The loss of Alexander Dennis was not inevitable, it was a failure

There is something of a consensus building around the loss of the Alexander Dennis bus factory in Falkirk. It goes like this; forget the noise generated by the issue becoming a political football, this was just the law of nature and there is nothing that could be done about it.

What this analysis reflects is the desperate failure of economic policy in Scotland, a failure so great that no-one involved in the policy at any level – setting, implementing, commenting, writing about it – can see any way anything could be in any way different than it is. There is just The One Economic Policy.

Alexander Dennis's fate is being registered as 'just one of those things' because it is owned by a Canadian company which, the wise heads of Scottish economic policy sagely note, is purely following its own commercial self interest. This is simply capitalism working.

Except that is to excuse one failure by citing a previous failure which in turn is the result of a previous failure. Justifying your failures as inevitable based on the outcome of your previous failures is a dreadful admission that the whole overarching policy framework is broken.

Common Weal has a particular interest in this. We have used the Alexander Dennis bus factory in the past as a case study of why existing policy is not working and why the Scottish Government should change track. It is a very good indicator of four key arguments we've been making.

The first of these is that we have too much service sector in relation to our productive manufacturing sector and manufacturing should be treated as a 'national asset' which needs particular protection. This seems to be anathema to the finance-sector-minded economic development types in Scotland.

Second, public procurement is not just a means of buying things cheaply. We have argued this point relentlessly and have had some success. The Scottish public realm spends billions and billions on procurement, from potatoes to motorways, stationary to ferries. These are powerful economic development levers that should be used to support your economic policy.

Officials in the Scottish Government reject this and claim procurement is always a case of 'lowest possible price', even if this undermines your own domestic business in favour of foreign corporations. Scotland needs busses; we should have been in an active commissioning relationship with Alexander Dennis at every stage.

This takes us to the third point; we need an industrial strategy to transition us towards net zero and a company that is itself transitioning towards zero-carbon mass transit (with hydrogen-fuelled busses) is a nail-on example of how you should be using public investment to reshape and strengthen the economy for the era ahead.

But that was not done. Instead, in 2019, the Scottish Government stood around blankly while the company was bought over by a Canadian rival. In fact not only did they stand around blankly, they will actively have celebrated this. The purchase of Alexander Dennis will have contributed to Scotland's 'foreign direct investment' statistics. This is what FDI looks like.

This is our fourth point. Common Weal has been almost alone in pointing out that domestic ownership of the domestic economy is important. Almost everyone in the commentator class and in economic policy circles has seen this as irrelevant. We have proposed multiple 'anchoring strategies' to keep companies Scottish-owned.

For example, we would have gone out of our way to ensure that Alexander Dennis was getting 'green transition' contracts that secured the business in the long term (probably encouraging further diversification) in return for contractual agreements that it would not sell to a foreign owner for at least a given timespan (perhaps 10 years).

All public loans and subsidies would be conditional on retention of domestic ownership. And of course we would create a corporate governance regime in which a third of every board of every company with more than ten employees would have to be set aside for employees (though this can’t be implemented by Holyrood). Unlike shareholders, employees tend not to want to sell businesses to foreign owners and take steps to avoid that.

So no, the loss of Alexander Dennis is not 'just one of those things', it is a very specific Scottish failure, one of what increasingly feels like an endless string of Scottish failures. Our failure to help our domestic industry base grow (we have almost no SME-to-large transition companies) and to retain ownership of that base is the result of 'Scottish Enterprise Brain'.

If the only success Scottish Enterprise can claim is flogging Scottish businesses to the highest bidder and then calling it Foreign Direct Investment, it is also time to abolish Scottish Enterprise and replace it with an organisation which is not content to watch complacently as Scotland loses ownership of its own economy.