From response to recovery: economy secretary Fiona Hyslop on a post-COVID-19 economy that benefits everyone

Crisis often begets structural change and the current health crisis, which has forced an economic crisis, has also accelerated debate about building a different kind of future for Scotland, one that is fairer and more equitable.

And for Fiona Hyslop, the newly appointed economy secretary, who herself came into a new post amid a political crisis created by the scandal and then the resignation of the former finance secretary Derek Mackay in February, it has meant operating a twin-track policy of dealing with the economic emergency in the here and now and working on a long-term economic model that will have wellbeing at its heart.

Hyslop, an MSP since the first Scottish parliament in 1999, has sat around the SNP government’s cabinet table in one form or another since 2007.

She is one of the most experienced ministers in Nicola Sturgeon’s armoury and when the First Minister had to unexpectedly replace Mackay, she took the decision in a mini-reshuffle to split the finance portfolio once again into finance and the economy, appointing the relatively inexperienced Kate Forbes to the role of finance secretary and the veteran politician Hyslop to economy secretary, who also retained her responsibilities over culture.

Hyslop has experience across various portfolios, most notably as the cabinet secretary for education and lifelong learning – a role she had previously shadowed in opposition – in the Nationalists’ first term in office, when she had to respond to the devastating consequences of the global financial crash and the subsequent austerity agenda.

She then served as minister for culture and external affairs from 2009, before being promoted back into the Cabinet as cabinet secretary for culture, Europe and external affairs in 2011.

 She held the brief for nine years, spanning both the independence referendum and the EU referendum, when her outward-facing role was pivotal to reflecting Scotland’s place in the world.

She says now that coming into the new economy role just as the catastrophe of the pandemic hit and the economy was effectively closed down, she has had to draw on all of the resilience, experience and the relationships built up during her 13 years in government.

“Well, it was obviously a challenge, but the economy brief is one that I have been very interested in for some time and obviously I have had two or three very strong predecessors in that role, but you just have to take things as you find them and then deal with it, very quickly and very clearly about it in a strategic way.

“So, right from the start, I tried to identify what needed to be done, how do I, not just mobilise my own department and our enterprise agencies, but also the ministers.

“So even before the period of lockdown, I’d identified key ministers to do certain things. For example, Ivan McKee I tasked to look at that reprioritisation of the private sector into a COVID response, and he’s done fantastically well in marshalling teams to build a domestic supply of PPE, Ben Macpherson to look at the pivoting of the public sector and what could be done in those areas, and we also knew that nurseries would be a key area, so Maree Todd was charged with making sure that private nurseries had their needs understood at an early stage.

“And sector by sector I worked very closely, still work very closely, with Kate Forbes to identify what she would work on and what I would work on.

“It’s been about rapid mobilisation in a crisis, but I don’t think anybody really appreciated the scale of this. I was the education secretary during the period of the financial crash, and the economic crisis that is now presenting itself is of a far greater magnitude and impact than it ever was.

“But I remember at that time thinking very carefully, and quickly, about what we could do, and we mobilised, particularly around youth unemployment.

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“We rapidly increased the number of apprenticeships. We brought forward a lot of construction areas and infrastructure projects that are going to be very important in this recovery as well.

“So my experience over a period of time in government has helped me understand the levers that we can pull and the mobilisation we can have of our resources across the civil service but also of our ministerial teams. And we’ve all stepped up magnificently.

“So perhaps having had that experience and working with different people over a period of time has helped me to make sure that we’re working effectively as a team, but also for having that foresight to try and anticipate some of the key crunch points that we’d have to face, and we’re still facing.

“It was a challenge, but I never look back. I always look forward.

“I think I’m fairly resilient and I also think strategically. Those two things, I think, have helped me get through what is, and remains, a very difficult period.

“But what I face as economy secretary is as of nothing compared to the businesses and the workforce that are facing so much uncertainty as we look forward.

“This crisis is one that may be more long-standing than any other. We are facing big issues of collapsing global and domestic demand and so the responses will need to be imaginative, but you know, unlike the previous economic crisis with the financial crash, we have to build a better future and one that is more cooperative.”

The future that Hyslop sketches out is one rooted in the so-called ‘wellbeing economy’.

She has been a long champion of its principles, indeed a vocal advocate for the inherent value of the creative industries and the arts within the economy, and many assume that she must have personally made a robust argument to the FM for coupling culture within her new brief.

The notion of a wellbeing economy may have been, until recently, something of a fringe interest, but the Scottish Government has been an early adopter of the principles, having established the Wellbeing Economy Governments Group in 2018 with the governments of Iceland and New Zealand.

At the time, Sturgeon referenced the work of the Scottish economist Adam Smith, who wrote in The Theory of Moral Sentiments that the value of any government is “judged in proportion to the extent that it makes its people happy”.

And in a speech to the TED Summit in Edinburgh just last summer, Sturgeon argued that a focus on policies that promote wellbeing and not just economic growth could help address the rise of alienation and disaffection from politics, adding that the time for gross domestic product (GDP) to be seen as the only measurement of a country’s success was over.

In a world of growing division and inequality, she said it is more important than ever for governments to focus on broader measurements of health and wellbeing, not just wealth.

“When we focus on wellbeing, we start a conversation that provokes profound and fundamental questions: what really matters to us in our lives?”

Twelve months on and in the midst of a global pandemic that has led to an economic crisis, a widening of inequalities and Scotland’s GDP forecast to shrink by a third, those words now seem prophetic.

Amid the grim forecasts, Hyslop is optimistic about Scotland’s future and says that as Scotland emerges from the catastrophe of the pandemic, “the time for a wellbeing economy has well and truly arrived.”

She says that this crisis has been like no other and that it will mark a departure from all that has come before.

“The financial crash was a financial crisis that ended up being dealt with for financial reasons and the cost of that, it has been austerity, and nobody but nobody, I think even the UK Government realise now, not then, but now, the harm that that has caused.

“You need to have a strong society to be able to deal with the challenges ahead of us, and that’s the point about the wellbeing economy. And we have been well on the track of that.

“If you look at New Zealand, who have been champions of the wellbeing economy, and you look at Iceland, and actually just before the lockdown over in Brussels we hosted with Finland, as part of their presidency, sessions on the wellbeing economy, you see that type of thinking was already there, but I think it’s now come to the fore.

“So when people globally talk about the new normal, we’ve got a bit of a route map already there in terms of that values-based approach.

“If you look at GDP, estimated to have collapsed by 33 per cent over the lockdown period, measures like GDP do not measure necessarily what is important in life and the economy anymore, so we need to make sure that that type of thinking isn’t just prominent in Scotland, but actually globally.

“And it’s an area that we’re getting far more interest [in] now than we would have ever had before.

“Why do I think this has caught on in Scotland? I think it’s got two aspects: both the economic and the social justice aspect, and an understanding that we cannot progress as an economy unless we have a strong society.

“That’s not just recent thinking here. If you go back to Adam Smith’s Theory of Moral Sentiments etc, economics has always been about balances and choices.

“Economics is as much political as anything else and when I studied economic history at the University of Glasgow, it was in the Department of Political Economy precisely because a lot of economics is about political choices.

“This is about an economy that benefits all, and if you also look at things like climate change and the need for inclusive growth, that has to be for the benefit of everyone.

“And we’re looking at some of the pilots on the use of community wealth aspects. There’s some pilots going on in Ayrshire and they can show you can bring in greater economic activity, more jobs, and better paid jobs, that means more demand for local services.

“Now the rethinking globally of supply chains that are disrupted, the rethinking of domestic sustainability of supply chains and manufacturing etc, these are happening on a global scale, but even on a very local scale, resilience will be the watchword for the future. 

“Resilience will ensure that we don’t have a pandemic in the future and if we can do, the step change, for example, in terms of home working, which absolutely will be the central way of working and will be for some time to come, then we can make some of the big changes, for example, in transport, that we knew we wanted to do as part of that wellbeing, net zero economy we want to be.

“In talking to many businesses, and we’ve seen Twitter themselves has said that they want people to work from home on a continuous basis, that’s something that now many companies are realising, that if they were sceptical before, that actually now they have now been convinced that people can work productively from home.

“Doing it in areas, we know, for example, in the financial services, you’ve got many women who work in those areas – [I’m] not saying that women are the sole carers, but we know that during the COVID [pandemic] the research is showing that women tend to take on more of the caring responsibilities for children – if you’re a bank worker and you’re processing all these bounce back loans from your home and you’ve got young children round your feet, that’s a huge challenge, but it’s also why we’ve taken a whole systems approach to how we’re planning that route map through COVID.

“We know from our discussions with businesses that we must get transport and, importantly, education and childcare right before we’ve got any reasonable hope of trying to make sure that businesses can reopen on a productive basis.

“But home working will also mean we’ve got fewer commuters and we can tackle some of our big transport and environment challenges.

“Pre-COVID, we were already thinking about how could we establish community hubs where people could go if they’re working from home, they could go and share premises that public and private sector companies could host, because people are still social animals and although home working will become increasingly the norm and continue, there is a way of doing it that should respond to the humanity we have that we need to meet other people.

“So I do think a lot of people and businesses have recognised we don’t want to go back to the old ways of doing things.

“And if you look at the innovation that has happened through the repurposing by many companies to support the essential needs of the NHS in manufacturing, the partnership working between different agencies at speed has been absolutely remarkable.

“We’ve seen it in the health service, where we’ve completely reorganised the health service in a very short period of time.

“But in every walk of life and in every area of business people have changed and been creative and innovative. So how do we draw on that for the future?

“I also do think there’s something about the strength of relationships that has helped get us through, whether it’s the people’s streets, their neighbourhoods, their towns, their communities, wherever, and I think that is a strength that we can’t, and we shouldn’t, and we mustn’t lose.

“COVID is terrible, and people have suffered, and you know we’ve got to respond to the humanity and the health crisis that we’ve seen, and we should never forget that. And that’s still happening now, so we’ve almost got a twin-track Scotland, one where we’re trying to deal with that health crisis that continues, but also trying to see what’s going to be possible, what kind of Scotland will emerge from this.

“I think the crisis has focused minds and I think it’s accelerated a lot of the thinking and also the practice of what we wanted to do in terms of a wellbeing economy and tackling the climate change emergency and the biodiversity emergency.

“But we have to take everyone with us and this event and how tragic it has been has perhaps turned people’s faces more firmly towards change.

“Change is always difficult and sometimes, unfortunately, in very tragic circumstances, the catalyst for an economic change has been born out of a very terrible tragedy.”