It’s the Stupid Economy

Let’s get this right. Before last September, Unionism decreed that Independence was Bad and devolution was Good – just its limits remained ill-defined. Now, further devolution in the form of Devo Max is Bad and, if anything Badder than Independence.

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Devo Max will variously ‘be unsustainable, destroy the economy, lead to huge service cuts, tax rises’…etc. all leading to Armageddon Two. When we proposed unhooking from the UK, it was a stupid idea because, mainly, we couldn’t afford it. Now that we’ve said OK, we’ll stay but would like to take on a significant amount of responsibility for ourselves within the Union, the response is: That’s (also) a stupid idea. You can’t afford it.

When the oil price is high, we should celebrate the Union and be grateful…no need for independence. When the oil price falls…we’d be mad to go it alone.

This is the double-headed monster that is Britain – we’re the place where fair play was born – except we kidnapped people for torture; we have an independent civil service – except when the Permanent Secretary at the Treasury decrees secretly that impartiality doesn’t apply; we’re the family of nations – where Scots don’t qualify to share their own currency; and now we’re the place where the Prime Minister offers Devo Max and then withdraws it when he gets our votes.

In the context of the General Election however, I think the Unionist attempt to undermine the SNP with the Gers figures and the oil price misfires and may be counter-productive. (I’ll come to the economic issues in a moment). One of the seemingly unlearned lessons of the referendum is that you can’t sneer at your own country without arousing antipathy. Yet all I hear from Jim Murphy, Kezia Dugdale and the trumpeting Jackie Baillie is undisguised glee at Scotland’s predicament, parroting the same words that English trolls use in tweets about low income, not enough resources, reliance on bloc grant (English taxpayers) and a background of whoops of delight that our country would struggle economically. Does anybody think this is good politics? Do they ever listen back to their own words and put themselves in the place of a voter? They don’t, of course, and probably can’t, because their whole raison d’etre is to attack the SNP and any wider perspective like an obligation to the nation, lies mute.

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Surely the defining difference between the campaigns was the optimism and aspiration of Yes and the relentless Ye Canny Dae It mantra that actually lost votes for No. And they’re still at it, reliving the campaign as if it wasn’t over and repeating the same errors.

The time for making a case against independence has gone and the voters know it. This time, they want to deliver a bloody nose and they know for certain it can’t lead to independence, even if many of them, possibly a majority, want it to. This is a zero sum game…by voting SNP, the voters can’t lose.

Telling them that the latest figures show a new nation struggling, makes no difference because it’s irrelevant to an independence that isn’t going to happen (any time soon).

I fear something similar may apply to Devo Max. There is no doubt that on the face of it, reduced revenue would hurt a system built on retaining all taxes. But no matter how hard the Unionist bloc of Labour and Tories shout about it, I think their capacity to scare has evaporated. So many scare stories have been told, so many bogeymen have loomed out of the shadows that the trick has stopped working. That’s why Labour people who once felt obliged to tell others that they would vote Labour whatever their misgivings, are now openly SNP. The subtle community pressures through trades unions, organisations, council employers and the like have broken down and working class Scots now feel the freedom of voting they way they wish – and many are using it to give their verdict on those who have failed them.

Another frothing rant by Brian Wilson, a wheedling Murphy sound-bite and even, if they found it, the calmer analysis of Brian Ashcroft, just rebounds off the wall of resistance as if to say: You’ve had your chance. We listened for years and look where it got us.

I have one theme of my own when it comes to Scotland’s resources. It is this: Whatever state the accounts are in, it is the result of Union.

Our entire economy – for 300 years, remember – has been run by people elsewhere, people, who as we now know from Sir Nicholas Macpherson, twisted the rules to make the civil service a political arm of government against the Scots and against every rule of British government. In other words, these are people who will never – never – have Scotland’s best interests at heart.

Another glaring example is their campaign pleading with us to stay because they loved us – apparently – but now we are going further and actually voting to be part of the government, they treat us like immigrants from the sub continent. Britain took over India, ran it, exploited it, made Indians work for them through enslavement and violent threat and got rich off the back of the Indians. In return the Indians got passports but encountered discrimination and obstacles when they got to Britain. Oh, we didn’t expect you to actually come to live here…

If oil rich Scotland with world class universities and highly developed industries covering tourism, food and drink and life sciences, isn’t able to balance its books and have money in reserve – then whose fault is that, because it can’t be blamed on independence, can it?

I like this section from Business for Scotland.

The Barnett Formula will be lauded by unionists as it does mean that Scotland has more to spend in years where revenues drop. However, the key point is that in the years in which Scotland’s revenues have been far, far higher than the average for rest of the UK, the Barnet Formula has severely limited Scottish spending to an amount close to the UK’s.  Peer reviewed research by Business for Scotland has proven that had Scotland had been an independent country for the past 34 years (as the UK debt mountain grew) Scotland’s higher revenues would have meant that we would not have had to borrow a single penny. In fact Scotland would by now have a cash surplus of at least £50bn. All of the UK debt was generated outwith Scotland, and in the 2013/14 figures £3bn or 24% of Scotland’s deficit was driven by interest on that UK debt and the previous year £4.02bn or 33% of Scotland’s deficit was interest on debt. Let’s be clear, the Barnett Formula helps as part of the UK in some years, but has overall massively limited investment in Scotland’s economy.

And why do the people of limited vision never recognise that it is because Scotland lacks the levers to fully utilise its capacity to grow the economy that we are poorer than we should be? The economic model is not appropriate for Scotland – it is London’s creation and yet they are the ones telling us the conditions are wrong even for full fiscal autonomy.

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Let’s take them at their word then. If not full fiscal autonomy, then what? Where is their suggestion? Do they have an insight or is jeering and name-calling the extent of the Murphy Revolution? It appears so.

However, in stark contrast to Murphy’s vacuum, I discovered a report which looks at these issues, although written some years ago. It examines FFA and concludes that it is probably a better solution for Scotland to have a variant of full autonomy, one which is also conducive to harmony with the other nations by retaining an element of Barnett as a form of equalisation. In other words, whatever works…

The authors declare that Scotland should have a considerable proportion of taxes raised in Scotland returned directly to Scotland – income tax, VAT and corporation tax with a package of other taxes too. That’s already further than Smith on business taxes and Smith only assigns a proportion of VAT.

The report also dismisses the idea that a new system would immediately fall foul of the existing economic balance – the very case that Unionists are making today. They say: In embarking on a fiscal federalist system a needs assessment exercise would have to be conducted in order to tie down the size of any bloc grant provided by the centre. We also argue for some form of transition mechanism that minimises the amount of disruption in the system and maintains the level of revenue initially available to the Scottish Parliament at a time of significant change. We are also of the opinion that any legislation creating tax assignment for Scotland should allow scope for further modification of the Scottish fiscal system – much as on the lines of the Spanish system where regional finances under the law are reviewed every five years. For one thing fiscal federalism is currently evolving worldwide, and in several countries is being allowed to pass through several phases. For another thing, it is very hard to get it absolutely right first time – something that we believe the Scotland Act (1998) failed to achieve.

Hardly scary, is it…more measured and considerate, taking careful account of existing conditions rather than echoing the blowhard bluster of Murphy and crew about impending disaster.

So who wrote this thoughtful account of a clever way to deliver real economic powers within the UK without damaging Scotland? Well, its lead author is arch-Unionist and pound sterling adherent Professor Ronald MacDonald of Glasgow University with special mentions for help going to, among others, Wendy Alexander, Brian Ashcroft, Jo Armstrong, John McLaren and Arthur Midwinter. By my book, that’s a Labour pro-Union roster. They wrote this 10 years ago and it seems to me to be way beyond any thinking going on the Murphy’s Better Together staff room. In fact it looks to me like the basis of a discussion – between a Labour government and the SNP, perhaps?

 

 

 

 

 

 

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20 thoughts on “It’s the Stupid Economy

  1. Tory minister Anna Soubry is screeching about us having had our referendum and voting no, so she thinks we should sit back and take the Westminster medicine.

    She seems unable to differentiate between the referendum in Scotland and a UK general election. The referendum has changed nothing. Scots are still governed by the UK government. Yet our democratically elected MPs, sent to Westminster to represent their constituents, if they are SNP MPs look likely to be denied any access to having a say in government. Totally undemocratic – and I think we need to be shouting that loud and clear.

    Of course, what will actually happen come 6th May could be very different, though having created such a stooshie and raised hackles down south, Labour might find persuading the SNP group to play ball and support them in getting legislation passed might be rather difficult.

    If Scottish MPs are excluded, then Scots are disenfranchised and democracy in the UK has shattered like Humpty Dumpty – never to be put back together again in its previous form.

    • Katrine Paterson

      Disenfranchised? Nothing new there then. We Scots are ignored, until we stir them up. Then we are treated as undesirable ‘aliens.

  2. We need a truly independent assessment of our financial status. In 2013, Craig Murray posted about the appalling bias of the BBC and also the misleading GERS figures:
    “These figures are based on a geographical allocation of oil revenue – but that geographical allocation is based on New Labour’s incredible gerrymandered 1999 England/Scotland maritime border which gives eight major Scottish oil fields to England, including two North of Dundee.”
    https://archive.today/kw9KE

    With the Treasury manipulating the figures we can be sure that the worst possible case is being presented to the electorate. Macpherson stated in a House of Commons committee last year that he regarded it as his duty to save the British State and he clearly regards us as aliens , NOT a part of the state with democratic rights.

  3. I agree, it is a way forward and one which the establishment should have taken seriously in the early years of Holyrood. However they didn’t and right about now with Scotophobia running rampant in both Westminster and the press, I doubt that anyone will be listening to such proposals a while yet. Ms Soubry earlier today went on what could only be described as an utter rant on the Marr show. Even now we have this:

    http://wingsoverscotland.com/paddington-sequel-announced/

    as the latest Conservative wheeze for the English electorate. If you haven’t seen Ms Soubry’s spectacular outburst yet Derek, I’ve provided a link on Paisley Pattern thread. It really is a must see.

    All this is by the by. The real problem is the narrative sold during the referendum is now being reinforced and amplified during a general election. Scots are the barbarians at the door, the bogeymen, something to to be feared and/or shunned. They don’t want partners, they never did. They want their tame Scottish place people back. The ones who did their time, took their handouts, didn’t ask too many questions and got their skunk trimmed robe for their troubles.

    They are not going to get them and things won’t be returning to the way they were. What they fear most is going to come to pass by their own actions. It didn’t have to be this way and never should have been this way, but Westminster cannot help acting like Westminster.

  4. Steve Asaneilean

    As Macart says it’s just more of the same which was clearly so effective last time in closing the door, eradicating the desire for change, diminishing the strength of the SNP as a political force – aye right.

    Without fiscal autonomy in place how can anyone at Westminster say how well Scotland would or wouldn’t do? Likewise we need fiscal autonomy to hold Holyrood to account because with FFA there are no hiding places and no excuses.

    With FFA the Scottish Government is going to have to clearly define how much it’s going to spend on each public service and if there isn’t enough money to go round they are going to have to clearly identity how and where additional funds are going to come from.

    That’s true democracy.

  5. Just watched Malcolm Bruce on STV news at the LibDem conference, in total denial about the possible result of the GE. Cameras turned to the ‘spectators’. They all seemed to have their hands over their mouths – body language speak for believing you are being told a lie!

  6. The UK Union is sinking under the FPTP system which was designed to keep all the key players in Labour and the Conservatives (or which ever names the two party system gave themselves) on the Westminster gravy train via the ‘safe seat’ system.

    50+ SNP MPs does not just turn the longstanding ‘Buggins turn’ Wesminster gravy train on its head but it cracks the non existent unwritten UK constitution wide open creating the very situation Lord Cooper in McCormack vs the Lord Advocate (1953) considered was unlikely ever happen – a situation where a big enough group of non aligned Scottish MPs (non Labour / Tory / Libdem) would be able to represent the ‘considered will of the people of Scotland’ at Westminster. Lord Cooper suggested such a situation would create constitutional havoc but could not see how it would ever happen.

    I increasingly believe the rising tide of anti-Scottish boorishness from the British Establishment, its politicians and media is predicated on the reality that a SNP majority of MPs from Scotland threatens its current control, command and dominance of UK PLC.

  7. Unionists always frame their arguments and policies in terms of a centralised UK state which collects all revenues and then decides how much to give back to the “regions”.
    From a Scottish view point the only solution which works is collection of all revenues within Scotland and a negotiated contribution to shared services with the rUK.
    That is what FFA looks like within a UK state and not the continued dependency models proposed by unionists.
    Any proposed solution which leaves London in charge of collecting Scotland’s income will be just another fudge designed to leave Westminster firmly in control of our affairs.

  8. On a technical point, I note that FFA can’t happen because of EU rules which state that VAT must be collected centrally, not ‘regionally’.

    In that VAT raises a whack of a lot of money, that’s a major obstacle to fiscal autonomy.

    • I thought it related to not being able to have “regional” rates of VAT?
      Who cares how many collection offices there are so long as they are all collecting it at the same rate?

  9. FFA is not an option if the UK remains in charge of defence and foreign affairs. These have very significant financial implications,so unless Scotland is allowed to decide freely on these issues and whether or not to financially contribute on them it is not FFA.

    FFA is independence -which is uncomplicated and entirely logical.
    Anything else becomes more and more complicated and incoherent in the context of a unitary state

    We should be promoting a confederal Britain (which would sensibly include the republic of Ireland). That is a collection of independent countries FREELY deciding to co-operate and share on matters of mutual interest as is the case with the Nordic Union

    • So instead of the treasury sending a bill for defence/foreign office we use the current system. The MOD and Foreign Office submit their application for funds to the ‘Scottish’ treasury with the SG deciding how much they should get! (Not much I should think.)

  10. “Whatever state the accounts are in, it is the result of the Union.”

    A point so fundamental, it should be an SNP election slogan.

    Thanks, Derek.

  11. OT, but heartfelt comment from Spain: don’t believe them, Scotland!

    “We are also of the opinion that any legislation creating tax assignment for Scotland should allow scope for further modification of the Scottish fiscal system – much as on the lines of the Spanish system where regional finances under the law are reviewed every five years. ”

    There are some serious problems with this “model”. First, in Spain, the central government is unilaterally re-centralising, trying to beat the elections when they will lose their absolute majority – driving a cart and horses through another regional financial arrangement on a weekly basis, never mind every five years. This is the consequence of regions having “devolved” powers (i.e. subject to withdrawal at will). Would the Scots be wise to put their trust in such reviews?

    The latest supposedly mandatory review in Spain last year, for example, was unilaterally postponed by central government, not that it makes any difference: no region will allow any other to have any advantage. Any new arrangements proposed are soon smothered with amendments to return everything to square one. Sound familiar?

    Please, Derek and others, don’t take the hypothetical Spanish situation as a model for anything. In Spain there is a saying “Hecha la ley, hecha la trampa”, literally “every law has its loophole”, but which certainly these cynical days, the Spanish have learned to their cost means that the laws are not worth the paper they are written on. Smith, anyone?

  12. I see the PASLC report has found that Mr MacPherson and his civil service chums at Treasury did indeed cross the line during the referendum.

    Who knew?

    • I saw that as well Sam but just to make sure the Scottish Government had nothing to crow about, it found that the Scottish Government had crossed the line as well by using civil servants to prepare the white book,
      That cannot be correct as a sitting government has a right, nay a duty to inform the public of its intentions and is entitled to expect the public purse to pay for this.

      • An attempt to mitigate repercussions John.

        It was the duty of both government’s civil servants to inform impartially, but only one of those two offices stated that their intent to protect the ‘territorial integrity’ of the state came before their adherence to the spirit and rule of their remit.

        As Mr MacPherson himself so eloquently put it, ‘the clue lies in the name’.

  13. Just though I would mention that we had two pamphlets through the door last night, from so sort of Unionist group suggesting voting for which ever Unionist had the best chance of keeping out the BAD SNP. Seems they cannot read or lift their eyes up whilst scurrying around in the dark, We have an SNP poster in the window,

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