Консолидация бизнес-структур и улучшение ресурсов институтов могут усилить диалог между правительством и предпринимателями в Шотландии

Better resourced and consolidated institutions could boost engagement between government and business community During my time in the Scottish Government I witnessed ministers and officials constantly fretting about their relationship with the business community. It was held as self-evident that government was unable to engage effectively and challenging this orthodoxy could be risky. Indeed, it was regarded as a mark of an official’s maturity and seriousness they could acknowledge the inability of the organisation – and the broader public sector – to receive and distil the private sector’s wisdom when developing and implementing new policies. It is true the Scottish Government’s stakeholder engagement does occasionally leave something to be desired. However, in the case of business, the problem goes both ways – a reality that few on either side are prepared to admit. The truth is the Scottish private sector does not organise itself in a way that facilitates productive engagement with government on issues of economic strategy. Part of the problem is the sheer number of bodies with whom government is invited to engage on business issues. Read more STEPHEN BOYD: 'Growth is good for progress but not for growth’s sake' Stephen Boyd: 'Virtuous cycle is the model for Scotland's welfare policy' Most strategic discussion is filtered through the ‘Big Six’ organisations: CBI Scotland, Federation of Small Businesses, Scottish Chambers of Commerce, Prosper (whose members are drawn from the wider economic development community, including trade unions and local authorities), the Institute of Directors and, reflecting the relative importance of the sector to the Scottish economy, Scottish Financial Enterprise. Government’s relationship with business is also conducted through a range of trade organisations such as the Scottish Retail Consortium and Scottish Engineering. Some prominent individuals, such as Tom Hunter, are included in the conversation although the lines of accountability by which these individuals claim to speak for the wider community are fuzzy at best. Scotland’s business organisations represent their members diligently and tenaciously and they are staffed by hard-working, smart people. However, relative to their European peers, they suffer from low density and concomitantly weaker resources, including a lack of serious analytical capacity. As recognised by Michael Heseltine in his No Stone Unturned report for the coalition government, this is very much a UK problem. He despaired that the “UK’s business representative bodies only skim the surface of the business population because levels of membership and engagement are low, and the business voice is fragmented”. He compared the UK Chambers of Commerce with their European counterparts: “They operate on nothing like the scale of many European chambers, and without any statutory backing or special recognition from government. Total membership is 104,000 out of a total of 4.8 million businesses. In contrast, the Paris Chamber of Commerce alone has 400,000 members, and those in Munich and Milan each have memberships considerably in excess of 300,000.” The UK’s trade unions, whose legitimacy has long been questioned due to falling membership, might understandably point to the relatively low density of the UK’s employer organisations and ask why similar accusations are not levelled at them. The OECD measures the share of employees in the private sector working in firms affiliated to an employer organisation. On average, employer organisation density in the 26 countries for which data is available is 51%. Austria, where affiliation is mandatory, hits 100% and the Netherlands, Belgium, Sweden, France, Spain, Denmark and Norway are all above 70%. Density in the UK is around 35% and, unusually across Europe, has been falling since 2000. No comparable statistics are available for Scotland but it’s safe to assume levels of representativeness are unlikely to differ to any significant degree. After all, many of Scotland’s business bodies are arms of UK organisations. If business representative organisations represent significantly less than half of all employers, can we be confident the real-time feedback they provide on pressures, priorities and opportunities reflect the true experiences of all businesses across the country? Is there a risk low and declining membership might increasingly select for particular economic and political agendas? Another challenge in building an effective strategic relationship between government and business is the prevalence of foreign ownership in Scotland. When the Scottish Government engages with ‘business leaders’ is it engaging with decision makers or cabals of branch managers? Maintaining a dialogue with the former is essential for strategic policy development but increasingly difficult with fewer domestic firms of global scale. Scotland also continues to lack the institutional infrastructure in which effective dialogue can be nurtured and sustained; a serious and ongoing failure of the politics of the devolution era. The Scottish Government has recently established a National Council for Economic Growth, which met early last month thereby fulfilling the SNP’s manifesto pledge it would do so within 100 days of the election. It is only the latest in a succession of such bodies. In a recent article I argued “it’s genuinely difficult to identify when and where any of these bodies made a tangible, positive contribution to the development, implementation, monitoring or evaluation of economic policy in Scotland” and a more effective approach would be to establish the council on a statutory basis (to protect against the political cycle) with members appointed for time-bound periods. A clear remit and priorities should be set around Scotland’s pressing economic challenges. Information about the new Council remains scant but none of this appears to have happened. All of the above should be frustrating for anyone who cares about Scotland’s economic development. Government, business and, crucially, other economic stakeholders, need to find a way to conduct more productive discussions on Scotland’s short-term pressures and, especially, longer-term strategic challenges. Discussion must encompass more than the staple complaints around tax and regulation. How might the current state of affairs be improved on? There may be a case for the Government to pump prime a discrete research foundation to assist the business community to engage with policymakers in a more analytical fashion. There is also a strong prima facie case for consolidating the main representative bodies although the politics of even raising the issue are clearly difficult. A functioning institutional infrastructure is entirely within grasp, only requiring some imagination and a break with current ways of doing things. The countries in northern and western Europe that the Scottish Government holds as exemplars have well-resourced ‘peak associations’ of business and labour with high density and levels of legitimacy. They are essential to a more consensus-driven model of economic development. Scotland can’t replicate these structures overnight but in the case of business representation it can at least start to acknowledge the problems inherent in the current fragmentation. Stephen Boyd is director of IPPR Scotland. ippr.org