Go Lassie Go

Time for some academic transparency?

Profs were once unworldly, but that was long ago

The Centre for Public Policy for the Regions gets a lot of attention in the Scottish media. Its tousle haired economist John McLaren is almost as familiar to viewers of Newsnight Scotland as Gordon Brewer himself. This weekend its report on the Scottish government's spending priorities in the budget got considerable attention.

The report suggested that the SNP was wrong to ring-fence health spending - just after the party launched its 2011 camapign with this very pledge. It also cast doubt on the SNP government's ability to fund big infrastructural projects using the non-profit mechanism they have created to replace PFI/PPP. This also echoed the attacks of the Conservatives, Labour and Liberal Democrats.

So is this report a dispassionate piece of analysis by lofty academics who are above the dirty business of politics? Or should we should look again at the CPPR and ask how non-aligned some of its people really are. John McLaren, for example, was once an adviser to the Labour First Minister Donald Dewar - not something that is flagged up on television.

But it is the background of Jo Armstrong, McLaren's co-author of the weekend paper on Scottish public spending, that concerns me much more. Ms Armstrong was an adviser to another Labour First Minister, Jack McConnell. She is also a controversial figure with what many believe are strong ideological views in favour of liberalising public services. She has advocated the privatisation of Scottish Water. She has associations with those who have most to gain from a return to PFI/PPP - the cost of which has multiplied and delivered huge profits to banks and business consultants. She was involved in the establishment of the Glasgow Housing Association, an  organisation backed by the banks, who were given the city's entire housing stock but had the debt for that stock completely written off.

 I am indebted to an online directory called Powerbase, which attempts to chart the connections between lobbying/academia/consultancy/think tankery and politics.

Here is part of their fascinating entry on Jo Armstrong:

"Jo Armstrong has also involved herself in other areas of concern to the Scottish people. For instance the area of Public Private Partnerships (PPP'S) is one that she has written on. She appears to be a proponent of PPP despite evidence that they are a bad deal for the people of Scotland see refs below ^{[15] [16] [17] [18] [19]}.

She herself says that she has had,

'Key roles:

• advising on the development of partnerships and projects
• ensuring financial viability & acceptability to the private sector
• assuring value for money & public sector affordability'.

This advice has been given to both the Scottish Executive and the Royal Bank of Scotland; one of the main beneficiaries of PPP's. Her relationship with the Royal Bank of Scotland encompassed,

'The provision of analysis and advice in support of the Royal Bank of Scotland’s Structured Finance deals covering

• PFI/PPPs for UK hospitals, roads, prisons and housing
• gas and coal-fired power projects worldwide
• oil, mineral and petrochemical installations world-wide
• leisure and hotel projects in the US and the UK' ^[20].

Despite this business relationship with the Royal Bank she also took on an, 'an initial review of the Scottish Executive’s experience of, and role in Public Private Partnerships (PPPs) in Scotland reporting to the Scottish Cabinet through the Minister for Finance' ^[21]. "

Jo Armstrong, has also worked for the Fraser of Allander Institute, another academic organisation that appears to employ a disproportionate number of folk of a Scottish Labour persuasion...Now I am not saying that Ms Armstrong has done anything wrong. But I do believe that anyone presented with her work has a right to view it in the wider context of her career.

There is considerable personnel cross over between the Fraser of Allander, the CPPR, and the Calman Commission on Scottish Devolution which was set up by the unionist parties to block moves to give Scotland more control of her own resources and economic decision making. The Calman Commission report forms the basis of the Scotland Bill, currently going through Westminster which the Scottish Government says would have resulted in Scotland losing £8bn in the first ten years of devolution.

For Example:

Jim Gallagher, the former civil servant who is believed to have written the Calman report and who has been appointed as expert adviser to the Holyrood Scotland Bill Committe is listed as an associate with the CPPR.

Wendy Alexander, who had the idea for the Calman Commission while Labour's leader in Holyrood and who now chairs The Scotland Bill committee has worked for the Fraser of Allander. As a minister in a previous Labour administration she pushed through the establishment  Glasgow Housing Association that Jo Armstrong worked on too

Brian Ashcroft, Wendy Alexander's husband, is a member of the CPPR and Fraser of Allander.

Julia Darby and Peter McGregor of the CPPR were two of six economists who signed a letter in The Scotsman yesterday claiming fiscal autonomy would not help the Scottish economy.

Julia Darby was also on the Calman expert group.

Of other letter signers Anton Muscatelli, Clemens Fuest and David Ulph were also members of the hand-picked expert group.

David Ulph is also an expert adviser to the Scotland Bill committee at Holyrood. Does he not believe that a conflict of interest might arise? How can he offer supposedly impartial advice on Scotland's fiscal future when his colours are nailed so firmly to the mast? A look at Ulph's CV also reveals that he was employed by HMRC until 2006. The Treasury and HMRC are among the strongest opponents of any move that decentralises power away from them.

I am sure there are many other academics whose impartiality is not perhaps as straightforward as is presented to the wider public. I am not saying that academics should not have political views - that would clearly be absurd. But we should at least know their background and their associates when listening to their contributions. (Just as we should know the backgrounds of journalists - I recently became an SNP candidate).  So Professors Andrew Hughes Hallett and Drew Scott were recently attacked by Wendy Alexander's committee because their research had been used by the SNP government to support the case for fiscal power. Contrast the way they were treated with this report in The Telegraph on evidence given at the same time by Iain McLean, of Oxford University, to the same committee. Professor McLean, another member of the Calman expert group, is not an economist but was allowed to talk at length on how the SNP's plans (not part of the committee's remit) would "substantially increase the risk of a financial black hole appearing". For good measure he defended the Scotland Bill plans not to include corporation tax and national insurance and dismissed oil revenues as "too volatile."

Nowhere in the report does it explain that Professor McLean is a very good friend to Labour and was a councillor in Oxford and Tyneside. (Though Professor McLean is himself open about this on his CV) Nor does any report on Prof McLean's evidence to the committee explain that Jim Gallagher (its expert adviser remember) has recently joined Prof McLean at Nuffield College.  I'm a told Gallagher found a welcome there after leaving the civil service shortly after the change of government last May.

Lastly, looking at the CVs of the economists on the CPPR, it is clear that "regional economics" is a bulging academic area. Many have moved from the regions of England, where they have developed their expertise. I don't think of Scotland as a region...but perhaps it suits others very well for it to be treated as such.

 

 

 

 

 

 

 

Just a few examples:

Jim

NOTE: In the interests of transparency, I am an SNP candidate for the South of Scotland. But you probably knew that already. I also write for The Scotsman. My column will appear on Tuesday from now on. Tomorrow it looks some more at the economic choices on offer to Scotland and in particular how to fund capital spending.

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Shamed by Calum Cashley's detective work

Fellow blogger and councillor Calum Cashley has put me and other professional journalists to shame. Following on from the row about the New Year Message from Iain McMillan of CBI in Scotland, Calum has taken a very close look at the organisation. You will remember that McMillan mounted a highly partisan attack on the SNP government which many feel was more reflective of his own political views than the businesses he claims to speak for. Calum has done a power of work by scutinising the CBI in Scotland. How many Scottish businesses does it represent? Who are they? You might be surprised to find it is a tiny per centage of indigenous companies and members include quangoes paid for with public funds. He lists all the Scottish members he can find. Wouldn't it be interesting if someone followed up on his hard work and asked these companies if McMillan's New Year Message was a fair reflection of their views? Lots more detail in Calum's blog here

Kevin the Teenager can never lead Scotland

Oh dear. Kevin the Teenager (aged 53 and a half) is over excited again. Iain Gray, according to an interview in Scotland on Sunday,thinks  he can win a personality contest with The First Minister Alex Salmond. Mmm, I guess it depends on what takes your fancy. If leaden delivery of scripted speeches is your bag, then I guess the Labour leader wins hands down. If a total lack of any ambition for your country gets you going, then look no further than the man who has nothing: no policies, no solutions, no positives.  The worst Gray seems able to throw at Salmond in the interview is an ill-advised photo-opp in a sun hat at the Commonwealth Games in India this year. Someone should tell him gently that, even in silly hats, Salmond is a more serious politician than he can ever hope to be. Indeed this is proved by the newspaper itself. While Gray splutters desperately about sunhats, elsewhere in Scotland on Sunday the SNP First Minister has written a column outlining his vision for Scotland's renewables industry and how it might take our economy to another level (100% of our energy from renewables by 2025)

My first and lasting impression of Iain Gray was when he spoke at a Fabian Society conference I attended several years ago. He opened his comments on the financial sector by saying he knew nothing about economics. Salmond is an economist by profession. This contrast wouldn't matter if Gray's lack of experience on such matters was compensated by charm, vision and ideas. Gray has none of these. He has risen without trace, assuming the leadership of the Scottish Party not because he was an inspiring figure, but because he was close to Gordon Brown and nobody else seemed up to much. So what if Salmond has a guid conceit of himself?  Isn't that what you want in a leader? Who would you rather have represent your country? Someone clever and forceful who  answered only to the people of Scotland, or someone lacking in knowledge, confidence and fluency who needed to check everything with his bosses in London?

Gray's interview in Scotland on Sunday today berates the SNP government on the spurious grounds that they should have created more construction jobs during the worst recession for generations. Bad timing, given that Scotland's unemployment figures are better than the UK as a whole and the SNP just announced the funding for a new Forth Crossing. Wasn't it the SNP who postponed Tory cuts and brought forward capital spending in order to stimulate construction in the Scottish economy? And wasn't it the case  that Labour in Holyrood was less than enthusiastic about this approach and at one point appeared to suggest that we should front load the cuts to "get them out of the way",so to speak? Might it not be the case that the SNP's determination to stimulate the economy is the reason for those encouraging employment figures? The last Labour government in Westminster also opposed giving the Scottish parliament workable borrowing powers to finance major construction projects.

If the Labour Party really care about creating jobs in Scotland, why are they so keen on a Tory Scotland Bill which gives us no powers to grow the economy and actually reduces the income of future Scottish governments, including any Gray aspires to lead? Then again, Gray knows little of economics. Like many frustrated teenagers, he is more comfortable with self-delusion. And like any adolescent who is defeated by cool reasoning, he is liable to erupt into petulant displays of rage for no good reason.

Stevenson's departure offers opportunity for women

It's better for the government that Stewart Stevenson has resigned, even if a lot of people out there - including me - thought it ridiculous to blame one man for the weather. The resignation letter said he had gone because of the failure to communicate with motorists, but we all know he's really gone because of his failure to communicate on Newsnight. As Iain MacWhirter said this morning on Newsweek Scotland, Stevenson just wasn't an "I feel your pain" sort of person. You can read his resignation letter and First Minister's acceptance here

The opposition will crow about getting a scalp - but may live to regret that. The resignation offers Alex Salmond the opportunity to replace an older, unmedia-friendly man with a bright young woman. Two candidates come to mind. Shirley-Anne Somerville and Angela Constance.

Somerville, who I believe is a new mother, is a politics and economics graduate who has worked in media relations for various organisations including the Royal College of Nursing. She's a member of Holyrood's Transport, Infrastructure and Climate Change Committee and co-convenor of the cross party group on climate change, both of which fall into Stevenson's brief. (She has already commented on the resignation here) And she has done a great job of exposing the debacle of the Edinburgh trams. I cannot imagine her being caught out on Newsnight, where she is already a regular and confident performer. She is a member of Friends of the Earth and could get on swimmingly with the small Green Group in parliament, who, according to TwoDoctors, didn't find Stevenson particularly chummy.  Somerville also has an interest in gender issues such as domestic violence and equal opportunities, which will help in terms of the female vote. 

 Angela Constance is also a young mother who worked as a social worker in the state hospital of Carstairs before entering politics. A Livingston councillor before she was elected to Holyrood in 2007, she has less parliamentary experience than Somerville but is highly regarded. She is a member of the Standards, Procedures and Public Appointments Committee and lists her hobbies as jogging and running marathons. Either woman would be a breath of fresh air and give the team a better gender balance.  One of the SNP's trump cards over the Labour opposition is the high quality of its front bench, something acknowledged by media commentators.  Stevenson's difficulties offered the opposition an opportunity to undermine this widely held view. Now he's gone and a weak link has disappeared with him.  What doesn't kill you makes you stronger. 

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Moore's St Andrew's Day disappointment

I though Gordon Brewer, Ken Macdonald and the Newsnight Scotland team did an excellent job of exposing the flaws of Calman, oops, The Scotland Bill, tonight. The First Minister was given time to explain his concerns in a robust but respectful interview. Robert Brown MSP, David Mundell MP and Pauline McNeill MSP, made less than convincing attempts to talk up  "The greatest transfer of fiscal power etc etc". Shame that this "mission to explain" was absent from the rest of the day's broadcast news. Reporting Scotland in particular is knuckle dragging in its approach to any form of policy, even developments it describes as historic. Is there a bar on intelligent discussion before 11pm?

It was good to see Ken Macdonald's report illustrated with a pie chart of all the taxes at the disposal of the UK Treasury, something that I also used to inform my Scotsman column on the matter today. (The illustration from below is from 2008). Some people will swallow the line that "tax powers" equals "income tax" because that's what they see on their payslip. In fact income tax is a small proportion of the revenue which Scotland raises and sends south.

We should control all our own revenue then hand a cheque to London for joint services the way the Basques operate. Until such times as the Scottish people see sense and vote for independence that is. I noticed that when McNeill and Mundell were stumped by Brewer's question along the lines of "where is the incentive for the Scottish government to raise money if any revenue from economic growth goes straight to London?" they both conceded that improvements could be considered during the process of "scrutiny". I wonder...the control freaks in Whitehall who drew up this bill are determined to keep a tight hold of the UK's centralised state power.

Another point that really ought to be challenged with rigour is the suggestion that a separate Scottish tax collection system would make things more complicated - a point made by Brown and Mundell. Firstly, the duplication currently proposed for income tax by Moore is complicated just to explain to a tv audience, never mind actually levy. Second, the current HMRC system is unfit for purpose and has over-charged and under-charged thousands of people. Third, Scotland could create a simpler, cheaper and more streamlined Tax Agency of its own. This could cut red tape for businesses and individuals, and end anomalies such as the crazy National Insurance. NI no longer bears any relationship to insurance and, as the Centre for Public Policy Research recently pointed out, is just a way of taxing citizens by the back door. 

 Here's the link to my column tomorrow in The Scotsman. The paper's editorial line is sceptical of the limitations of Moore's bill with a leader titled "New powers over income tax do not go far enough 

I will blog later on the bill's failure to tackle the scandal of the Crown Estate revenues.

 

Honest John v the toadies

The Scottish parliament debate on the Tartan Tax was dispiriting to watch. Far from seeking clarification in the interests of the people they serve, the opposition parties all indulged in point scoring about an issue they didn't actually care about. Far from "allowing the Scottish tax powers to lapse", it seems that the SNP in 2007 inherited a system which was inoperable, at least according to what HMRC told them at the time. I think the word used was "mothballed". But rather than address this rather important new fact, the opposition ploughed on with pre-prepared spontaneous hysteria.

It is pretty obvious from John Swinney's statement that there was a long and protracted row between his officials and those at HMRC over the latter's demands that the Scottish government should pay for a portion of the upgrade of the tax authority's IT systems. The convention normally is that when a Whitehall department makes a change that affects devolved administrations, it is the Whitehall department who pays for it. There are important issues here. To concede to HMRC demands would have set a dangerous precedent. For example can HMRC think-of-a-number any time they like in relation to Scotland? What will they charge to implement Calman, which is based on income tax collected in Scotland (not, of course the important stuff like corporation tax, whisky and oil revenue). So the London Treasury continues to rob us blind and then charge us whatever they like.  If Scotland moved to full economic powers with taxes still collected by HMRC, would they hold us over a barrel again? The Revenue is clunky, confused and tangled - and  will fight to control every twisted tentacle of its operation.

Perhaps the opposition parties believe you do business by gifting your opponent a gun to hold to your head. After all, that's how Labour and Liberal Democrat gave us a parliament building which over-ran its original cost by several hundred million. The contract was open ended. Same goes for the Edinburgh trams, another Labour/ Lib Dem pet project. Nor did Labour, Liberal Democrat and Tory have any problem handing public contracts to PFI consortiums who will charge us from here to eternity for schools and hospitals. Good Housekeeping is not their strong point.

The other completely duplicitous aspect of opposition argument today was the accusation that Swinney had somehow conspired to strip the parliament of its miniscule tax power and then stage a cover-up. What on earth would the nationalists have to gain from this? What could their motive possibly be? As the opposition well know there was no ulterior motive. Going public would have been a winner for the SNP politically. But Swinney is not in the business of picking fights and breaching confidential negotiations for political gain. Even when the row culminated in a £7m demand by London this year, Swinney felt it would have been discourteous to speak out on the disagreement, clearly hoping it could be resolved. This says a lot about the man and how he operates. He earned the nickname Honest John for a reason. It's something his opponents today could learn from. Calling him a liar is totally unacceptable and will be seen as such. Swinney's budget statement contained a formal phrase about the SVR. So did the budget statements of Gordon Brown, Alastair Darling and the Comprehensive Spending Review of George Osborne. All mentioned the tartan tax as an option. If Swinney was "lying" so were they, as they too knew about the HMRC position. They were all telling the truth because the tax power still exists, it has not lapsed. London is refusing us the machinery to exercise that power (if we wanted, which we don't).

The Scottish Secretary Michael Moore proved himself a far less honourable man than Swinney when he delibrately triggered this row with his "open letter". Ostensibly, his job is to represent Scotland in Westminster - something he has done singularly badly as he is about to present a Scotland Bill that will cut our budget by another £900m a year. But this pretendy part of the job is a figleaf anyway. Moore's raison d'etre is to undermine the Scottish government at every turn, no matter the level of duplicity involved. Moore is trying to distract attention from the cost and flaws of Calman. On several occasions Tavish Scott has tried to spin tartan tax row into an attack on fiscal autonomy eg "the SNP, which bangs on about giving more powers to this parliament, give away the one it already has etc etc..." Given that fiscal autonomy is about taking full control of the economic levers in a way that benefits the people of Scotland, there is no comparison. The tartan tax is so small, that some estimate the cost of implementing it would cancel out any money it raised.

This week the Liberal Democrats had an even more pressing embarrassment than Calman to cope with - the student demonstrations against tuition fees in England. Tavish Scott fulminated away about SVR as students in London were prevented by massed police lines from demonstrating outside the Liberal Democrat head quarters. (Didn't hear much LibDem talk of civil liberties then, eh?)

This was one occasion to be pleased that the BBC national news led with an England-only issue. Nick Clegg's hypocrisy was the big UK story of the day. They even demonstrated on his home turf of Sheffield where at the General Election, students had queued outside polling stations for hours to back him. Then came Reporting Scotland whose viewers must have wondered what on earth was going on in their own parliament. All this sound and fury about nothing more significant than an obsolete,  tax...which Labour and The Tories never wanted the Scots to have in the first place.

Any viewer who persevered may have been more struck by Swinney's edited highlight - he didn't want to hand £7m of Scotland's money to HMRC, an organisation whose incompetence had lead to tens of thousands of people paying the wrong amounts of tax. Sounds reasonable to me...and millions of others I imagine.  

For a detailed narrative on how the tartan tax story has been distorted day-to-day please go to Moridura 

 Alan Trench at Devolution Matters has just filed an excellent explanation about how The Treasury deals with devolved governments  inadequately. Trench is an academic and politically non aligned. He is incredibly knowledgable about the detail of how government works and this piece is invaluable.

 

Let's stop being so smug about Ireland

There's something unedifying in the way British commentators appear to be enjoying the Irish crisis. Jon Snow tonight repeatedly demanded to know if Dick Roche, Ireland's minister of European Affairs felt "ashamed". Snow neither knew nor cared why Ireland was in a mess or whether the politician he was interviewing was responsible. He had not read the analysis that Roche referred him to in The Independent that said the immediate crisis was triggered by investors withdrawing from Ireland when Germany's Mrs Merkel had a pop at the weaker economies of Europe.  

Nor did Snow listen when told that the Dublin government had done "everything that was asked of it". This is the more prescient point, surely. The Irish government embarked on a programme of extreme austerity measures some time ago that weakened the economy and made it more difficult to meet guarantees to the banks. The Irish were widely praised for their tough approach. which resulted one in 20 people defaulting on their mortgages, making the debt crisis even worse.  No sense of that from Mr Snow. No sense either, that the UK is snapping at the heels of Europe's so-called economic "basket cases" - see table above.

It's time UK politicians and broadcasters stopped being so smug about Ireland. The crisis was caused by poor market regulation, reckless lending on property, and prostration before the markets - which characterise the UK's experience too. Tax-payers in the UK and Ireland are being asked to compensate the bankers for all their losses - with no guarantee that sovereign bankruptcy can be avoided.  We are not "bailing out the Irish" as was suggested tonight on BBC Question Time. We are shoring up the debts of our own irresponsible financial institutions - again.

When David Cameron says Britain would "do it's bit to help" he's not so much being the kindly neighbour as watching his own back.  UK exposure to Irish banks tops £100bn, much of which went of dodgy property speculation. 

Another reason to avoid smugness is that the UK is now following the same disastrous economic policies as got Dublin into this mess. The big difference is that Ireland, as part of the Eurozone, cannot indulge in the Quantitative Easing used to inflate the UK economy and devalue sterling. That will bring its own problems as analyst Nadeem Walayat explains here. The table of countries most at risk of bankruptcy ought to wipe those smirks off the faces of UK pundits. It goes without saying that Scotland has little to gain from being part of this busted flush. The last government statistics showed us to be in surplus even after the UK banking bail-out was taken into account. Far from offering us protection, oil rich Scotland could find itself sinking with the UK ship. Have a look at the maps below which show the UK national debt as a proportion of GDP (UK worse than Ireland) and the government deficit at a proportion of GDP (UK just behind Ireland and ahead of Portugal).

 

 

 

Click on a heading to sort by that measure

 

	Total debt (% GDP)	Total debt (€ m)	2009 deficit (% GDP)
Italy	115.8	1,760,765	5.3
Greece	115.1	273,407	13.6
Belgium	96.7	326,606	6.0
France	77.6	1,489,025	7.5
Portugal	76.8	125,910	9.4
Germany	73.2	1,762,211	3.3
Malta	69.1	3,948	3.8
UK	68.1	1,067,819	11.5
Austria	66.5	184,105	3.4
Ireland	64	104,667	14.3
Netherlands	60.9	347,021	5.3
Cyprus	56.2	9,527	6.1
Spain	53.2	559,650	11.2
Finland	44	75,217	2.2
Slovenia	35.9	12,519	5.5
Slovakia	35.7	22,585	6.8
Luxembourg	14.5	5,464	0.7

 

SOURCE: Eurostat. All figures for 2009

 

 

 

 

Budget for a better nation

I have a piece in The Guardian today responding to the Scottish budget statement by John Swinney. It was originally commissioned as a post for Comment is Free, but they then promoted it to the main paper. Bear in mind it is written for a readership unfamiliar with the nuts and bolts of devolved politics...but I was pleased that Libby Brooks, the paper's deputy comment editor, tweeted it as Scotland showing what a progressive budget could look like.

There is a more detailed look at the budget, explaining the agreement Swinney has reached with local authorities, at Newsnet Scotland. It also usefully details some percentage cuts across various departments. On a related topic, Peter Curran at Moridura looks at how the budget was explained on television and asks pertinent questions about interviewing techniques. 

John Swinney's assertion that Scotland must get full fiscal powers was the most important part of his statement for me. The finance secretary made a good a fist of what he got, but we're worth more than that. Anyway here is the McAlpine Budget, as outlined in a Scotsman column published on Wednesday morning before the speech to parliament. I think Mr Swinney's job is safe, but the point is to illustrate how flexible and creative we could be with real economic power. Let's face it, Britain is bankrupt. What do we have to lose? It would be great if others could suggest alternative budgets of their own for an independent Scotland. Five policies that would make things better.
 

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By Joan McAlpine

There’s little point in a pocket money parliament when the pocket money runs out.  That line got resounding cheers for Alex Salmond at the SNP conference. But for John Swinney, who must today eke out the sweeties from that reduced allowance, those words must be as bittersweet as a bag of soor plooms.

The cabinet secretary for finance is a meticulous man, and we have already had some hints as to how he will manage the hand-out from Big Daddy down south. Further speculation is pointless, as you will know the details some time today.

If Scotland is treated as a child under the current arrangements, it’s more like the successful teen star whose earnings are appropriated by controlling parents “for the good of the family”. The Government Expenditure and Revenues Statistics showed national income from Scottish sources in 2008-9 (the latest figures available) exceeded all state spending here by £1.3bn. That is a budget surplus of  0.9% of GDP (including contributions to bailing out the banks.

In order to cover up their embarrassment, the most recent unionist tack focuses on Scotland being profligate under devolution. We are Britney Speirs or Michael Jackson, too flaky to manage our own considerable wealth.  It’s an absurd analogy designed to mask exploitation – and besides, John Swinney is no Britney Spiers.

In a Scotland with economic powers – independence or full fiscal responsibility – Swinney’s budget would look completely different. It’s an interesting exercise to imagine how a Scottish Chancellor of the Exchequer might operate in the grown up world.

My list is entirely personal, I couldn’t second guess Mr Swinney. However you have to start with those oil revenues, which give a Scottish chancellor more money to play with. They account for a fifth of all UK corporation tax - £6.4 billion in 2009 according to the industry body UK Oil and Gas. This only covers production, the supply chain is estimated to raise another £5-6 billion. 

The Scottish government’s stated intention is to build up an oil fund like that of Norway, which has reached $518 billion. But we could immediately use oil revenue to move our economy away from the distorted UK model built on City of London speculation, property and services. We must develop renewables, skilled manufacturing, engineering, life sciences and digital industries. We need to encourage entreprenuership, and create a friendly environment for the small and medium sized enterprises that account for most private sector employment.

Diverting some oil revenue towards building an infrastructure for renewables would be an important first step – no hanging around for the UK Green Investment Bank. We wouldn’t have the problem of Scotland’s share of the fossil fuel levy being chopped off our block grant.  Indeed we could design a completely different model of transferring cash from carbon fuels to green energy.

Given Scotland’s ambitious targets for renewable electricity generation, it’s not unreasonable that an Edinburgh chancellor would feel able to reduce the cost of petrol at the pump. We have some of the highest prices in the world. It affects all business, not just in rural areas. So let’s use fuel duty, vehicle excise duty and air passenger duty to address any logistical problems we face because of geography.

Specific industries could benefit from a chancellor whose first loyalty is to Scotland. Take the digital industries – everything from mobile phone apps to computer games. Digital Inspirations, a report for Scottish Enterprise 18 months ago, found the sector employed 42,000 in Scotland and generated £3.16 bill. It predicted this could double by 2012 with the right support. Scotland is strong on creativity, but weaker on building commercial value. Digital Inspirations suggested tax breaks or the creation of an industry hub in Dundee. The coalition government in Westminster refused tax breaks and announced a gamers’ hub in London. That’s the sort of thing a Scottish chancellor could fix.

Of course all industries depend on digital infrastructure. The Royal Society of Edinburgh recently pointed out that Scotland was falling behind in high speed broadband – an area that is reserved to London. Westminster shows little inclination to act, other than offering a limited pilot scheme in The Highlands.  The RSE urged the Scottish government to fill the gap but admitted the £100m cost could not be met by the block grant. A Scottish chancellor with priorities closer to home, would not struggle to find the funds to upgrade broadband. What about a text tax to pay for it?  It would please the parents of teenagers. This might sound like a flippant suggestion, and it is. But the substantive point is, that with imagination and flexibility, any government can use the tax system to transfer money to where it will bring most benefit.

A Scotland in surplus could improve all infrastructure more easily if it had access to that surplus. Full fiscal autonomy would also give us the ability to borrow to invest – but not the crazy forfeiting of our future to the banks, which was the model of the Public Finance Initiative. We might choose to emulate the Catalans, who recently issued a government bond worth 1000 euro and offering an interest rate of  4.75%. Ordinary citizens snapped up 1000 million euros worth in the first week of sale.

It’s not just other governments that a Holyrood  chancellor might look to for ideas. The Scottish Green Party turned to the land reform campaigner Andy Wightman to develop an alternative to council tax and business rates. Wightman’s proposal, the Land Value Tax, proposes an annual valuation on unimproved land so property owners would not be penalised for improving their home. The idea is to redistribute the 80-90% gains enjoyed by property speculators - and stop the kind of craziness that cause the crash. It’s untried and new, but an example of the kind of imaginative proposal we could consider. One recent report said LVT could subsidise affordable housing.

The need for minimum alcohol prices would no longer exist with a Scottish exchequer  – we could raise the price of drink through duty without waiting for the UK. We could emulate the Danish experiment in taxing junk food at higher rates, then invest the revenue in free nutritious school meals. It would save the NHS by reducing illnesses such as diabetes.

Myriad options come with full economic power. These are just a few. Others might have better ideas. The important thing is that they are tailored to Scotland’s needs. It beats squabbling over the bag of sweeties. 

 

 

 

Finland, the WHO and alcohol: Solid evidence that price DOES matter

In 2004, Finland lifted the prohibition on people bringing cheap alcohol into the country. The results were disastrous and consumption rose by 10%, along with alcohol related illness.

Labour and the other unionist parties are totally disingenuous when they say minumum pricing is untried and untested. Price does matter, as Finland shows. Yes, it would be better if the money went to the state instead of the supermarket. But the UK government refuse to act. Why, then, do these parties oppose calls to give Scotland control over duty on alcohol and other taxes? Might it be because Scotch whisky alone provides £1.6bn a year to the UK exchequer? 

Kaye Adams was taken aback when Labour's Doctor Richard Simpson, a guest on her show, lamely responded that his only solution to the problem was to bat it back to the UK government - without even trying a Scottish approach. Some people think he was given too much time by the BBC. Personally, I think he was given enough time to hang himself. Listen again to Call Kaye here. Dr Simpson thinks most of the pensioners in the country are addicted to cheap vodka....he must hope Scotland is too inebriated to notice his inconsistency and opportunisim.

Incidently, the SNP proposal did not come out of thin air. It was based on research by the World Health Organisation . The WHO studied policies aimed at reducing alcohol consumption around the world. It concluded that the most effective methods to reduce consumption were 1. Target at risk groups. 2. Control price. 3 Reduce access.

WHO said woolly approaches such as "improve education" were least effective.

The SNP followed WHO advice by addressing the three different points in these ways 1. Ban under 21s from off sales (eg target as risk groups). 2. Set a minimum unit price. 3. Introduce separate tills for alcohol at supermarkets. 

1 and 3 were killed off quickly and 2 was stopped yesterday.

There was a time when the Scottish divisions of London parties included a few folk who sincerely believed they were defending their country inside the UK. They were misguided but genuine. A few devolutionists were motivated by a sense of public service. Now, the plates have shifted. Nobody who watched yesterday's debate could believe those old time, pro-Scotland unionists still exist. The whole debate was an exercise in cynicism.  

See early articles in the Sunday Times and here

 

 

 

 

 

Want to find out more about blogging, social media and campaigns?

The non-aligned Northern Irish blog Slugger O'Toole is inviting Scottish bloggers, political activists and ‘hacktivists’ to a conference on social media and politics at Edinburgh University’s ‘School of Informatics’ on Saturday 13^th November – 10-4pm. It is for all political persuasions and none, and the organisers are particularly keen to get people along who want to find out more about social media and campaigning.

The impact that Twitter, Facebook, and blogs will have on Scottish politics will be explored in a series of workshops. And best of all it's FREE to attend thanks to the backing of NESTA and Channel Four.

 Slugger is organising the event in association with Left Foot Forward, Lib Dem Voice and  The Daily Telegraph. It's designed to help politicians and social media experts understand how politics is likely to change in the face of new media developments.

Organiser Paul Evans of Slugger O’Toole said:

“This event is for anyone who has ever asked themselves “why is politics still done like this?” No matter what your allegiance is, there are lots of innovations that we can all welcome and support that could restore trust in politics and politicians – as long as politicians understand how they can work.This event is for people who are active in politics as much as it is for social media activists. We’ve got innovators from all over the UK who have posted ideas that they’d like to bring to Edinburgh for this event. But it is an ‘unconference’ event – we don’t have many fixed speakers or agenda items – at our conferences, the attendees shape the event.” [seehttp://politicalinnovation.uservoice.com/forums/84565-help-us-create-an-agenda-for-edinburgh-political-i]

That means you suggest ideas and if enough people are interested, it's a goer. I've asked to discuss whether bloggers can ever compensate for the failure of the mainstream Scottish media to positively engage with ideas around independence. The event will include discussions between politicians, bloggers and journalists about the future of democracy in a networked age.

 

For more information on this event please call Paul Evans (07973 714206) or Mick Fealty (07984 150399) or email [email protected] – tickets are free of charge and can be booked using the website at http://www.politicalinnovation.org/events

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