Coronavirus could have as big an impact on Scotland’s economy as the loss of heavy industry did in the 1980s, MSPs have been warned.
Robin McAlpine, director of the Common Weal think tank, insisted ministers had to be “bold” in dealing with the situation, urging them to draw inspiration from famous American president Franklin D Roosevelt – often referred to as FDR.
In the wake of the Great Depression in the 1930s, he proposed a New Deal to help build economic recovery.
Mr McAlpine warned MSPs on Holyrood’s Economy Committee that the Covid-19 pandemic could have “as much of a disruptive impact as the deindustrialisation of the 1980s” – when the Thatcher era saw Scotland lose much of its traditional heavy industries, such as mining and steel making.
Speaking about the pandemic, he told ministers: “All sorts of problems are still coming – be bold or you will regret it.”
He called on the Scottish Government to “take a value judgment” about what jobs should be supported, suggesting this should be focused on manufacturing, high-quality service jobs and those in the green economy.
The virus has “accelerated” changes in the economy, such as the move towards remote working and the growth in online shopping at the expense of traditional high streets stores, he added.
Mr McAlpine said: “My best judgment is that this going to have as much of a disruptive impact as the deindustrialisation of the 1980s. That is the kind of scale we are talking about here, a permanent restructuring of the economy.”
With the country facing not only the economic impact of Covid-19 but also fully coming out of the European Union at the end of the year, he told MSPs: “The standard practice is don’t make a value judgment, stand back and let the market correct, but this is not a normal market, we have to make some value judgments and I think we should just simply straightforwardly learn the lessons of the past.
“This is FDR time, this is great depression time, this is two economic crises back to back, we won’t recover from the last one by the time we hit the next one, this is a big deal.
“We have got to be thinking FDR and the obvious FDR thing is a green new deal to create an enormous number of jobs.”
His call came as he warned the pandemic could see many small Scottish businesses lost – with multi-national chains, which are better placed to survived, then likely to take their place.
Mr McAlpine said: “What happens if we don’t get this right is the small local cafe can’t continue to trade for another nine months during Covid restrictions and the local cafe or the independent or community cafe closes.”
While he said politicians had been focused on saving jobs, he stressed the need to also “think about the balance of the economy, and the balance of the economy we are going to have after this”.
Mr McAlpine said: “What I really want to emphasise is that if we allow the attrition, the problem that businesses are having during the course of Covid to take down businesses who do not have reserves, but allow businesses who do have reserves to continue to work, the risk is what we lose is Scotland’s indigenous industry base, our domestic industry base.”
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