Although there are some industries that will have been more intensively affected (the Scottish based seafood and seed potato industries for example) the Scottish experience of Brexit is likely to largely mirror the experience across England and Wales. Industry-specific support aside, how could Scottish policymakers focus their efforts moving forward?
Whilst we share a similar experience of the impact of Brexit, Scotland of course has an added dimension to debates over its future. Scotland’s future relationship with the UK, and by extension the EU, is not settled, and unlikely to be for some time. Whereas policymakers in the UK seem largely agreed that re-accession to the EU is not on the cards, we do not have that certainty in Scotland. This presents opportunities, but also adds to an already present risk of policy making paralysis in the face of so much uncertainty. How do you develop effective economic policy when the economy could change beyond all recognition?
Tools to help deal with uncertainty
Scenario planning is often used by businesses to help inform strategy and ensure that businesses know what to focus on and are ready to adapt. But it can be used by government, or those who seek to advise government, to help decide on where to focus investment and resources. The UK Government has developed work in this area[i], and the UNDP[ii] has a guide for developing countries who need to be able to move away from ‘borrowed’ futures – those that relate to the past and other places.
Example: The future of hospitality
Working through this type of process is something that we at the Fraser of Allander have recently seen in practice as part of a piece of work with the hospitality sector[iii]. Employers are facing a lot of uncertainty at the moment, partly as a result of EU exit. Staff recruitment and retention were the key issues that employers wanted to address now and in future.
Interestingly, the future constitutional and EU trading position did not feature in the list of uncertainties that businesses wanted to discuss. This tells us something interesting in itself – what may be of interest to government and stakeholders like ourselves may not be something that businesses feel is top of the critical relevance list.
However, it would be interesting to think about adding that uncertainty into the mix. Relaxations on the movement of labour would no doubt ease some of the recruitment issues. But would it change employers’ views on whether improving pay and conditions was the optimal approach? From the discussions we had with employers, it felt like they knew that improved pay and conditions was the optimal strategy regardless of the future because it meant that they were more likely to have an engaged and productive workforce, as well as the moral sentiment of ‘doing right’ by their employees.
Scottish policy aspirations are closely aligned with those sentiments expressed by the employers we engaged with, with Fair Work a pinnacle of the National Strategy on Economic Transformation. However, Scotland’s labour market will look very different depending on the constitutional future. Scotland’s powers regarding the labour market will also look very different, and rules and regulations may also be very different. Are there actions that Scottish policy must prioritise in all those versions of the future to optimise outcomes, and prevent economic harm?
But there are optimal solutions around which we should be able to form a consensus, to be pursued regardless of what happens constitutionally. More time spent identifying these and building consensus on the way forward would indeed be time well spent.
[i] Government Office for Science. “A brief guide to futures thinking and foresight.” (2021)
[ii] UNDP. “Foresight Manual. Empowered Futures for the 2030 Agenda.” (2018)
[iii]This is part of the ‘Serving the Future’ project funded by the Robertson Trust. A full report on the Futures work will be available on our website by the end of May 2023: https://www.servingthefuture.scot/