HIGH wages for staff and no government bailouts for businesses – this is how to make Scotland’s economy really work, according to an extensive new report by the Common Weal.

In the first of a three-part series setting out an alternative economic recovery strategy, the think tank presents a plan it says can “replace low-pay service jobs that are being lost because of the pandemic” with high-wage posts by using public procurement to support Scottish firms.

It suggests setting up a retraining guarantee “for anyone who has lost their job” in partnership with colleges and universities and giving every person in Scotland a £100 voucher towards a stay at an independently-owned hotel to support the “strategically important” tourism sector.

It also calls for a £30-per-head outlay to prop up the hospitality sector and a country-wide Festival of Scotland to help the events and entertainment sectors.

READ MORE: Blueprint for a new Scotland is grounded in reality, not flights of high fantasy

Published today, the blueprint also sets out the case for investment in the growing of wood, bamboo, hemp and other crops as a basis for a “modern green advanced” sector supplying eco-materials to replace “unsustainable” imports and support the construction sector.

And the plan calls for Scotland to take a “global lead in the emerging hydrogen industry” – plus the removal or raising of the Scottish Parliament’s borrowing cap so that public expenditure “can be used where needed”.

All of the steps suggested, the think tank says, can be taken before the 2021 election – without new powers for the parliament and without bail-outs to business.

The report has won the endorsement of Labour’s Pauline McNeill, Andy Wightman of the Greens and several senior SNP politicians. It states: “The scale of the task ahead for Scotland can seem daunting.

“Somehow we need to rebuild our economy in the aftermath of Covid, but we also have to make real progress on the pre-existing failures of the old economy (none more so than poverty and inequality) and we cannot lose focus on the need to quickly achieve a green economy in Scotland.

“But doing this in pieces is only going to make it much harder. It makes no sense whatsoever to use the old tools to try and restore the old economy and then, once that is done, to begin all over again to transform that economy into the one we need.

“This is completely the wrong way round; we must use the tools of the economy to come to rebuild us out of our existing economy and its failures. It is that new economy to which we must ‘recover forward’.”

According to the plan, the Scottish National Investment Bank should be given “full dispensation to act as a bank” and capitalise on pension funds, lending to the public as well as the private sector.

This includes the creation of a mortgage-to-rent scheme to prevent people from losing their homes if they lose their jobs, with private banks “expected to take a substantial hair cut” on these deals.

Common Weal director Robin McAlpine commented: “It is time we backed Scottish business with something more than rhetoric and it’s time Scotland became a nation that makes things again. We have the most incredible but under-used natural resources and they can fuel a green reindustrialisation and move us to a high-pay economy.

“Scotland can not only survive this crisis but come out the other end in much better shape if we do the right things now. An economy that creates vulnerable low-pay employment and falls over every time there is a crisis is not an economy for our future.”