter the view that sometimes is that economics is all about the city of London and actually it’s about finance and the reality is, you’ll get any problem in society and economics is at its heart.
00:20:29 Graeme Roy
And I think it was about, so it was about trying to get more interest in all of that.
00:20:32 Graeme Roy
And we had a great conversation with
00:20:34 Graeme Roy
the Scottish Funding Council who saw that same challenge and saw the challenges within the kind of economic profession and understood as well that the changing powers to the Scottish Parliament were going to mean that we’re going to need more applied economists and they were brilliant supporters in this initiative to, you know, encourage more people to, you know, have a chance to try what it’s like being an applied economist, to engage more in some of the policy questions through competitions and challenges.
00:21:02 Graeme Roy
and then gave us, again, a bit like the university taking a bit of a punt on the Fraser, the fact that the funding council took a bit of a risk with us and gave us some funding and said, look, just go try it, see how you get on.
00:21:15 Graeme Roy
And then the fact that it was a success and able to become self-sustainable
00:21:19 Graeme Roy
again, was a really great initiative for them and I guess confidence from them in what we’re trying to achieve.
00:21:24 Mairi Spowage
No, absolutely.
00:21:26 Mairi Spowage
And after that initial funding, it’s now become, self-sustaining, which is great.
00:21:32 Mairi Spowage
We’re really grateful for the partners who support us in the initiative, you know, who offer the work placements, for example, to, you know, our students.
00:21:42 Mairi Spowage
And really, it’s about us showing that, like you say, Graeme, that
00:21:48 Mairi Spowage
Pretty much any problem you can think about in society, what we try to do is show that you can think about how economic tools can help you understand it better, how they can help you understand what might work to actually help deal with some of these things.
00:22:01 Mairi Spowage
And that’s what we’re all about and why we do work on.
00:22:05 Mairi Spowage
on the policies that are of interest of the day, but applying our economic analysis thinking to them is really important.
00:22:11 Mairi Spowage
You do this in your current role, and I do it a lot as well.
00:22:14 Mairi Spowage
we’re often talking about the economy, the economic conditions, and certainly for the last five years or so, it’s felt like, you know, it’s completely mad and things keep happening.
00:22:26 Mairi Spowage
And so thinking about all your years as an economist, you know, how has the last few years
00:22:33 Mairi Spowage
sort of matched up to what the expectations you maybe had?
00:22:36 Mairi Spowage
And what do you make of the sort of current economic conditions?
00:22:40 Graeme Roy
It’s an interesting question.
00:22:41 Graeme Roy
I mean, so when I went, when I was a student, we kept on talking about the nice decade.
00:22:46 Graeme Roy
It was during that time we had essentially solved macroeconomics.
00:22:52 Graeme Roy
We had steady growth, low unemployment, low inflation, and everything was fine.
00:22:56 Graeme Roy
And clearly since then, and in my professional career, it’s been constant.
00:23:01 Graeme Roy
issues in the financial crisis to Brexit to energy price shocks to COVID, energy supply shocks.
00:23:08 Mairi Spowage
Are you implying that these things are your fault, Graeme?
00:23:10 Graeme Roy
Yeah, exactly.
00:23:11 Graeme Roy
Perhaps my advice is not great.
00:23:14 Graeme Roy
But I mean, s I think that there is a question, I think, that actually having now come to a period in the economic kind of cycle where, actually we’re going to constantly see shocks
00:23:29 Graeme Roy
just given the nature of globalisation and the intricate nature of our economy means that it is now less resilient than it perhaps has been in the past.
00:23:40 Graeme Roy
So we’re going to get more volatility, which is potentially something we need to address and even think about how we communicate things in our modelling and forecasting, et cetera, in that world.
00:23:50 Graeme Roy
I think there’s a second piece, which is have we also reached a point where the
00:23:57 Graeme Roy
the structural challenges we’ve spoken about in our economy, whether that be demographics, whether that be climate change, whether that be, you know, big tech changes and things, whether they are now just now embedded into our economy.
00:24:10 Graeme Roy
And actually, these are the things that really matter for the economic outlook, rather than maybe the traditional way we thought of things like, well, how is investment doing or how is confidence doing in the economy?
00:24:22 Graeme Roy
Actually, these things are just
00:24:24 Graeme Roy
swept away by these huge structural changes that are going to have a much more significant effect, not only in the long term, but in the kind of medium term that we, people like the Fraser Allander or us at the Fiscal Commission do our forecasts.
00:24:39 Graeme Roy
So I think there’s a lot, I think there’s a really big challenge, I think, for economic forecasters and people like ourselves trying to make sense of the overall economic context, because I think it is much more fluid and much more dynamic.
00:24:53 Graeme Roy
than it has been.
00:24:54 Graeme Roy
And it’s also potentially as well come to a situation where things that we took as given, like the kind of the role of, international organisations, the role of international agreements and rules-based systems like, you know, how you do tariffs and how you engage with countries is just being thrown up in the air by
00:25:15 Graeme Roy
disruptors in the global economy and potentially in the domestic economy as well.
00:25:21 Graeme Roy
And it’s how do we cope with that and how do we how do we address that I think is going to be fascinating in the next few years.
00:25:28 Mairi Spowage
Yeah, absolutely.
00:25:31 Mairi Spowage
I think the things you said about the traditional way we think about the things that are going to influence growth and that these sorts of structural things are likely to overwhelm that completely.
00:25:45 Mairi Spowage
is right.
00:25:48 Mairi Spowage
Although one of the bits of analysis we’ve been doing recently is really about the levels of investment that we have seen over the last 20 years in the UK economy and the extent to which that very low level of investment that we’ve seen has made our economy much more vulnerable to any of these shocks and, you know, much less resilient to, I guess, adapting to some of these structural changes.
00:26:15 Mairi Spowage
But we’re definitely in a turbulent and chaotic times and it’s interesting speaking to businesses just now, it’s almost like they’re quite getting, they’re getting used to the chaos because they have to and they’re resilient and they, sort of muddle through.
00:26:33 Mairi Spowage
But they’re, yeah, they’re getting quite used to used to the chaos and thinking, oh, well, we’re just, we have to make the best of it and get on with it, just like businesses often do.
00:26:40 Mairi Spowage
So it’s quite interesting.
00:26:44 Mairi Spowage
So you’re now working at an organisation that I helped set up as the Scottish Fiscal Commission and I see the Scottish Fiscal Commission go from, you know, where it was set up and grow and do all the new things it does and, you know, we think with, you know, pride about my role in helping establish it and, you know, the fact that it’s, you know, off doing much bigger and better things than I ever thought it would be able to do.
00:27:11 Mairi Spowage
So
00:27:12 Mairi Spowage
It’s great.
00:27:12 Mairi Spowage
I mean, what do you think, do you have any views on maybe the areas that you could see the FAI getting into in future years and this sort of thing?
00:27:22 Mairi Spowage
Because we’re always evolving the sort of research programmes we’re doing because we want to obviously remain relevant and ensure that we’re having an impact.
00:27:32 Graeme Roy
It’s a good question.
00:27:32 Graeme Roy
I mean, I think the, and I’ve written about this in an academic world, I think one of the slight disappointments, I think, over the last 25 years with devolution more generally is that the level of kind of think tank, you know, policy analysis hasn’t perhaps, you know, hit the levels that we would have done.
00:27:50 Graeme Roy
And that’s why I think the Fraser are such an important role and such a precious role within that debate in there.
00:27:55 Graeme Roy
And I think that there, when there’s institutions like the Fiscal Commission, Audit Scotland and independent bodies like
00:28:00 Graeme Roy
the FEI and hopefully in time a flourishing think tank community on all sides of the political spectrum.
00:28:06 Graeme Roy
I think that’s what we need as a country to basically have really frank debates and get people disagreeing vigorously, respectfully, but having different policy opinions.
00:28:17 Graeme Roy
And I think that, again, the Fraser’s kind of role in shaping that and providing that evidence base through all of that, whether that be in current public policy debates or run up to elections or budget times.
00:28:29 Graeme Roy
but then also thinking about, how do we really address some of the really big tech items, whether that be demographics, inequalities, climate change.
00:28:39 Graeme Roy
And I think there’s a really important role for the Fraser being there as the explainer, as the kind of neutral referee and holding institutions, including like ours and the Fiscal Commission to account for what we do, but also just being there to help articulate and explain why this stuff is really, really important.
00:28:57 Graeme Roy
Why the government spending 60 billion pounds on our behalf, this year, it’s really important to understand what that is, what they’re spending on, what’s the value for money, and what else could be done differently.
00:29:11 Graeme Roy
You know, it’s really important, I think, for every question that we have in how society is evolving and the challenges, but also the opportunities as well.
00:29:21 Mairi Spowage
Yeah, absolutely.
00:29:22 Mairi Spowage
And I completely agree with you about the
00:29:26 Mairi Spowage
the sort of external think tank environment.
00:29:29 Mairi Spowage
Sometimes we are asked to, comment on and do research on areas that we’re really not experts in, we’re not, we’re not experts in everything.
00:29:39 Mairi Spowage
And, we can’t because we’re not experts, but it would be good if there were people who would do that, who were kind of like us, but in different topics or on different areas and that sort of thing.
00:29:53 Mairi Spowage
We do quite a lot more work now, not just on Scotland, but on Wales and on Northern Ireland, for example, and talking to, officials or colleagues there.
00:30:03 Mairi Spowage
they wish there was something like the FAI in their territory.
00:30:07 Mairi Spowage
But, for me, given we have the FAI and we have a big impact, having more independent voices, I think, would be good.
00:30:15 Mairi Spowage
And then, as you see, think tanks and policy thinkers from a kind of across the political spectrum who can come up with ideas to be debated in an open way, hopefully with increasing levels of analytical capacity.
00:30:29 Mairi Spowage
So, whilst you know
00:30:31 Mairi Spowage
Some countries in the UK are looking at Scotland almost because we have this debate and because we’re further down the devolution journey certainly than Wales are, for example.
00:30:43 Mairi Spowage
You know, I think that would be the next step for us.
00:30:45 Mairi Spowage
So I think that’s right.
00:30:46 Mairi Spowage
More debate, more challenge, more people challenging what we say too, you know, would be would be really positive, I think.
00:30:55 Mairi Spowage
So yes, we’ll see how things develop over the next few years, no doubt in ways that both of us as economic forecasters completely will not predict as ever.
00:31:08 Mairi Spowage
So thank you so much for joining us today, Graeme.
00:31:11 Mairi Spowage
It’s been really interesting to hear your reflections.
00:31:15 Mairi Spowage
We have talked to most of your predecessors and some of them given their history with the Institute.
00:31:21 Mairi Spowage
We had a lot of many decades of experience to talk about in terms of how the institute evolved, but it was really important to hear your views on that sort of revitalisation in 2016, because as I said, it wouldn’t be the Institute, it’s just now if that hadn’t happened, that decision hadn’t been made.
00:31:41 Graeme Roy
Great, nice, very good to speak to you, Mary.
00:31:43 Mairi Spowage
If you would like to come along to our 50th anniversary conference, please sign up on our website.
00:31:49 Mairi Spowage
Places are starting to run a bit thin on the ground.
00:31:53 Mairi Spowage
So if you are keen to come, please sign up soon for the anniversary conference on the 18th and 19th of September, which is taking place at the Technology and Innovation Centre in Glasgow.
00:32:07 Mairi Spowage
So come along to that if you would like to hear more.
00:32:11 Mairi Spowage
We’re going to have quite a lot of information at the conference about the history of the Institute and the different stages of its life.
00:32:19 Mairi Spowage
So you’ll be able to see lots more information about that.
00:32:24 Mairi Spowage
The rest of our podcasts with the other directors are also available on our website.
00:32:30 Mairi Spowage
But we’ll see you again soon for another Fraser of Allander podcast.
Ben Cooper
Hello, 2025 marks a significant year for the Fraser of Allander Institute. Founded in 1975, the Institute celebrates 50 years of leading economic research in Scotland. Given this, we have a series of exciting events and content planned for the remainder of this year to mark this milestone.
This includes our anniversary conference on the 18th and 19th of September this year at the University of Strathclyde’s Technology and Innovation Centre. We have a number of speakers and themed sessions planned for the day in order to highlight the breadth and importance of the Economic Research being conducted across Scotland.
As well as this we have a number of other events planned, including our reception at the Scottish Parliament in December and one at the Scotland Office in London in October.
You’ll also see some unique content published in the coming months, including a podcast series with past institute directors and some articles on the history of the Institute, as well as some other eye-catching covers from some of our reports from over the years in the coming months.
In order to be kept up to date with any of these events and to be the first to know about our 50th anniversary publications, visit our website, fraserofallander.org and you can join our mailing list.
If you are interested in engaging with us also, whether you previously work for or with the institute, why not get in touch? We have a designated 50th anniversary e-mail fraser50@strath.ac.uk. We hope you’re as excited as we are and look forward to celebrating this exciting milestone with as many of you as possible.
Authors
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.