David Hume Institute gives evidence to Scottish Parliament committee

Susan Murray, Director of the David Hume Institute, gave evidence to the Scottish Parliament Finance and Public Administration committee following its response to the consultation on Public Finances in 2022-23.

The Institute is calling for Scottish Government to:

• Publish draft multi-year spending plans to help longer term planning for service improvement, investment and productivity, and increase transparency over forward planning.

• Publish how it has prioritised for a fair and equal recovery, and provide underlying evidence for those priorities, recognising trade offs between shorter and longer term choices.

• Link budget priorities to the National Performance Framework and the United Nations Sustainable Development Goals (UNSDGs), using them to analyse how the pandemic has affected some groups and communities worse than others.  Continued use of the UNSDGs assists collaboration with other organisations and governments around the world.

• Focus on climate action and a fair transition to net zero, faster delivery of digital infrastructure and measures to directly influence reductions in poverty and promote greater inclusivity.

• Work to improve Scotland’s places by devolving resources and putting more power in the hands of local communities.

• Ensure support for jobs where skills can be developed rather than skills development alone.

• Commit to a full review of the Fiscal Framework which considers external changes including the loss of European Funding and new direct spending in Scotland from Westminster as well as the interactions between both devolved and reserved taxes and social securities.

Blog: To field our best team we need a more diverse squad

Blog by Susan Murray, the David Hume Institute

6th September 2021

As the football transfer deadline day passed last week, many teams made key appointments to their squads. Player’s data and match statistics underpinned transfer decisions. It’s no different in business: data matters and should affect the choices being made. 

However, new data from the David Hume Institute shows that business leaders are limiting Scotland’s potential by not prioritising diversity in their top decision makers.  Diversity of thought increases resilience, productivity and innovation as well as improving risk management.  Scotland’s top team is missing out.

The research investigated investment and angel investment leaders in Scotland.  Scotland’s investment companies have less diversity at the top than companies elsewhere in the UK. Although angel investment leaders are more diverse than the bigger companies.

The data on who is, and isn’t securing business investment and who can access the resources to grow is shocking - and again, limiting potential.

The data shows those with resources and connections are more able to reach the top.  This limits the pool of top decision makers and risks group-think - a risk Scotland should be aware of after the last financial crisis.

Business and investment leaders lag behind other sectors, and are not responding to the data linking diversity of thought with successful outcomes.  

So why isn’t change happening faster? 

Studies from around the world show overt and covert bias is limiting the pool - so this is a great opportunity.  Awareness is the first step - just like players on a football pitch, knowing your own statistics helps improvement.  Leaders have the power to champion and deliver change in Scotland.

Three out of ten of the top 50 business leaders also hold positions on other boards, meaning they can influence change beyond their own companies.  Similarly, the power to decide who gets investment is in the hands of the investment leaders.

Why does this matter? Improving gender diversity alone could add up to £250 billion of new value to the UK economy, if women’s new businesses were invested in and scaled up at the same rate as men’s. If women’s participation rates matched men’s there would be the potential of c.35,000 more direct jobs in the Scottish economy.

The leaders have the power to bring change. The country has big challenges ahead and leaders need to rise to those challenges.  Scotland needs its top team on the pitch.

The IOD conference last week challenged Scotland’s Directors to think about the IPCC code red: “the costs of inaction on climate change are greater than the cost of action.  There needs to be a bias towards change rather than a bias against it.”  

The same is true of diversity of thought.  The benefits are widely known and there are costs to inaction.  It's time for Scotland’s top business and investment leaders to bring more breadth to their squad and champion change.

This piece was originally published in The Times on 6th September.

New research shows business and investment leaders are limiting Scotland's potential

Press release from the David Hume Institute

6th September 2021

The David Hume Institute is challenging business and investment leaders to embrace change to realise the benefits of greater diversity in top leadership roles.

Scotland’s leading independent think tank, the David Hume Institute, today publishes new research finding a shocking lack of diversity in the top 200 business and investment leaders, less than in previous sectors analysed by the Institute.

Faster growth in diversity at the top level is needed if Scotland is going to benefit from a wider spectrum of thought leadership to maximise the country’s ability to overcome challenges such as increasing  productivity, innovation and improving risk management.

The research analysed the leaders of top businesses, investment companies, angel investors and family businesses in Scotland. The analysis found: 

• There are still more leaders called John than there are female leaders (7% John and 5% female)

• One in four (26%) have held positions at four services companies (Accenture, EY, McKinsey, PwC)

• 2 out of 3 (65%) of investment company leaders attended an elite university with 1 in 5 of these attending Oxford or Cambridge.  This compares to 49% of Angel Investment leaders who attended an elite university.

• 9% of investment company leaders are female - falling behind the UK average (13%)

• 1 in 5 (20%) of angel investor leaders are female - higher gender diversity than others in the business sector

With 31% of the top business leaders also holding positions on other boards, this narrow pool of decision makers has significant influence beyond their own companies.  

Understanding the diversity of who is making investment decisions in Scotland is critical as access to capital is cited as one of the barriers for increasing entrepreneurs from female and minority backgrounds. 

The research also found

• Three out of ten (31%) top leaders have postgraduate qualifications with 39% of these are MBAs.  

Postgraduate education is becoming the norm for top leaders, so decision makers need to be mindful of who has access to postgraduate education if they want to reap the benefits of diversity of thought.

Susan Murray, director of the David Hume Institute, says:

“The David Hume Institute’s research clearly shows limited diversity of Scotland’s top business and investment leaders. Scotland needs its business leaders to not only champion diversity across their organisations.  They need to be open to more immediate change at the most senior level to reap the benefits of more diverse thinking now.

“Currently those with resources and connections are more able to reach the top.  This limits the pool of top decision makers meaning organisations are risking group-think.  Diversity of thought helps risk analysis, innovation and productivity.

“Every business leader must choose to prioritise diversity of thought as we recover from the pandemic if Scotland’s businesses are to increase productivity and resilience to future risks.  For Scotland to be in the Champions’ League for business and investment we need a more diverse squad.”

Scottish Parliament consultation response: Public Finances in 2022-23

Response from the David Hume Institute to the Scottish Parliament call for views on Scotland’s public finances in 2022-23 and the impact of COVID

About our submission

DHI welcomes the opportunity to respond to the Finance and Public Administration Committee’s call for views on Scotland’s public finances 2022-23 and the impact of Covid.

Our submission draws on evidence from:

• The largest multi generational research project in Scotland in the last five years, The Action Project. In 2020-21 we brought together people from across Scotland to consider the actions needed to move faster towards a more prosperous, sustainable, inclusive and fair country.  Through facilitated conversations with over 5,000 people, we identified actions which will help Scotland build forward better.
  

• Working with partners to reach people of all ages and backgrounds across Scotland.  These included U3A, the Scottish Youth Parliament, the Children’s Parliament and local organisations like InspirAlba in Campbeltown and Resonate Together in Alloa. By listening to the many voices and then analysing themes and patterns, WhatsYourAction.scot presents the findings and encourages others to have their say.
  

• Our 2021 briefing paper on multi-year budgeting, which sets out the enabling action needed for the Scottish Government to publish multi-year spending plans.

Summary

We call on the Committee to recommend that the Scottish Government:

• Publish draft multi-year spending plans to help longer term planning for service improvement, investment and productivity, and increase transparency over forward planning.

• Publish how it has prioritised for a fair and equal recovery, and provide underlying evidence for those priorities, recognising trade offs between shorter and longer term choices.

• Link budget priorities to the National Performance Framework and the United Nations Sustainable Development Goals (UNSDGs), using them to analyse how the pandemic has affected some groups and communities worse than others. Continued use of the UNSDGs assists collaboration with other organisations and governments around the world.

• Focus on climate action and a fair transition to net zero, faster delivery of digital infrastructure and measures to directly influence reductions in poverty and promote greater inclusivity.

• Work to improve Scotland’s places by devolving resources and putting more power in the hands of local communities.

• Ensure support for jobs where skills can be developed rather than skills development alone.

• Commit to a full review of the Fiscal Framework which considers external changes including the loss of European Funding and new direct spending in Scotland from Westminster as well as the interactions between both devolved and reserved taxes and social securities.

Press release: action to make Scotland’s budgeting clearer

11th August 2021

Today the David Hume Institute publishes a briefing paper proposing a new agreement on multi-year budgeting to deliver more open discussion about funding for public services and to enable longer-term planning for their delivery which will support a more open conversation about spending plans and investment choices. 

Over the last year the David Hume Institute’s Action Project considered the actions needed to move faster towards a more prosperous, sustainable, inclusive and fair country.  

Multi-year planning helps effective investment and productivity, and can be particularly useful on longer term projects, many of which are linked to climate action.

Despite repeated calls over many years to publish multi-year spending plans, it has proved difficult for Scottish Government to achieve this.  As public finances become even tighter post pandemic, this will remain a challenge.

Public and third sector organisations want more certainty about funding to allow them to plan for more than one year at a time. Draft multi-year budgets will help public services plan more efficiently as we emerge from the pandemic.

The Institute’s paper proposes a way forward for the Scottish Parliament, Scottish Government and Audit Scotland to make multi-year budgeting the established norm in Scotland.   

Susan Murray, Director of the David Hume Institute, says:

“The Scottish Parliament and Scottish Government must work together to make multi-year budgeting the established norm in Scotland.  More open discussion about money and budgets, the predictions, assumptions and choices being made is important for Scotland is to achieve its climate, economic and equality targets.

The urgency for this change is backed by findings from the Institute’s Action Project - Scotland’s largest multi-generational research in the last five years. 

Multi-year budgeting would have an enabling impact for organisations, businesses and charities across Scotland.”

Notes to editors:

• For media enquiries please contact Susan Murray, Director@davidhumeinstitute.com 

• The David Hume Institute is an independent Scottish think tank which works towards a prosperous, sustainable, inclusive and fair Scotland. Find out more here.

• The David Hume Institute’s Action Project brought together people from across Scotland to consider the actions needed to move faster towards a more prosperous, sustainable, inclusive and fair country.  Through facilitated conversations with over 5,000 people we identified actions which will help Scotland build forward better. 

• The David Hume Institute worked with partners to reach people of all ages and backgrounds across Scotland.  These included U3A, the Scottish Youth Parliament, the Children’s Parliament and local organisations like InspirAlba in Campbeltown and Resonate Together in Alloa 

• WhatsYourAction.scot research investigated people’s thoughts on action they would like to see to build a more prosperous, sustainable, inclusive and fair country. Whatsyouraction.scot is a resource for everyone who lives in Scotland  and wants to build forward better. WhatsYourAction.scot wants to inform positive action by magnifying real people’s voices and helping them know they are not alone.

• This briefing paper was developed with support of the Action Project Steering Group, with special thanks to Eleanor Ryan and Stephen Boyle with additional support from Professor David Bell and Dr Katherine Trebeck. 

What next for Scotland’s places?

Global Expert considers the actions needed to help all of Scotland’s places thrive post-pandemic

A new report by Professor Duncan Maclennan, commissioned by the David Hume Institute, examines how the country can move forward to A Scotland of Better Places.  

The report explores how thinking has to move to comprehending place policies that match real social, environmental and economic systems and that connect places rather than separate them into different, arbitrary categories for policy action. 

Covid shone a light on the places in which we live, work, study, play and grow.  Our places will play a central role in Scotland’s recovery. They are inter-connected, inter-dependent and impact on every aspect of our lives.

The report is part of David Hume Institute’s Action Project investigating actions for Scotland to move faster towards a country that is more prosperous, sustainable, inclusive and fair. The project engaged more than 4,500 people from across Scotland, bringing together a broad range of perspectives. 

Professor Duncan Maclennan said “There is not a single magic action to make all of Scotland’s Places thrive. Over the years there have been many policies, strategies and initiatives, often top down and not involving local people. The events of the last year have dramatically changed many people’s relationships with the places in their lives.  

This is an opportunity to build forward better from Covid-19 and recognise the connections within and between places.  There are major long-term changes required, and much agreement about what needs to change and how to change it. Bold policy choices could remake the sub-national governance and government of Scotland to match modern place challenges.”

Professor Maclennan suggests “Using reformed financial and tax structures, listening to communities and individuals, (and especially younger and poorer Scots) in the democratic processes that will make Scotland a more prosperous, sustainable, inclusive and fair country.” 

Professor Maclennan’s report is based on conversations with over 600 people in webinars.  The conversations revealed the broad range of new ideas that individuals and communities are ready to share and enact with governments.

Catch up with our launch event with report author Professor Duncan Maclennan and Deputy First Minister and Cabinet Secretary for Covid Recovery John Swinney MSP.

Blog: How broad are your shoulders?

Blog by Susan Murray, the David Hume Institute

20th May 2021

We have all had to think about risk a lot over the last 12 months. But how much do you know about the risk in other aspects of your life?  

Our lives have been dramatically affected to reduce the risk of spreading Covid. Decision-makers have had to weigh up risks against other potential harms caused by the consequences of restrictions and talked about this openly.

People see the risk of Covid differently. This led to stark contrasts in attitudes and behaviours. From rising OCD and anxiety disorders for some, to taking to the streets in anti-mask protests for others – these contrasting approaches can also be seen in attitudes to risk in other areas of our lives.

New research from the Institute and Faculty of Actuaries examines what they call the Great Risk Transfer. Over the last few decades, there has been a largely politically driven transfer of risk from organisations to individuals in many aspects of our lives – but with very little public awareness or education.

Until the 1980s, there had been an implicit contract between citizens and governments: in return for their generalised contribution to the nation, the government would provide economic security in times of need.

Over time, this approach gradually shifted, resulting in a modern social system that expects individuals to take on the responsibility for managing risks. The relationship between contributions and benefits has become much more transactional. One result of this is that there are much greater demands on individuals to devote time and effort into understanding and navigating financial markets and risks.

Expanding individual choice can be seen as positive and some parts of society stand to benefit from the enhanced freedom and flexibility this represents.

But making these choices can often be extremely complex. Managing the risks involved often requires an advanced level of knowledge and understanding, and numeracy skills beyond the general population level.

This is one of the big ironies of the Great Risk Transfer: institutions that are well-equipped with systems and processes to manage risk are passing risk over to individuals, who in most cases are not. We should consider the link between our ability to control or mitigate the risks in our lives and our mental health.

The 2015 pension reforms meant many people withdrew lump-sums from pension pots and some spent their cash on holidays or home improvements rather than investing for their future.

But with rising life expectancy and many expected to live well into their 80s, your pension might have to last 35 years and some individuals are now lamenting earlier choices that are affecting their day-to-day quality of life. Despite the free, impartial advice available from Pensions Wise, only a small proportion of people are using the service.

Thinking about saving for a pension is a luxury for many in Scotland today. The nature of many people’s employment is precarious. The rise of zero-hour contracts and the push to self-employment mean often individuals are shouldering more risk than ever before.

In the David Hume Institute’s research, people especially in rural areas, often working in microbusinesses, told us of the need to have multiple income sources to try to make ends meet.

Lack of sick pay or predictable monthly income means reduced financial resilience. The stark rise in food-bank use shows how many people in Scotland are struggling to put food on the table – so they are unlikely to be worrying about pensions, insurance or social care costs in later life.

The Great Risk Transfer has been a gradual but concerted social change, heaping risk onto individuals, which has largely gone under the radar for the general population.

The last year has seen Covid exacerbate already stark inequalities. We have seen those with resources in a position to consolidate and those without, often in insecure employment with little, if any, personal reserves, see increased costs and increased risks.

The changes to pension auto-enrolment have meant many more people are starting to save for retirement. However, many mistakenly assume the minimum auto-enrolment contributions will cover a comfortable lifestyle in retirement. Unless information becomes more accessible, people may only realise at the doorstep of retirement that they have not saved enough.

But it’s hard to think about retirement for young people who might be worrying about getting or keeping a job, or repaying student debt. The data shows, with little exception that, now only young people with parental assets are able to think about buying a home.

For people in this lucky position, few are considering that in many new estates, roads and other services (like street lighting and play parks) have no plans to be adopted by local councils. This means maintenance – and quarterly health and safety inspections for play parks – become costs, and potential risks, shared between a smaller number of people through the annual factoring bills, no longer the responsibility of the local council.

If residents were to fall on hard times, there is no support available to help with factoring costs, unlike with council tax. This is worth thinking about as many opt for new-build dwellings, believing it will lead to reduced property maintenance costs but, like with some of those affected by the cladding scandal, property owners could find out they are shouldering the risks and are personally liable.

Going forward we need to re-examine and reinvent the way risk is shared. Flood Re, a joint initiative between government and insurers, has done this successfully for property in flood zones. But with a quarter of homes across Scotland having no insurance, many are choosing or defaulting to shoulder this risk because money is so tight.

The Great Risk Transfer is arguably one of the biggest factors changing society, and as we consider how we rebuild the economy post-Covid, we have a unique opportunity to re-examine, and perhaps re-invent, the way risk is shared.

This article was originally published in The Scotsman.

Blog: The new Parliament is not business as usual

Blog by Lucy Higginson, David Hume Institute

May 2021

With sanitiser stations, record postal votes and social distancing stretching queues to vote long into the distance, the Scottish Parliament 2021 election was very much not business as usual. The next term of Parliament won’t be either.

The 2021 Scottish Parliament election was billed as being one of the most diverse yet. History was made twice in Glasgow with Pam Duncan-Glancy being the first wheelchair user and Kaukab Stewart and Pam Gosal being the first two women of colour to be elected to the Scottish Parliament. Also striking was the number of international perspectives from candidates who had left Scotland as young children but returned to settle as adults.  

Pam Duncan-Glancy’s 45-minute wait outside of the counting hall when security didn’t believe that she was a candidate brought home the level of change still needed.  In the last session, Jeremy Balfour was the only MSP with a physical disability.  Pam, Jeremy and Kaukab are trailblazers but Parliament is still not representative of wider society. 

In our 2020 analysis of Scottish Parliament less than 2% of MSPs were from a minority ethnic background and of these, all were educated at fee-paying schools. As we analyse the 2021 intake there is a shift, but there is still more to do. 

There is other good news: turnout and engagement in the election was high. There were big changes at Holyrood this year as a number of longstanding MSPs stood down. Many of their replacements only entered politics in recent years and come with a wide range of life experience which will help add to diversity of thought.

As we welcome new and returning MSPs, Scotland must unite to build forward better from the pandemic. Our latest research shows that 3 in 4 people want to take action by being kinder to one another. People are helping neighbours and making more conscious choices with money. Through research conversations apathy with politics and constitutional arguments was passionately voiced. Despite that apathy, high turnout in this election shows high engagement.

Community featured strongly in acceptance speeches, along with sign language from one candidate to send a message to her dad. Listening and learning from the communities they serve will be critical for politicians of all persuasions and they will need to work together for Scotland’s future.

As we emerge from Covid, it leaves us with stark inequalities. Diversity of thought will be critical to recovery.  New decision makers at Holyrood are an indication of progress but much, much more needs to be done for Scotland’s economy to benefit from increasing diversity in the labour market and wider society. There is a clear link between high levels of equality and high productivity in countries like Denmark and this should not be ignored.

We will be publishing a full briefing on diversity in the Scottish Parliament later in the week, once all the data is analysed. (Update: read the briefing here).

Blog: Do we need to find our inner child?

Blog by Susan Murray, David Hume Institute

April 2021

Many of us will know or have children who ask ‘why’ a lot - sometimes so often that no matter how much you want to encourage curiosity and learning, you lose patience and resort to phrases like “because I say so”.  

On the whole though I am delighted to be asked questions. Two recent favourites from my children have been: if two wrongs don’t make a right, why do two negatives make a positive?  And, why do people buy pencils with rubbers on the end, as the rubber always runs out before the pencil and then the metal bit is just waste? A good question for Zero Waste Scotland.

I had never thought about either of these things before and as an adult, I wonder if too often people forget to ask questions.  

The daily coverage of the economy is a good example. For years the economic narrative has been dominated by a narrow range of voices. What has become clear through Covid is every choice can have benefits and consequences. Choices about the economy are no different. And, with choices, there are trade-offs to consider.

Many people that previously felt on a treadmill are stepping off as the pandemic has given them a chance to re-evaluate what matters in their lives. My first visit to the hairdresser post pandemic was a good example. My hairdresser sold her house last autumn. She has moved out of the city and has gone mortgage free by combining resources with her sister and parents on a single property. This solves several problems the family had been worrying about for years; about intergenerational caring responsibilities; mortgage payments and pension worries. Put simply it “takes the pressure off so we can all enjoy life more now and are not worrying about money so much”. 

As many commentators speak of the economy returning to normal, they fail to notice that my hairdresser is not the only one whose life has changed dramatically over the last year. So many people have experienced bereavement, loneliness and loss of income, but even for those that have remained relatively unscathed their lives have changed in other ways. 

My family, like so many, have got a dog. After years of thinking about it and using the website Borrow My Doggy we took the plunge. Lockdown was a great chance for puppy training and our new addition has had a huge positive impact on my children, but this means even when everything is opened up again we are likely to be living very similarly to this moment.  Long family walks and holidays in Scotland. The massive rise in dog ownership means many people’s future economic choices are likely to be different. 

Recent research from the David Hume Institute showed how many people intend to continue their 2020 behaviours in future. Covid brought communities together and many people have experienced the power of being connected through helping others. So what if – my favourite question opener – the economy doesn’t return to “normal”?

Pre-Covid our economy encouraged people to increase their consumption and buy more stuff, but the data shows this wasn’t making people any happier. More and more people are living alone, and we have been accepting this trend by building more single person dwellings, but the data clearly shows people living alone are more likely to be lonely and be financially insecure.

What if we can return to something better than the old normal?

I was listening to Professor Ben Friedman talk recently about Adam Smith and what he really meant by wealth. It showed how much of economic thinking in recent years has been dominated by a narrow mindset and assumptions. Many use the term 'wealth' to simply mean money but in economics, wealth refers to those goods which satisfy human wants, but all goods which satisfy human wants are not wealth.

My hairdresser certainly feels more wealthy now than previously when she owned more stuff. Over the course of the David Hume Institute’s research I have heard so many stories of people making changes to their lives which on the face of it could have a negative effect on GDP - for instance as consumption could go down by combining houses. 

But surely those who argue for a return to normal would not want individuals to continue struggling in their old lives when there is an option to be happier and wealthier in the true meaning of the word?

Blog: Time travelling to Scotland 2070

Blog by Lucy Higginson, David Hume Institute

April 2021

Imagining Scotland in 2070 may feel like another universe, particularly as we are still living in the 2020s time warp where every month can feel like 10. 

For the authors of Scotland 2070 setting out their vision for our children and grandchildren’s generation was crucial in order to get beyond short-term thinking of election-cycle tunnel vision and constitutional questions.

The book sets out 6 ideas for Scotland and discusses the mindset needed to take advantage of new opportunities.

One opportunity opening up because of climate change is a new arctic trade shipping route.  It has the potential to save thousands of days at sea with a new shorter route than through the Suez Canal. Taking advantage of our geographic position on this new global trading passage could bring big opportunities.

Supporting nature and addressing climate change were top priorities emerging from The Action Project, and in Scotland 2070 the stewardship of our land and resources for future generations are key actions.  The authors investigate reforestation and the protection of Scotland’s biodiversity to boost Scotland’s economy, bring crucial rural jobs, and cultivate our global reputation as a leader in climate change. 

For the David Hume Institute the book provided food for thought and a chance to open discussion on a longer time frame.  It was good to hear from Scottish Youth Parliament member, Emily Nix MSYP who will be the same age in 2070 that the authors are now.

Emily highlighted young people want to see better stewardship of Scotland’s natural resources and long-term policy.  But something that needs urgent action is faster progress on access to high speed broadband, especially in rural areas. This is not something that can wait - lack of connectivity is holding some areas of Scotland back, and should be urgently addressed.

These issues came up time and again in research conversations as part of the David Hume Institute’s Action Project, but whilst there was frustration at the speed of progress there has been a huge change in people’s mindsets as we emerge from the crisis. People are no longer willing to return to normal, and have seen through the pandemic the impact they can have on their community and society. 

Everyone has a part to play in building a new vision for 2070 - share yours at WhatsYourAction.scot

People are growing in confidence that they have the ability to change society - Sir John Elvidge

By Sir John Elvidge, former Chair of the David Hume Institute

A lot has changed since I became Chair of the David Hume Institute in September 2015. When I took up the role, the constitutional referendum was behind us, in time if not in terms of the lingering disunity through the heart of our society, the Brexit referendum was not in sight and Barack Obama was in his second term in the White House. The gradual global economic recovery from the banking crisis of the previous decade was proceeding steadily and, in Scotland, labour supply that could keep pace with rising employment was a more pressing challenge than unemployment.

Climate change was a well established focus of international high-level policy discussion but not, for most people, an issue which engaged people's everyday lives. Inequalities which we have failed for decades to resolve, notably in health and in educational attainment, persisted and, in some cases, were widening. Racial discrimination was an everyday reality for many of those living in Scotland who are not white or Scottish-born but we were reluctant to acknowledge something which challenged our image of ourselves.

Today the prevalent discourse proceeds from the belief that the reality we occupied in 2015 was the product of a “broken system”. There is a widespread desire to embrace a redefined statement of the future society and economy to which we aspire. This is engaging people in a way which it seemed difficult to do before the crisis, despite the fact that Scotland has been among world leading countries since 2007 in trying to articulate our shared aspirations through our National Performance Framework.

The David Hume Institute's recent work to listen to the views of a large number of people about their future aspiration and, crucially, their thoughts about the action we might take to get there provides strong evidence that this shared desire is an important part of the reality of 2021.

Finding the paths to fulfilling that shared desire is less straightforward. The Institute’s approach is to stimulate people to discuss and work together to answer those questions, rather than to start with a set of pronouncements. That isn't as easy as it might seem, particularly when the absence of ready answers to the questions can make some people uncomfortable and defensive.

The Institute has experience of the way in which a substantial evidence-based report seeking to inform discussion about tackling a long-term challenge with our economic performance, in the form of low productivity, can fail to bring change, despite the strength of the evidence. Although that report stressed that the challenge was by no means confined to Scotland, within the United Kingdom, and that the real worry is our poor comparison with other countries, we found that complacent comparison with the English regions was often used as a reason not to engage.

We have turned in recent months to a fresh approach, which starts from the questions with which people feel the strongest desire to engage. With the support of several committed partners and the willing engagement of over 4,000 participants, we have spent the past six months engaged in a process of discussion of what actions offer a pathway to a better future.

We have deliberately started from a focus on what individuals, communities and businesses can do to create change rather than by adding to the usual preoccupation with government policy changes. We have made sure that the discussion reflects the views of different parts of Scotland, recognising that the voices of those communities are often not heard with as much attention as the voices of our cities.

Thanks to our partners, we have been able to draw in the voices of young people, whose reliance on the best decisions about fulfilling aspirations for the future is greater than anyone else's and who bring open minds to the discussion. We have also sought to draw in those who would tend not to engage with traditional ways of exploring policy choices.

This is a discussion which will grow in volume and effectiveness. One reason for that is that we are building forward by highlighting what people are already taking the initiative to do, whether it’s businesses adapting to the dramatic changes or communities working together in new ways.

People are growing in confidence that they have the ability to change society, including the economy. Bringing people together with different backgrounds and experience in conversation has been powerful. We hope that will lead to continued engagement to allow positive change to gain momentum.

One of the distinctive features of this approach has been to treat the conventional focus on what governments should do as the final question in the chain, not the first question. One of the clearest lessons from the pandemic has been our reliance on the actions of the people who make up the fabric of our community at least as much as on the actions of governments.

I am pleased that the end of my period as Chair of the David Hume Institute coincides with the Institute placing itself at the heart of that opportunity to give voice to the practical wisdom of all parts of our society. I am grateful to the supporters whose funding has made this possible. I hope that others will add their support, in various ways, to enable the Institute to make the most of the opportunity.

Above all, I hope that people will join the thousands of our fellow citizens who have brought their voices and their actions to the vital process of working together to make Scotland a more prosperous, sustainable, inclusive and fair country. Every day, further practical actions by individuals can help achieve the shared aspirations for our future. The Institute's website offers an easy gateway to doing that.

This article originally appeared in The Scotsman on 29th March 2021.

Money, relationships and mindset change

By Susan Murray, David Hume Institute

31st March 2021

One of the core aims of the David Hume Institute is to increase diversity of thought.  This includes bringing international insights from around the world to Scotland. In the past we have often done this through academic links but last year we worked with WEvolution, the Glasgow based self reliant organisation, on a speaker series of changemakers from the Global South.

A full report has been written up by WEvolution on the insights from these changemakers that featured in this series.  There was one overriding reflection: lasting change happens through individual relationships, and especially when change is supported in an individual’s relationship with money.

The examples from Catherine Wanjohi described how local self reliant groups transformed women’s relationships with money and education. Salomon Raydan explained how becoming shareholders rather than savers changed mindsets for some of the poorest people in Venezuela. Reflections were similar to those from Professor Linda Scott on the transformative difference that Avon entrepreneurs made in Africa despite judgements made by aid workers on this business approach.

Economic freedom has the power to bring great change.  

The partnership with WEvolution bought speakers and insights we might not have heard on our own and prompted us to think more about people’s relationship with money as a critical factor in economic and social change around the world.

Closer to home, why are many people more comfortable with giving “stuff” for example through foodbanks than supporting the poorest in Scotland into a financial situation where they have freedom of choice through systemic change.  At the moment choice in Scotland is closely linked to financial resources. This was an issue Darren McGarvey explored in his recent documentary: from the concentration of bookmakers in our poorest communities to availability of shops to buy healthy food, the resources you have - or don’t have - can define the resources you get.

For the speakers in the series, working alongside individual’s to support them to change their relationship with money has been a way to unlock potential but as the final event in the series with Aloysuis Fernadez discussed, it is not enough.  The former World Bank economist discussed the old proverb, if you give a man a fish, you feed him for a day, if you teach him to fish you feed him for life.  However structural inequality means that is not enough, “even when you can teach people to fish, they still can’t reach the river, or if they get to the river and all the fish are gone. Teaching is not enough.”  

More has to be done to level the playing field and this means working alongside people, listening and redesigning systems with them to remove barriers.  

Self reliant groups are a way of people supporting and championing each other. There is a removal of the traditional power and control dynamics of finance or philanthropy as people in the group are equal.

The event series echoed findings from our latest research as part of The Action Project. As we emerge from the pandemic, people in Scotland are making more conscious choices with money and are ready to engage with the economy differently than pre-Covid.  In the words of Nobel prize winning economist Esther Duflo, “Economics is too important to be left to economists” - and as we heard from Dr Arun Advani, the narrow backgrounds of economists risks group think, so it's in all our interests to play a more active role in the economy.

Read the full report on the #GlobalSouthSeries here. 

In the Action Project conversations, we heard from people taking action to build a Scotland that is more prosperous, sustainable, inclusive and fair. Share your action for change at WhatsYourAction.scot. 

Challenge for Change - diversity and economics

Challenging misconceptions about economics is essential to attract more diverse people into the profession. It’s time to bin the assumption that economics is just maths and a bit of money, and recognise the role it plays in changing our society. 

Dr Arun Advani and Mairi Spowage discussed at a recent David Hume Institute event the current lack of diversity in economics - both in economists and the subjects of economics research.  

Dr Advani’s research investigates diversity of academic economists and the topics of research papers compared to other social science subjects. For instance, economic papers related to race by volume of publications are at the same level political science was 30 years ago and where sociology was 40 years ago. The research also highlights how economists overestimated how much research was undertaken related to race. 

Arun and Mairi discussed how lack of different life experiences can lead researchers to make assumptions and not thoroughly interrogate data.  Increasing diversity of thought in the profession will help ensure rigorous research questioning and help to reduce the risk of bias.

Arun and Mairi also discussed the need to change the perception of economics as an area of study. Too often economics is painted as a field of maths or a subject solely focussed on money, rather than a social science open to interpretation. Economics can be about all areas of social policy and human behaviour - and is virtually limitless in the topics it can analyse.

The challenge is to shake off the old image and encourage more people into the profession both from school and career changers.  Mairi herself followed an unusual route into the profession with her early career being in statistics.

Watch the full event again here:

Find out more about David Hume Institute’s work on diversity of leaders in Scotland. 

It all started by saying yes

Kieran from Fife took part in a David Hume Institute community conversation in November 2020 when he was 14.  He tells us in his own words why we should all listen to young people as equals.

“It started three years ago with saying yes.  I said yes to the chance to be outdoors for two lessons a week at school in a local wood.  Since then I have planted trees and learnt loads and I’ll soon have a qualification in countryside skills.

Being outdoors really helped me and I loved it, so I got involved more at weekends out of school hours.

Last year when the chance came to be involved in a conversation about our area, I said yes again.  I jumped at it.  I was nervous but my teacher and my mum encouraged me.

I didn’t know what it was going to be like, but I care about my local area so wanted to be involved. Too often young people are only asked about things people think are young people things, like school.  Young people get used to not being listened to about community issues so I think that is why more people from my school didn’t say yes to being involved.

The conversation with the David Hume Institute was different.  It was led by Ruth from the Roots programme and there were all sorts of people there.  People in professional roles alongside all different people from the community, including my school bus driver.

Ruth made it clear at the start that we were all there as individuals and all equal.  Some of the older people weren’t as good with technology as me and I could see they were nervous too. Being on Zoom was really good as we were all the same – and Ruth encouraged everyone to speak.  She was strict in not letting anyone dominate the conversation too, everyone got heard not just the loudest voices.

Parks and greenspace came up a lot, as well as litter.  They are all things I care about and have been volunteering to improve.  Some of the older people have now got involved with a project I volunteer on.

I really enjoyed it.  It was interesting to hear what different people thought, especially when their views were different from mine.  We don’t get enough chance to hear people different from us. 

Too often, children and young people’s voices are collected separately or filtered by adults.  Being able to say what I thought and being listened too as an equal should be everyone’s right.  It shouldn’t matter who you are, where you come from, or what age you are.

I enjoyed the conversation so much I have now got involved giving my opinion in other places.  Being heard is powerful and I want more people, no matter what age they are, to experience it.”

Be brave and say yes to being involved. Join Kieran and tell us what you think at WhatsYourAction.scot.

Blog: Who holds the seats of power?

Blog by Susan Murray, David Hume Institute

March 2021

The last few weeks have seen a flood of headlines from around the world about antiquated British views.  It doesn’t matter what you personally think of Meghan Markle or the monarchy, for many international observers this affects their perception of the UK as a progressive, fair and diverse country.

This matters.  Our global reputation has a direct impact on vital parts of our economy, particularly trade and tourism.  And, at a time when the economy is facing the biggest recession on record, we should all be worrying about diversity.

Diversity matters, not only for our economy, but for the strength of our decision making. 

Last year, our Team Scotland research investigated diversity in the top leaders in Scotland; and power featured consistently in our latest research, What’s your action?.  Who has it, who needs it and who needs to cede it, in order for more, and faster, progress to be made?

As we move on from another outpouring of vocal support for equality and diversity after  International Women’s Day, some will be sticking their heads firmly in the sand for another year on the antiquated tradition of primogeniture for the House of Lords. While it’s good news that No.10 is now looking at this issue, its proposals – and that’s all they are at this stage – come ten years after the monarchy embraced equal rights before the birth of Prince George.

Today, there are 92 men in the House of Lords because of hereditary titles. Eleven of these are resident in Scotland. Women cannot hold these seats when families still operate primogeniture for titles.

The debate has been deflected to encourage more women into non-hereditary seats but this ignores the core issue of men gaining significant position of power based on their gender.  Currently there are 223 female peers in total – 28% of the Members of the House of Lords.

The House of Lords has increased significantly in size since the turn of the millennium taking the overall size of the Lords to over 800 members - well above the 600-member cap, and larger than the House of Commons' 650 elected members.

Although hereditary Lords now have less influence than they used to, with one eighth of the chamber reserved for them, they still have influence.  

This interview with Charlotte Carew Pole who founded the campaign Daughter’s Rights unpicks the inequality at the heart of this issue. 

The David Hume Institute listened to over 4,500 people across Scotland.  All of them wanted their voices to be heard.  Power came up again and again in the research, What’s your action? - who has it, who needs it and who needs to cede it, in order for more progress to be made?

Primogeniture is a clear example of structural inequality that needs to be urgently addressed.  The UK cannot class itself as a modern country while this historic male preference continues. Brexit means constitutional changes are back on the table. Weeding out structural inequality should be the first item on the agenda.

If the UK wants to avoid being seen as an antiquated northern backwater, we need to embrace the full benefits of gender diversity or the economy, and society, will suffer.

Blog: Want to change the world? Start by listening

By Lucy Higginson, David Hume Institute

15th March 2021

“We all have something to offer, just some of us have lost the connection with ourselves, so it's hard to talk about what we want...

Why hope and think of ideas when you are ignored anyway.

Taking part made me feel I had something to say and I did.”

‘John’, Clackmannanshire

Across Scotland in 2020, we started conversations; with people in different places, from different backgrounds and with different life and professional experiences. Some had experience of engagement with policymaking but many had never been involved in this kind of conversation before. Some had been involved in past consultations of one sort or another and felt not listened to or disenfranchised by the process or outcome.

From the start, The David Hume Institute pledged that The Action Project would be different.  It had to be about listening.  And, it had to be us working in a way that enabled people to take part beyond the usual suspects.  This meant working with partners to tailor our support to individuals.  It was the difference between equality and equity of involvement.

What resulted was the largest inter-generational research exercise in Scotland in the last 5 years. We worked in partnership with local organisations on conversations with mixed age groups as well as national organisations such as the Children’s Parliament, the Scottish Youth Parliament and U3A groups across Scotland.

What we’ve heard throughout these conversations is disenchantment with politicians and policymaking. Some people felt so disenfranchised they didn’t see any point in voting. Power came up again and again as an issue affecting who gets listened to.

For years now some people have been challenging the phrase “hard to reach”. People are not hard to reach - you just have to make more effort.  It takes time and trust. You might need to adapt your process. But too often this means policy makers do not try hard enough. 

Together with partners, we have been listening to people talk about what actions they would take to make Scotland more prosperous, sustainable, inclusive and fair. Throughout these conversations, and echoed in anonymous polling, was the call to be actively kind, to support nature and the environment, and to be conscious with our spending. Irrespective of what the conversations were about, these themes were present again and again.

Diversity is critical. 

For the David Hume Institute, this echoes our research last year into the diversity of Scotland’s leaders. Lack of diversity limits perspective and risks group-think. Businesses are losing out, communities lack representation, and institutions stagnate if we fail to address Scotland’s diversity of thought.

We worked with Angela, from Resonate Together in Clackmannanshire, who has been supporting people in her community to feel listened to for more than 10 years. She summarised this problem:

“The disconnect across communities in Scotland cannot continue. Not only is it exacerbating the inequalities, but it costs us all so much more money and as a forward thinking society, Scotland needs to do better. DHI knew to hear real voices trust was important. Local community connectors, like me, were given support to enable people to connect in a truly authentic way. Building trust within a relationship takes time and is core to 'enabling' a mutual opportunity; dealing with areas of anxiety, depression, lived experience, addiction and so many of the feelings and experiences that a difficult life and environment can bring, are often huge barriers to connecting with others.”

Since October 2020 The Action Project has engaged over 4,500 people on the question of actions we can take. We will continue to reach out to more people through WhatsYourAction.Scot.  Engaging widely and across different demographics as equals has shown an energy for action to help each other that we know is a key to unlocking faster progress.

Throughout this research, the process of conversation has been powerful. All sorts of different people have found, we have more in common than we might have thought.

Share your action and read more on the research at WhatsYourAction.scot

Research shows Scots’ priorities for action post-pandemic

People want to ensure “good” comes out of the pandemic and they are taking action to make that happen. 

The David Hume Institute today launched WhatsYourAction.scot after listening to over 4,500 people across Scotland in the largest inter-generational polling and research exercise in the last 5 years.

The research, which included nationwide polling and group conversations, showed people in Scotland are taking action to be kinder, care for the environment and being more conscious about how and where they spend their money, among a host of other actions.

Everyone has choices every day that can help build forward better.  

The research also showed that individuals and communities are encouraged by hearing about others taking action in their own lives. WhatsYourAction.scot aims to inspire and record some of the actions – big and small - that people across Scotland are taking to make a difference.

Susan Murray, director of David Hume Institute, said:

“Our research clearly shows that people want their lives and communities to be different.  The pandemic has focussed people’s minds on what is important to them.

“People told us their priorities are being kinder, supporting nature and climate change, and making conscious choices with money.  People have realised where they choose to spend money makes a difference to others.

“Many people have good ideas and enthusiasm but sometimes they want to know they are not on their own.   In research conversations, people told us that hearing about the action others have taken encourages and inspires them. 

“We are launching WhatsYourAction.scot so that even more people can share the action they want to take.”

Susan added:

“We want as many people as possible in Scotland to engage with WhatsYourAction.scot. A single action – no matter how big or small can impact on yourself and others. The collective effort of individuals and communities can drive change in the areas that matter most to our society. We can all make a difference.”

Talking tax: Burden, duty or responsibility?

By Susan Murray, David Hume Institute

4th March 2021

Anyone who listened to the budget yesterday will have been listening through the lens of their personal experience, and that includes journalists.  The negative framing of tax limits understanding and discussion.  

The headline on this BBC News webpage changed throughout the course of today from “Budget 2021: UK's tax burden to 'reach highest levels since 1960s' to “Budget 2021: Rishi Sunak insists Covid-recovery tax rises fair”. The words tax burden jump out in the first first version. It is a term we see again and again and is perhaps overlooked. But the word burden is loaded, and is one whose meaning has changed over time. 

The historical meaning of the word burden was about duty and responsibility and it was in this sense that it was used in relation to tax.  Now the common meaning implies a weight dragging you down, rather than a moral responsibility to help others benefit from pooling risk and improving society collectively.

At recent David Hume Institute events we heard from Professor Benjamin Friedman on how Adam Smith’s Invisible Hand and the word wealth has changed meaning over time. Adam Smith’s use of the word wealth was much more akin to the word wellbeing today.  Professor Linda Scott spoke of the myth of “rational economic man”, a stalwart of economic education for years.

For tax, the word burden now seems loaded in negativity. It is less about responsibility and obligation and more about a heavy load being carried.  The word burden seems to come with the presumption that the load should be reduced.

I was struck recently watching the brilliant Ruth Jones on Who do you think you are? She investigated her grandfather’s role in creating Medical Aid Societies in South Wales, a forerunner of the NHS.  It was all about pooling risk and this seems to have been long forgotten when we are talking about paying tax or national insurance. 

Will Covid make a difference to views about collective solutions for managing risks?  How would we have faced Covid if the NHS hadn’t existed? 

Throughout our recent inter-generational research we heard contrasting views about tax which we will talk about more in the coming weeks. More accessible information about tax could improve understanding and empower the general population to hold government to account. 

Ten years after the publication of the Mirrlees Review, the level of quality debate around tax remains limited.  Yesterday’s budget announcements showed little impact of the Office for Tax Simplification, so what will bring change?

Last summer ICAS published The Future of Taxation in the UK which called for an open discussion about tax as a common good.  We need this now more than ever and we all have a part to play. It’s time to talk about tax without a language barrier.

Join the David Hume Institute in conversation with economists Dr Arun Advani and Mairi Spowage on 22 March to discuss Dr Advani’s latest research on diversity in economics. Register here.

DHI welcomes four new trustees

The David Hume Institute has announced the appointment of four new trustees alongside the promotion of existing trustee and former partner at Baillie Gifford, Ken Barker, as chair.

The new trustees are: Prof Jan Bebbington, director of the Pentland Centre for Sustainability in Business at Lancaster University;  Mark Chadwick, a senior executive with NatWest Group; Eva Groeneveld, policy and stakeholder manager at the Competition and Markets Authority; and Uzma Khan, Deputy Secretary and Director of Planning at the University of Glasgow.

Current trustee, Ken Barker will replace outgoing chair Sir John Elvidge who served as Permanent Secretary at the Scottish Government between 2003 and 2010. Ken will take up the position of chair at the end of March. 

Susan Murray, director of the David Hume Institute, said: "We are delighted to welcome such talent to our board at a crucial moment for public policy debate in Scotland.

"We face a complex and changing world, in which objective, independent economic and public policy analysis is vital.  Our new trustees position the David Hume Institute well to secure and expand our contribution to diversity of thought in Scotland.

“I would like to thank Sir John Elvidge for his outstanding leadership of our board over the last 6 years. His tenure has seen the David Hume Institute expand our work and increased the range of voices heard in public policy.”

Ken Barker, incoming chair of the David Hume Institute said: "I am honoured to be taking on this role at this time of unprecedented changes in the economic and public policy landscape of Scotland, the UK, and world. The David Hume Institute enjoys a unique place in Scottish public life and our upcoming work will see the Institute provide a fresh and informed perspective on the public policies affecting the people of Scotland.”

Is rational economic man dead?

Blog by Susan Murray, David Hume Institute

25th February 2021

Put simply, yes. 

For the much more detailed answer, read Professor Linda Scott’s The Double X Economy. The book is a whistle stop tour of anthropology, history, science and economics. It firmly positions economics as a social science and shows how interpretation can vary depending on your personal experience.  Professor Scott’s much longer answer is that rational economic man never existed other than as a concept in textbooks.

The Double X Economy does for economics what Caroline Criado Perez’s book Invisible Women did for data. It brings together research from many sources and systematically debunks myth after myth relating to economics.

It is no wonder that the book is being shortlisted for business and science writing prizes, and in 2021 is being translated into 40 languages.

The Double X Economy discusses the historic origins of the myth about women’s inability to manage money.  And how this is connected to the lack of women’s voices being heard in economic debates or taken seriously as academic economists. For too long only a limited number of voices have been heard when it comes  to our economy.

I’ve heard many of the myths mentioned in relation to business in Scotland. For instance to explain away the stark differences in who receives venture capital funding “Women just don’t start the kind of businesses that scale.”

Linda examines this self-perpetuating funding cycle, that male-led businesses receive more funding and so they are more able to grow, so are deemed to be more successful, and the cycle goes on. Although there have been some in-roads in terms of new angel investors targeting women-led businesses, the majority of VC funding is still received by a narrow group of people.

The data clearly shows the volume of missed opportunity from an unequal economy - not just in terms of starting and growing businesses, but also in terms of managing and governing them.  By not valuing diversity of thought in business we are failing to allow organisations to benefit from a wide range of experience that can make organisations stronger - as well as risking group-think. As the David Hume Institute found in our 2020 analysis of Scotland’s top leaders, almost every sector in Scotland suffers because it lacks diversity, but business suffers the most. Just 5% of Scotland’s top business leaders are women. 

If we want a thriving economy it is time to stop wasting talent.  We must value diversity in all its forms and all work harder to achieve it. 

If you missed the event with Professor Linda Scott and Rachel Statham or would like to watch again, the recording is available here. Subtitles are available through YouTube.

If you are interested in diversity of thought in economics, join the David Hume Institute in conversation with Dr Arun Advani and Mairi Spowage on 23rd March to discuss Arun’s latest research on diversity in economics. Register here.