Tuesday 19 November
Grim times ahead, then…
We’ll be paying more if we vote Yes, says the Institute for Fiscal Studies. At an Edinburgh conference yesterday, it launched papers and presentations on the Fiscal Implications for an Independent Scotland. ‘Sober and impartial’ was Alistair Darling’s view of the IFS’s main findings - a £3billion black hole facing Scotland and “a significant cut in spending or increase in taxes, over and above that already announced by the UK government, in order to put their[Scottish] long-term public finances onto a sustainable footing. The scale of this fiscal tightening is likely to be greater than that required for the UK as a whole”. You can download the papers at www.ifs.org.uk.
Finance Secretary John Swinney, according to Scott McNab’s report in yesterday’s Scotsman, says “The IFS themselves admit their projections in this report are inherently uncertain and could evolve differently if Scotland were independent rather than part of the UK; in addition they could be substantially affected by the policies chosen by the government of an independent Scotland”.
But Business and Economy Editor Douglas Fraser , commenting on his BBC blog, thinks that the IFS projection of a big gap in Scottish finances is an awkward moment for the nationalists. The need to cut the deficit in the next decade, says Fraser, could result in “either a cut in spending on public services of 8% or a rise in taxes, which if all applied to VAT, would see it rise from 20 to 28%. Or you could put up income tax by 9%”.
Alex Massie in the Spectator says a bit of austerity in Scotland might not be a bad thing. With the options open to an independent Scotland, if the IFS predictions are right, he says “fiscal policy might begin to look a little like that urged upon George Osborne by his critics on the Tory right. There may be little immediate prospect of a Tory revival in Scotland but Scotland might nonetheless become a testing ground for right-wing economics. Not, admittedly, through choice, but for want of affordable options. At this point you may sound your irony klaxon”.
In today’s Scotsman, Peter Jones identifies the one tax that has risen by 60% in the eight years the SNP has been in power in Scotland. It isn’t one imposed by George Osborne, he says, it’s home-grown - “ non-domestic or business rates. It is the tax which is levied on businesses according to the value of the property their enterprise occupies. It is a Scottish tax, controlled by John Swinney, the Scottish finance secretary… this is the reason why a lot of businesses are highly suspicious, if not downright hostile, to independence. Now that the Institute of Fiscal Studies (IFS) has come out with a damning verdict about how difficult it will be to make the public sector books balance out, that suspicion will be re-doubled… to listen to the Scottish Government on the subject of business rates, you would think they were a tax-cutting government”.
Today too, the Scottish government publishes its own report, ahead of next week’s White Paper, on Scotland’s economy outwith the UK. Yesterday’s Herald preview said the paper “will state that if the Scottish economy had grown at the same rate as other small, independent nations between 1977 and the start of the recession in 2007, GDP per capita would be 3.8% higher than it is now - the equivalent of £900 per person” and “if Scotland had matched the UK's rate of economic growth over this period, GDP per capita would still have been 3% higher than it is now, the equivalent of about £720 per person”.
Welcome in the Valleys?
Coincidentally the magic £3billion figure crops up again at Wales Online as it reports the full details of the new tax-raising powers accorded to the Welsh Assembly by the coalition and unveiled by Clegg and Cameron in Cardiff at the beginning of this month. All but one of the Silk Commission’s recommendations – the devolution of Air Passenger Duty –have been agreed to. The full UK government paper Empowerment and Responsibility: devolving financial powers to Wales, is available here. There is, of course, the small matter of a referendum to decide if Wales actually wants these powers.
Writing in Click on Wales, Josh Miles, policy adviser to FSB Wales, said the proposals still fall short of business needs– “a quick calculation suggests that the taxation being assigned to the Welsh Government will amount to around 1.2 per cent of the Welsh Government’s £15bn plus budget. But that figure could have been considerably higher if we had seen the full devolution of Non domestic (business) rates, as recommended by Silk… business rates will be worth £952m in Wales this year– the sort of money that puts the importance to the Welsh economy of receipts from Stamp Duty Land Tax and Landfill Tax at around £165m into perspective”
Plan B? What Plan B?
The battle over our future currency also rumbles on. The head of the Scottish government’s strategy unit Colin McKay has admitted that post-independence currency union cannot be ‘guaranteed’ and will depend on negotiations. Alistair Carmichael’s midweek speech calling for the Yes campaign to have Plan B ready in case the UK decides we can’t keep the GBP was taken up by Johann Lamont at FMQs and the Scottish Affairs committee. In Friday’s Telegraph, Alan Cochrane argued that the First Minister makes a habit of skating on thin ice over the currency question, behaving as though sterling was his personal property, rather than something shared with the rest of the UK. In Saturday’s Herald, Ian Bell argued that the unionist camp will always demand Plan B – even Plan C – no matter what the SNP come up with.
Iain McWhirter in the Sunday Herald maintained that there is a case for Scotland to have its own currency; there are European models, notably the Czech Republic and Slovakia, he says, and it is ‘offensive’ to have Scotland portrayed as ‘begging’ at England’s door to keep the £ when neither George Osborne nor Alistair Darling have said we may not keep it - “everyone knows that England would not refuse to allow Scotland to use the pound… you will not find any economist, politician or serious commentator who has seriously suggested otherwise. The pound is anyway a joint creation by Scotland and England, as was the Bank of England which was, of course, founded by a Scot”.
Passport ma’am?
One of the more bizarre articles on the effect of a Yes Vote appeared in the Sunday Times, where Mark Macaskill (£) reported the belief of Christopher Lee, “who has commented on royal matters for the BBC”, that the Queen would have to cut back on her visits to Balmoral. Lee thinks that since Scotland would be the only Commonwealth country outside the UK to have a royal residence,” there would be greater political scrutiny of her visits to Scotland”. She would have to ask permission to come north of the border, he says, and every visit would be a state, not a private, occasion. Neither would the Prince of Wales be able to enjoy private use of the Castle of Mey. A Palace spokesman refused to comment. Quite.
The F Word.
No, not that one. This F is for Falkirk, where Unite’s Labour membership carousel is still turning merrily. How many more emails are there to be exposed? Just like Watergate (for those of you old enough to remember) the buck now appears to have left Scotland and be whizzing towards for the upper echelons of UK Labour. Eddie Barnes in Scotland on Sunday (whose excellent article doesn’t appear to be yet online) said that both Ed Miliband’s union adviser and the party’s General Secretary, Ian McNicol (Wednesday’s Times,£), were apparently totally au fait with what was going on in Falkirk, so it is almost inconceivable that the Labour leader was not also aware. Last Wednesday’s Guido Fawkes blog dredged up some of Mr McNicol’s history – he has form on this…
Meanwhile, Barnes also reported that UK Business Secretary Vince Cable has ordered an inquiry into ‘intimidation and bullying by rogue unions and employers’. It will, says Barnes,” be led by an independent panel and chaired by a senior QC outside government [and] will look specifically at disputes that centre on “critical industrial infrastructure” in the UK”.
This has not gone down well in Bute House. The thought that David Cameron will be able to make political capital out of Falkirk for months to come is ‘foolish and irresponsible’ says the First Minister.
“There are internal issues for the Labour Party to sort out … the way UK ministers have approached this issue suggests that their interest is less about industrial relations and almost entirely about seeking electoral advantage… Police Scotland is more than capable of administering the law. They act impartially and there must be no attempt to politicise their role. Indeed the Scottish Government will not allow that to happen.”
And yomping in where circumspect angels might fear to tread, the BBC’s Question Time is to come from Falkirk in two weeks’ time. Form an orderly queue for tickets and bullet-proof vests…
Money can’t buy you love…
but it can buy an awful lot of PR and posters. Yesterday’s news that millionaire Paul Sykes is to donate untold riches to UKIP’s 2014 European Parliamentary campaign comes as both a fillip to Farage and a blow to the Tories. Mr Sykes was interviewed by Philip Johnston in yesterday’s Telegraph; the paper’s editorial thinks the Tories are more worried about the effect Mr Sykes’ money will have on the 2015 general election rather than next year’s European vote.
Now UKIP has always had more than its fair share of mavericks – some well deserving of Cameron’s fruit-cake epithet – but the party in Scotland can ill afford to shoot itself in the foot when for the first time it stands a reasonable chance of securing one MEP north of the Border. In the Sunday Herald, Paul Hutcheon had a follow- up investigation to earlier reports that candidates were falling out. A selection process to choose six candidates from nine hopefuls, says Hutcheon, has prompted “an extraordinary bout of infighting and a civil war between the UK party and its Scottish branch”. Accusations that David Coburn, a ‘Friend of Farage’, had been parachuted into the selection have provoked en masse withdrawals from the race, especially after he admitted that he wants to become an MEP because it will help him get to Westminster and more TV and radio appearances. Note to Mr Coburn – talking of Scots ‘weaving shawls’ and ‘never venturing south of the Solway Firth’ will not help your cause.
Melding it together…
The idea of a federal UK is always with us. It seems an attractive solution to asymmetrical devolution even if the result might be the domination of England by virtue of size and population. Writing in yesterday’s Scotsman, former Tory MSP Brian Monteith, inspired by Welsh Conservative AM David Melding’s book The Reformed Union – the UK as a Federation, finds it odd that more thought is being given to the governance of the constituent parts of the UK than to the UK as a whole.
England has rejected the idea of internal regional assemblies, says Monteith, but an English Parliament could work - “The problem is that such local developments take time and so lax have English members of the British political establishment been in considering these issues that the rest of the UK may not be prepared to wait…”. And how would British politics work with an English First Minister and a UK Prime minister being based at Westminster? A move away from London for the former would, Monteith suggests, be vital.
Toronto has Ford, we have Flowers…
You don’t know whether to laugh or cry. If you have a Co-op Bank account, we suspect it may be the latter. In case you haven’t caught up with the saga of the hapless Rev. Paul Flowers, here’s the Daily Mail’s take on it. Mr Flowers was Chairman of the Co-operative Bank when it got into trouble earlier this year. In 2010 he was appointed a member of Labour’s influential finance and industry advisory board. He has been a Methodist minister for almost 40 years and served as a Labour councillor on Bradford City Council, where he lives, for a decade. Now this upright citizen has been caught buying crystal meth and crack cocaine, and admits to using ketamine and cannabis. Not unnaturally, Mr Plod is taking a close interest. Every organisation he was associated with has suspended and disowned him. How did he ever get to be chairman of a large ‘ethical’ bank? Well might you ask…
Off message but interesting…
1. Rob Roy, where art thou?
A bit of Scottish history and PR combined. Last week’s The List carried an articles on Crieff’s annual Drover’s Tryst – the commemoration of the time when drovers converged on the Perthshire town – “Every year, the town swelled with the arrival of tens of thousands of cattle, drovers, dealers and a host of others, from pedlars to gamblers, singers and jugglers, all plying their different trades. Noisy and riotous, but vital for the Perthshire economy, both the trysts and droving remained an annual feature of the local landscape until modern roads, steamships and railways meant that the English dealers could venture north to buy cattle direct, while the fatter, less hardy breeds of the 19th century could travel south in relative comfort”. Author John Cooke also covers the Wagyu cattle being bred on an estate near the M9; their meat is reportedly the finest - and most expensive – in the world. Those of you interested in Farmers' Markets and the rural economy can also delve into the many links alongside the article…
2. Island Clearances
While half of Scotland is crying out for wild land to be maintained, there is a small corner that wants anything but. According to David Ross in last Thursday’s Herald, Stòras Uibhist, the community landowner on South Uist, covering most of Benbecula and Eriskay as well, is protesting that an attempt by Scottish Natural Heritage to map much of South Uist as an ‘untouched wilderness’ will lead to further population decline and an inability to regenerate the local economy. Huw Francis, CEO of Storas Uibhist says, "Much of Scotland was once designated as land fit only for sheep, which resulted in the Clearances. If Scotland continues to be designated as fit for nothing but conservation, a new clearance of rural Scotland will take place." SNH says its public consultation will not lead to mapped designation, only to identify where there is extensive wild land. Mr Francis clearly believes in getting his retaliation in first…
And finally
Bah, humbug even…
Still with rural life, a timely reminder that we’ll soon be caroling and wassailing comes from Kate Mansey in the Sunday Times (£) lamenting the escalating cost of our turkey. And not just the bird (up 13%) but the roasties (30%), the pudding (125%), the cranberry sauce (17%), the sprouts (13%) and the gravy granules (go on, admit you use them - up 17%). It won’t soften the blow, but apparently the fault lies with “a volatile international wheat market and the rising cost of animal feed.” We’re now importing turkeys from Italy and Poland, breeding half the number we did two decades ago. Paul Kelly of the British Turkey Federation says we’ll be paying an average £53 (no, that’s not a misprint) for a 4kg bird. And if that gives you indigestion, you can take comfort that your Alka-Seltzer will cost you 2% less.
If you’re still looking forward to Christmas after that, we do hope you haven’t ordered too much online. Our union leader du jour, Mr McCluskey, has turned into Santa and called his UPS members in the firm’s Camden depot - its largest - out on strike at the end of the month, should this week’s negotiations fail. Unite’s website says “The drivers and loaders are protesting about excessive workloads, forced overtime and bullying. The dispute has now escalated following the suspension of a Unite shop steward after the notice of ballot was issued to the employer”. Couldn’t happen here, could it. Oh wait, it already has…
