Ian McConnell: Tories do lack long-term plan but end to foolish decisions would be a good start

From an external perspective, the Boris Johnson administration has appeared to have an extremely short attention span indeed when it has come to just about anything, favouring populism and sloganeering over substance. And, when things go wrong, falling back on bluster and more populism.

The current Government’s economic track record has been absolutely dismal (in keeping with the pattern set by recent Tory administrations).

Against this backdrop, the degree of focus on the Scottish Government’s new 10-year economic strategy published in March, and particularly carping over it by some of First Minister Nicola Sturgeon’s political opponents at Holyrood, seemed somewhat remarkable. “Scotland’s national strategy for economic transformation”, according to modelling published by the Scottish Government, “could increase the size of the...economy by at least 4.9% (or £8 billion) more than it otherwise could have been in 2032”.

Entrepreneur Sir Tom Hunter described the Scottish Government strategy as “a wish list begging for a magic wand that is not in our grasp”, adding the “lobbyists, politicians and vested interests have had their say and a panacea of 70 action plans awaits us if anyone can actually manage their delivery”.

Of course, ambition is one thing and delivery is another. And only time will tell how the Scottish Government strategy plays out.

What is often somewhat disconcerting about the degree of focus on such strategies, whether it be the Scottish Government one or the Johnson administration’s “plan for growth”, is the impression you get that many people perceive them as the key to future success.

READ MORE: Exclusive: Scottish airport chief reveals his departure decision

It is crucial to recognise the limits of what government can achieve. In a Scottish context, it is interesting and sometimes amusing that it is often voices from the right, which favour small government, that you hear most shrilly when it comes to demands for delivery by the state on the economy. These people surely need to make up their mind whether they want government to be less involved, or to solve all or most of their problems.

In the Scottish political goldfish bowl, the degree of criticism of whichever administration has been in power at Holyrood since devolution, when it has come to the economy, has seemed overdone.

The current Scottish Government has done very well on the economic front in many areas where it has the levers, notably in helping attract inward investment, although an observer might be forgiven for not knowing this given the sniping from some quarters. Obviously, there are other areas in which it has attracted valid criticism, although the degree of this has sometimes been overblown because decisions have to be made without the benefit of hindsight.

READ MORE: Ian McConnell: Preposterous to claim protocol changes do not warrant robust reaction from EU

In any case, it is crucial to realise the UK Government has far greater power to affect the Scottish economy, for good or ill, than Holyrood. That said, it also seems important to recognise that the most positive thing the Conservatives could have done when it has come to the UK economy has nothing to do with a fancy strategy. What would have made the most difference would have been not making the huge policy mistakes the Tories have delivered since 2010.

Their savage austerity programme has weighed extremely heavily on the economy. And you only have to look at the forecasts of the independent Office for Budget Responsibility and the Theresa May government to see the hugely detrimental impact on the economy over years and decades from Brexit.

READ MORE: Ian McConnell: Are Tories about to see some sense as cost-of-living crisis builds?

However, while recognising the limitations of a government economic strategy in boosting output and living standards, it is interesting to look at the cross-party Treasury Committee’s views of what the Johnson administration has been doing on this front. And hopefully those Tory politicians in Scotland who at times seem so obsessed with what the Scottish Government can do to boost the economy north of the Border will also be keen to take note of the committee’s assessment and perhaps even make representations on this front to the Cabinet.

The report from the Treasury Committee, following its inquiry into “jobs, growth and productivity after coronavirus”, surely makes pretty grim reading for the Conservatives.

Publishing the report on Wednesday, the House of Commons committee called for a “renewed, coordinated focus on long-term growth to bolster the UK economy”.

The Treasury Committee, declaring its report would “make essential reading for the new chancellor”, expressed “concern at the chop and change, a risk of fragmentation and lack of long-term thinking in economic strategy, following the abolition of the industrial strategy and its replacement with the plan for growth".

It warned that “another wholesale change in policy would exacerbate this lack of long-term planning”, while calling for “renewed coordination of growth strategy across government departments” and declaring “it is not clear how the plan for growth offers an advance on its predecessor”.

The committee declared: “While the outgoing Prime Minister has suggested that immigration is not the solution to labour and skills shortages, the committee outlines that the current level of vacancies could hold back growth and stoke inflation, and calls on the Government to prioritise addressing skill gaps and ease labour shortages.”

Elaborating on the views of its members, it added: “The MPs also call for the Treasury to help those most adversely impacted by changes in trade with the EU, and for the Government to more clearly identify the economic opportunities that may arise from Brexit.”

It should almost go without saying that an inability to fill jobs will hold back growth and fuel inflation – indeed we are already seeing these effects.

Prioritisation of addressing skills gaps and easing labour shortages is a sensible suggestion. However, it would have been good to see the Treasury Committee being a bit more challenging on this front.

Many in the business community are in no doubt that the labour and skills shortages have been driven in large part by Brexit.

And, in a Scottish as well as a broader UK context, strong net immigration is clearly beneficial to growth over the long term given the ageing population.

Examining what it calls the UK’s “productivity puzzle”, the Treasury Committee noted business investment had fallen since 2016.

It declared that, “while a focus on reforms to tax incentives is a good start, wider economic certainty, coherence and stability in the Government’s growth policy – which is currently deficient – will be key to improving investment”.

The Treasury Committee also reiterated “disappointment over the decision to push back the target to spend £22 billion on research and development”, and warned against “further slippage”.

For anyone following the UK’s economic performance in recent times, the criticisms in the Treasury Committee report are surely unlikely to come as a surprise.

People will differ in their views of the extent to which an economic strategy by any government makes the difference, relative to global factors or natural private-sector forces. However, even if a government strategy is more of a vision or a statement of intent, it would be good for it to take a long-term view and be coherent. The Conservative Government, as well as having made huge policy errors which have hammered output and living standards, looks to be falling way short in terms of even having a long-term, joined-up economic plan.

All in all, the Treasury Committee’s assessment of the UK Government’s strategy on the economy is far from glowing.

It is an assessment that Rishi Sunak, who has recently stepped down as chancellor and is now attempting to become prime minister, should perhaps reflect on.

And it is something the electorate might want to keep in mind, especially those sections which bizarrely seem to think the Tories have been doing a good job on the economy.