CAN we believe Boris Johnson’s claim that there will be “no return to austerity”? Will the Tories really “double down in levelling up”? I’d say we can take these statements with as much salt as anything else Boris has said during his political career.

For starters, the economic prospects are grim regardless of what the Conservative Government gets up to. The UK economy contracted by a fifth during April, which is an historic record as well as being mind-boggling. Of course, the Chancellor and the Bank of England have been busy printing money (literally) to pay for the lockdown furlough. But it is now inconceivable that there will be any return to economic normality short of a vaccine being developed for Covid-19 and its mass dissemination. That will take years.

Meantime, whole sections of the economy are simply melting away. Social distancing and quarantine rules will mandate major layoffs in the hospitality and airline sectors. That in turn will kill jobs in aircraft manufacturing, high-street retail and oil. The litany of companies going bust or firing labour is growing by the day: BA, Intu, Swissport. For ordinary folk, the next decade will be worse – if anything – than the previous one.

Surely Boris and co have a plan to get the economy going again. Hence his promise to up spending on infrastructure, including hospitals, roads and prisons. To that end he has created a new Infrastructure Delivery Taskforce. That in itself is a dead give-away. Governments are elected (and paid a lot) to do the delivering. When a Prime Minister sets up a separate “taskforce” you can bet it’s a publicity stunt.

Besides, raising capital investment spending for construction is not an economic panacea. Consider Japan, which has spent the past 20 years borrowing to fund huge infrastructure projects, in an attempt to lift the economy out of a permanent doldrums. This has left the Japanese government with one of the biggest national debts on the planet – nearly two and a half times larger than for the UK. But it has not kick-started the Japanese economy. Pouring concrete does not automatically raise productivity or lead to new technological breakthroughs.

True, increasing capital spending will create jobs in construction and the spending of building workers could trickle down through the rest of the economy. But more likely, this cash will be spent in Primark buying imported clothes or cars whose important bits are made in Germany or Italy. Any actual gain for the British economy will be strictly limited and nowhere near the stimulus we need to treat the battering caused by the lockdown.

Anyway, Boris is fibbing big time when he says there will be no Treasury austerity coming down the road. The Chancellor faces a crash in tax revenues resulting from the economic contraction. That hole will have to be filled. So expect tax rises over the next decade. And never forget: the bigger the national debt, the more the Government pays out in interest. That automatically cuts the cash available for other things, including health, education and social security. Austerity will be back with a vengeance.

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Meanwhile, north of the Border, we’ve had a week to digest the report of the Scottish Government’s advisory committee on rebooting the economy after the lockdown, chaired by ex-Tesco banker Benny Higgins. Tom Hunter, who enjoys the media sobriquet of “Scotland’s most successful businessman”, dismissed the rambling Higgins Report as lacking “meat on the bones”. Sir Tom has a right to be worried. Last week, the Fraser of Allander Institute, an economic think tank, reported that one in seven of Scotland’s 350,000 private firms is in deep financial trouble.

The heart of the Higgins Report is a call for the UK Treasury to lift the existing limits on Scottish Government capital borrowing. Higgins also suggests that the new publicly owned Scottish National Investment Bank (SNIB) accelerate its plans to issue bonds (ie borrow) in order to undertake joint investments with private industry, including green energy projects. As far as it goes, the Scottish Government and the SNIB should have greater borrowing powers. Otherwise, Holyrood remains tied to the UK Treasury’s apron strings. In other countries with a devolved or federal system, it is common for “regional” parliaments to have unfettered capital borrowing power (eg Australia). But there are two problems with the Higgins proposals.

First, an independent sovereign state with its own money can always pay its debts – in the last resort by issuing more currency. But a devolved parliament can only cover debt obligations by raising taxes. That’s OK if you can grow the economy and therefore expand your tax base. But under the present devolution rules, Holyrood has strictly limited powers over company taxation, business law and competition policy. This means the Scottish Government lacks the necessary tools required to grow the economy and its tax base. Which makes it dangerous to expand the Scottish Government’s debt obligations.

Accepting greater borrowing powers for Holyrood without greater fiscal autonomy or control over economic levers is a poison chalice. A chalice Boris might be only too happy to offer the SNP Government. Which might explain why canny Finance Secretary Kate Forbes showed great restraint last week in asking for only a very limited rise in the Treasury borrowing cap. Unfortunately, that means the SNP Government lacks the cash to deal with the threatening economic crisis. Independence, anyone?

The second problem with the Higgins plan is that it stresses process rather than outcomes. OK, so Scotland gets greater borrowing powers – the real question is what do we use them for? Here I agree with Tom Farmer that Higgins fails to come to terms with the concrete needs of the economy. The Scottish economy post-coronavirus will look vastly different. We can’t just seek to rebuild a visitor industry that was unstainable anyway and has certainly altered out of all recognition. We can’t build more roads or airports in a world where we have barely a decade to reverse climate change. We need to replace North Sea oil for environmental reasons but also because the global recession will cripple primary energy demand.

This says we need a written, costed national plan to reconfigure the Scottish economy and the fiscal incentives to get it done within the decade. What new industries? What new skills? How do we shift priorities in further and higher education to retrain the workforce? Are we prepared to raise income tax to pay for higher wages in a revamped and expanded national care service? What about cheap investment funds to help small firms raise productivity and skills? But which sectors should benefit first? The plan needs to lay out the priorities in detail.

We cannot avoid economic trouble ahead. But we can avoid austerity for the many, while only a few grow richer – as happened after the 2008 bank crash. Instead, Scotland needs a national plan for post-Covid recovery and conversion to a fairer, more sustainable economy. A plan agreed by popular consent, one that shares out the gains as well as the sacrifices. We don’t need Boris Johnson’s bogus promises. We only need Scotland to control its own economic resources and use them for the common good.