NO ONE needs another commentator suggesting that the Covid situation in Scotland is worrying. So I will just note that others think that it is a matter of considerable concern, and then wonder what that might mean for the Scottish economy over the coming months and years.
I do not have a crystal ball. No one does. So, I cannot be sure how rising numbers of Covid cases will impact the NHS. Nor can I know how the Scottish Government might react to whatever happens. Come to that, nor can I know what Westminster will do. But there three things that are predictable.
The first is that increasing case numbers will cause significant disruption to life in Scotland. Sick people need to be cared for. And young sick people do, if anything, need more care, as most parents know.
Second, significant amounts of sick leave or time taken off to care for those who are sick is seriously disruptive of work life because of employee absence.
Third, being sick, and having to take sick leave hits people’s economic wellbeing. Sick pay is frequently less than full pay. And when budgets are already tight that hurts.
Simply consider these three things and the supposedly rosy post-pandemic economy that the Bank of England was predicting Scotland should be enjoying by now looks to have been a decidedly optimistic forecast. It was the belief of the UK Treasury and the Bank of England that once lockdowns began to be eased in April pent up consumer demand, fuelled by the excess savings that everyone was meant to have accumulated whilst forced to be at home, would drive economic growth.
That forecast looked as though it might be right for a month or two, but by the time almost all Covid restrictions were removed about a month ago things were already looking very different. Everyone who could afford to do so had bought their post-lockdown treat and those willing to socialise had been out for meals again or simply gone to the pub with friends. Once those things had occurred it became clear that the forecast return to normal was not happening.
Buchanan Street during last year's lockdown
You had only to walk around and talk to real people to realise why this was the case. Not only were many more elderly people refusing to come out of much of their lockdown, but many of the rest of the population saw no reason to be optimistic.
They have good reason for that. For example, even now 1.7 million people across the UK as a whole are still furloughed from their employment, meaning that it is likely that at least 150,000 people in Scotland are in this situation, not knowing whether they will have a job at the end of this month when this scheme comes to an end. Many more people are facing a £20 pounds a week cut in their Universal Credit. At the same time the likelihood of short-term inflation, particularly with regards to food, is high whilst gas and electricity bills are definitely going up this winter.
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Add all that up, and put rising Covid cases into the mix, and it is hardly surprising that most people in Scotland will see no reason to be optimistic about the economy right now, whilst the bad news is that the Scottish Government does not have the devolved powers to address many of the issues that might arise. That includes extending the furlough scheme that is funded by Westminster, where it seems that Rishi Sunak is quite determined to now impose austerity as if we have been enjoying ourselves too much during the course of the lockdown period.
The appointment of a new chief economist at the Bank of England this week who does not believe that quantitative easing should be used to fund government spending only adds to my despondency. The chance that there is an interest rate rise on the horizon has increased considerably with his appointment, which can only add to the woes of anyone who has a mortgage.
One of my favourite songs from the punk era was Ian Dury and the Blockhead’s "Reasons to be cheerful, part 3". I’d like to share some such reasons now. But candidly, they’re hard to find, and I can’t, all of which makes the case for an independent Scotland so much easier to make.
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