The more I study politics and especially the ways in which it is reported, the more I come to realise that the motives of media journalists are often no more noble or sophisticated than the average Twitter troll (personal disclosure: I am an average Twitter troll).
So when the wolves come for Nick Timothy and Fiona Hill, Mrs May’s close advisors, it doesn’t mean that all of the message they were promoting was wrong. Indeed this links with a corollary, that Mr Corbyn’s (very relative) success does not mean that his mad prescriptions were right or practical.
In any event, the overriding issue (along with terrorism) is social care. As someone who doesn’t stand to inherit a bundle of cash anyway, I greatly dislike the notion that it is better for me and my children to fund other people’s parents’ and grannies’ care in old age, just so their inheritance can be bigger. In fact, my feelings are more than ‘greatly dislike’. So the Tory plan for social care was brave and necessary, if only to kickstart the discussion as opposed to kicking the can down the road.
The biggest complaint, though, was about our social care proposals. You can criticise the policy, but we need to be honest with ourselves. Since we have an ageing population, we need to spend more on health and care, and we need to decide how to pay for it. We can ask older people to meet the costs, subject to certain protections, from the wealth they have accrued through life, or we can tax younger generations even more. Somehow we have reached a point where older people with assets expect younger, poorer people to pay for their care. With Britain’s demographics, that is not sustainable; neither is it socially just.
Bizarrely, it seems that Boris Johnson, the bien pensant left from various parties and the Scots Nats all share the same political philosophy. To quote Boris:
“My policy on cake is pro having it and pro eating it.”
I see this all the time, because I’m a standard middle class professional, who pays a huge whack in taxes, and I work in the public sector, where I’m fairly well paid. The thing is, I’m not complaining.
I have various colleagues – not as many as you might think, as NHS surgeons tend to be realists, not fantasists – who bang on about Thatcher (stepped down twenty five years ago), Tories (I am not one, by the way) and ‘unfairness’. Oddly enough none of them actually claim the NHS is being privatised, because it’s manifestly not.
All these people, and many many more, including some of my relatives, rant on about Michael Gove (the most polite bogeyman ever), Osborne and Cameron as if they’re devils incarnate. Strangely, rich middle class politicians like the politically late Vince Cable, Ed Balls, even the monstrous hypocrite Alex Salmond, get a free pass. Same for hacks like the ridiculous and wealthy Polly Toynbee, Will Hutton, James Naughtie and the rest of the BBC cosa nostra.
My theory is that in the privacy of the polling booth, quite a few of these people probably voted Tory. There was an interesting breaking of lefty ranks when the mansion tax absurdity looked like it might become reality, and various dopey showbiz types realised that Ed Balls actually did intend to rob their bank accounts, if given the chance. I’m pretty sure that the Guardian editorial conference finds someone like Dave far more congenial than they would ever admit to in print. However, none of these people would ever relinquish their right to complain in public but benefit in private.
You have to be nearly my age to remember the benefits that Thatcher provided for all of us, not just Tory voters. No-one would ever go back. The Guardian and the Mirror rapidly copied Murdoch’s new production techniques that lead to the famous Wapping strike. Everyone takes easy access to communications for granted – phone, post offices etc – believe me, it wasn’t like that in the 70’s. There are hundreds of practical, everyday examples.
The SNP are possibly the most hypocritical of them all. Here is the incisive Iain Martin, who understands the Nat psyche far better than most of the other London based hacks, on ‘Full Fiscal Autonomy‘:
If the Nationalists complained about getting such a deal, with full fiscal autonomy, because the collapse in the oil price will leave a massive black-hole in Scotland’s finances, there would then be the beautiful spectacle of the SNP complaining about the Westminster Tory-led government wanting to give the Scottish parliament too much power. In such circumstances, God help Scottish taxpayers.
It goes further. At every election/referendum there are always a few public figures so far up their own backsides that they issue proclamations about leaving the country if they don’t like the outcome. The most delicious of these is naturally Paul O’Grady.
This is a professional Scouser of limited talent, who made a fortune by playing a professional Scouser drag queen whilst tapping into the anti-Thatcher zeitgeist from 1978 onwards. He now doesn’t wear a dress, but the act is the same, and naturally, given he’s on the BBC a lot, he’s a publicly funded multimillionaire. As Paul said:
“I can’t live under this bloody Government any more. I am going to get a house on the Lido in Venice. I have paid a fortune in tax and I will say ‘you can have that mate’. What I am going to do in a house on the Lido in Venice when I can’t speak Italian and hate pasta, God only knows. But I can’t live under this Conservative Government, this Coalition. That is why we have to vote Labour, we have to get Ed in, we have to make changes.”
At the time of writing, he seems to still be here.
Similarly, as everyone knows, if you genuinely want to pay more tax, as opposed to lofty declarations about the desirability of such a course of action, then HMRC will gladly accept your cheque. I’m making enquiries, but it seems that the anticipated flow of money from North London to the Treasury has yet to start.
Really, all these idiots should publicly thank all the voters who stopped Miliband et al getting in, because they are the major beneficiaries. And in their heart of hearts, they know it.
Five years ago, just after the last election, The Knife posted a piece called Vote Labour and Die. It actually became my most viewed piece, simply because it got highlighted by Guido. It resulted from a paper in the BMJ, on Public Health (which is purely the specialty’s name, it doesn’t necessarily mean the actual health of the public). Written by a leftie (as are many PH docs, see Prof Ashton), published in a leftie journal, it noted that in Labour voting areas, you were more likely to die young. This was the fault of New Labour, and by extension, wicked Tories etc.
Fast forward to the imminent general election. Here is Scotland’s First Minister:
‘The Tory/Lib Dem government’s plan to further increase the state pension age is a worry to people across the UK who are planning for their future, but the failure to take Scotland’s specific circumstances into account is particularly unfair. SNP MPs will reject any plans for a further increase in the state pension age Our comparatively low life expectancy rate is an issue which I will do everything in my power to change but in the meantime it would be completely unacceptable for people in Scotland who have paid in to a state pension all of their lives to lose out. That is why SNP MPs will reject any plans for a further increase in the state pension age.’
Note that phrase ‘Our comparatively low life expectancy rate is an issue which I will do everything in my power to change’. Ms Sturgeon, in case anyone had forgotten, was Scottish Health Minister from May 2007 to September 2012. Much of that time was spent bossing hospitals about arbitrary targets. The Scottish life expectancy remained dire in the usual areas of the country. Despite her careful phrasing, Ms Sturgeon’s schtick is quite clearly that we’re dying young, give us the money now. There is no meaningful attempt to rectify a serious social issue. The answer is certainly not more dependency, more welfare state.
Basically the SNP now regard Scotland as a block vote client state, to do their bidding. It is likely that one day their emerging capacity to take the populace for granted and avoid genuinely improving their lot will rebound on them. How do I know this? It is because it is exactly what Labour did for years, with their Scottish block vote, and for which they are about to pay a very high price. The absolute high priest of that movement was Gordon Brown, now a broken figure, despite his referendum swansong. His prolonged bribe of the Scottish electorate has utterly failed.
All of this begs the question, what is wrong with the Scots? Why do they lurch from one unambitious greedy socialist regime to another?
Most commentators invoke the Enlightenment, and the spirit of Adam Smith as the example of Scotland at its best, what it could still be. The truth is there has been no thinking of that kind, no figure of stature in power or influence in Scotland for a very long time. The country actually did pretty well in many ways under the bogey figure of Thatcher, but such a claim doesn’t suit the narrative of either Labour or the SNP, for whom droning on about misreported events of thirty years ago is almost a form of prayer.
Scotland has become a soft and sappy nation, intellectually listless, coddled, a land of received wisdom and one-track minds, narrow parameters and mass groupthink. It slumbers, like a once-feared dragon now hidden away in a mountain, dozily coiled around its ancient, pointless treasures, interested only in its own welfare…..The Scottish Labour Party, now perilously close to oblivion, has only itself to blame. For decades, it has gleefully demonised the Tories, blaming them for all of Scotland’s ills even as it made a pig’s ear of running the Edinburgh Parliament. This cheap tactic, aped since the 1980s by the then newly left-wing SNP, created a sense of otherness, of moral superiority, in relation to England….
The relationship between business and the Government is comically bad, beyond a few pro-separatist oligarchs.
We have become a land peppered with conspiracy theorists who believe in secret oil fields and MI5 plots and rigged polls, all of which is tacitly encouraged by the Nat government. If anyone on social media – especially, God forbid, a non-Scot – dares to challenge these ludicrous myths they are descended on by the ‘cybernats’, a swarm of angry oddballs who refuse to read the ‘mainstream media
Deerin references another Scot, Bruce (the Brute) Anderson, who in a very eloquent piece, correctly entitled ‘Never before has Scotland been quite this deluded‘ spells it out:
The Scottish public mood is extraordinary. Over the past few months, millions of Scots have been baying at the moon. The most bizarre fantasies have not only circulated; otherwise sane people have given them credence….How can this be happening? The Scottish Enlightenment represented the triumph of rationalism, always in a calm and restrained fashion. Its philosophers and economists believed in using reason to improve the human condition, not to reshape human nature. They virtually invented free enterprise; they elevated Scotland to the intellectual leadership of Europe. In a splendid setting, the Castle on one side, the sea on the other, their contemporaries laid out the New Town. Calm, rational and beautiful buildings: it is the Enlightenment as architecture.
While it would be absurd to claim that every Scot has read Adam Smith, there were grounds for believing that Enlightenment values had influenced the Scottish character. Keynes poked fun at so-called practical men, dismissive of theories, who were actually in thrall to some long-dead economist. If that economist had been Scottish, the thraldom would be benign.
…(after Thatcher) there was a quarter of a century of demonisation, which drove economic common sense out of Scottish public debate. By the end, many young Scots had come to believe that Scots’ values were superior. Scotland stood for social solidarity, and indeed socialism. It stood for the public sector, not for private enterprise. Mrs Thatcher and her English capitalist friends hated the Scottish ethos, which is why they had set out to destroy the Scottish economy. This brainwashing explains why Nicola Sturgeon will have earned huge applause in Scotland for attacking Ed Miliband from the Left. Scottish Labour helped to sow the dragons’ teeth, never expecting that the dragons would turn on them. They ken the noo.
Not since the Thirties has a once great nation been in the grip of so many delusions. This is malign thraldom
So there you have it. One day, probably sooner than anticipated, Sturgeon et al will meet hard reality. I do not believe, even if there is another referendum, that the result will be any different. No Scots Nat has in living memory produced a coherent plausible argument supporting an independent economy, and the country knows that. However, as long as Labour and the Tories continue to assuage lunatics like the SNP with large tranches of public money, and no real responsibility for obtaining it, the current ‘malign thraldom’ will continue.
In the meantime, vote SNP and die. Just make sure you get your pension early, it’s what the First Minister wants.
HERE we go! This is the week that will decide if Mystic Trev got it right by predicting a Tory election victory on May 7, perhaps even with an outright majority.
My new year prediction was seen quite reasonably as “wishful thinking”.
How could David Cameron hope to win with all the electoral arithmetic so stacked against him?
Even in the good times, governments struggle to increase their majorities, so it was impossible to imagine the Conservatives grabbing the lead after five years of austerity.
But even those pollsters who studied their charts and muttered about marginals are now beginning to see daylight between Dave and Red Ed.
My friend Peter Kellner, whose YouGov poll appears daily in The Sun, thinks Labour is flagging at the most dangerous time.
The clincher comes on Wednesday when George Osborne’s Budget breaks the opinion poll deadlock and allows the Tories to kick up a gear.
“If the Chancellor’s budget goes down well, his party could gain enough extra support to govern in its own right,” says Kellner.
“Its prospects of an overall majority remain slim, but David Cameron might be able to lead a minority government for a full five-year term against a splintered opposition.”
True. But I believe the Tory lead over Labour will yawn wider as the election race gets into its stride.
Key to it all is the “splintered opposition”.
It is not just Tony Blair and Peter Mandelson who have given up hope. A third of Red Ed’s own Shadow Cabinet believe he’s a loser.
Rivals are already jockeying for succession.
This has nothing to do with bacon sandwiches or Ed’s many kitchens, although these images are being picked over and debated as much by leftwing papers as by the Tory press.
The party is split from top to bottom — trade union dinosaurs versus despised Blairites.
Thanks to Gordon Brown, it faces wipe-out in Scotland and may be fighting for its life as a viable political force South of the border.
The vacuum is filled by the opportunist SNP, shameless Lib-Dems, shambolic Greens and protest parties like Ukip who seem to have run out of puff.
George Osborne is a lucky Chancellor.
Thanks in part to falling oil prices, the economy is in better shape than he dared dream barely a year ago. But to be fair he has made his own luck.
He has been criticised both for doing too little and too much to slash spending and borrowing.
But his famous long-term plan, cobbled together along the way, is working.
The UK recovery, once derided as “flat-lining”, is now hailed by global experts as entrenched and robust.
Economic growth is surprisingly strong.
Unemployment is amazingly low, half the European average with jobless EU citizens stampeding across The Channel to join in.
Earnings are outstripping the cost of living.
Low-paid workers can earn more than £10,000 – close to a living wage in some parts of the country – before paying any tax at all.
That threshold will rise still further.
As tax revenues start to exceed government spending, the Chancellor finally has room for manoeuvre.
This week, he will tempt voters to give the Tories another chance.
There will be more help for the low-paid, a fairer deal for middle-earners, a boost for the crucial “grey vote” by ending rip-off pensions and the loathed inheritance tax on homes.
Broadband investment will fuel the boom in small business start-ups.
New rail links should boost the Chancellor’s dream of a “Northern Powerhouse”.
This will be a “feel-good” budget, a package of silver linings set against Labour’s cloud of despair.
Mr Osborne insists there will be “no giveaways, no gimmicks”. But he likes to leave his supporters asking for more.
It will be surprising if there is not a surprise.
And a few cheers when the Chancellor skims a penny or two off a pint — as eerily foreseen in The Sun on Sunday’s crystal ball yesterday.
This blog began in the build up to the 2010 election, and I didn’t quite predict the outcome then: Cameron as PM, yes, but coalition seemed unlikely. Economically I doubted we’d be where we are now, it always looked like it would take two terms to right Gordon Brown’s (and the two Eds) many wrongs. This time I’m going for Cameron as PM, UKIP/DUP coalition or ‘arrangement’, probably marginally a minority government. Which, given the alternative, would do just fine.
In 2011, this blog introduced the concept of PWUGO (People Who Underestimate George Osborne), which was inspired by the Don’t Underestimate Ed Miliband Association (DUEMA), invented by Iain Martin in the Telegraph (since rebranded as the Don’t Unseat Ed Miliband Association).
PWUGO always had a large membership, such was Osborne’s reputation and the sympathetically reported rants of people like Ed Balls. DUEMA always had a small membership, and I would guess that it’s shrinking.
The International Monetary Fund (IMF) were clearly signed up to PWUGO, witness the doom laden rhetoric of their chief economist, Olivier Blanchard, about a year and a half ago . Most of the media went along with it at the time. Balls was clearly enjoying himself, but even then it was clear that they were wrong, if only because of the unfailingly reliable sign of Nick Clegg leaping on to their bandwagon, despite being, in theory, part of the government**.
Fast forward to now. The Knife is no uncritical admirer of the government, or of Osborne, but I take my hat off to the fragrant Christine Lagarde for openly apologising for the IMF’s behaviour:
“We got it wrong,” Ms Lagarde told the Andrew Marr Show. “We acknowledged it. Clearly the confidence building that has resulted from the economic policies adopted by the government has surprised many of us.”
“We said very clearly that we had underestimated growth for the U.K. and that our forecasts had been proven wrong by the reality of economic developments,” she said.
Pressed on whether she had apologised to Mr Osborne for the incorrect forecasts, she said: “Do I have to go on my knees?”
Seems fairly clear. PWUGO may have to be disbanded at this rate. Like DUEMA. How long ago thisseems.
** as if by magic, the day after this post, here he is again.
This article, by Andrew Lilico, is so good it should be a mandatory read for any school pupil studying economics, philosophy, history, politics, sociology, psychology, the lot. It cuts to the very heart of nearly all political debate and manoeuvring in the UK (and elsewhere).
It’s not a long piece, and I’ve just pinched the first couple of paragraphs for an accurate taste of Lilico’s clear-sighted argument:
It appears to be all the rage to have opinions about how wealth is distributed, debating for example whether billionaires should ‘get to keep’ their money. I consider that impertinent, offensive and sinister.
Your wealth (and note carefully that I am discussing wealth, not income here – the issues with income are slightly different) is your property. Property is private. Your house, your car, your TV, your share portfolio – they are yours, just as much as your hair or your intelligence or your skill at tennis are yours. Suppose someone said: “I believe the distribution of hair is unfair, so we are going to take some of your hair away.’ You would think that a monstrous violation of your personal liberty, of your privacy. But would it really be any different if someone said: ‘The distribution of toys is unfair, so we are taking some of your children’s toys away’ or ‘The distribution of televisions is unfair, so we are confiscating yours’?
This is not really party political, as they all get this fundamental issue wrong at times, but clearly Ed Miliband’s entire economic policy, if you can call it that, is based on taking other people’s wealth, and the Lib Dem’s ludicrous ‘mansion tax’ is another fine example.
In 1997, coincidentally when New Labour got in to power, there was a fine TV documentary on the Nazis called The Nazis: A Warning from History. I always liked that title. The very brief synopsis was “…how a cultured nation at the heart of Europe allowed Hitler to come to power”. Not that I’m for one second comparing Labour to the Nazis. Genuinely. I want to avoid Godwin’s Law.
However, the shocking thought is that today, just over a year till the general election, Ed Miliband, Balls, the whole rotten crew may be looking good to get back into power. I say ‘may’ because of the polls, which may be narrowing, but it actually seems incredible to me given the damage that they wrought that they’re still not locked up.
…(the) Labour leadership’s growing confidence that the Tories are stuffed and Miliband is on course to win the next general election. The party has a poll lead. While it is not impossible to envisage the rough positions of the two biggest parties (38 points to 32 points) being reversed if the economy booms and Cameron has a good campaign, it will be very difficult for the Tories to pull it off.
With 14 months to go, Miliband and his team see victory looming only six years after Labour presided over the biggest economic disaster in seven decades, which hit Britain particularly hard because of calamitous mismanagement based on the insane idea that boom would never turn to bust. That fatal, hubristic miscalculation meant that it was regarded as somehow fine for Britain to build an epic pile of private debt and expand the banking system from 143 per cent of UK GDP in 2000 to 450 per cent of GDP by the time of the crash. It left the UK especially badly exposed when the inevitable downturn came. From the ashes of all that, the country may well get an Ed Miliband premiership. You have to hand it to him. In the circumstances it is an achievement even getting this close to power. Quite extraordinary really.
I apologise in advance for the length, and slightly parochial nature, of this post. However, if you live in the UK, it’s very important.
The Knife has long had a very low opinion of the strangely overrated creature that is Alex Salmond. He rarely produces a cogent argument for his separatist madness, but then again, he’s rarely been challenged. The Scottish media – with a few honourable exceptions – is largely supine. The UK media seem to regard it as a sideshow. It is, but a dangerous one.
Well Fat Eck has now met his match, with numerous commentators deeply unimpressed by his bluster. After a typically low profile few days while he dreamt up some new insults and excuses, he made his usual feeble railing speech today.
As so much of real life centres round economics, as opposed to reliving Braveheart, it is helpful to examine this area in detail. Step forward the remarkable Adam Tomkins, Professor of Public Law at Glasgow University. Not only does he have a very handy Twitter account, he also has a superb and very honest blog: Notes From North Britain. This is only an extract from a truly excellent post, despite its length, it’s a fine read, and a masterly summation:
What the Chancellor said was that there will be no currency union between an independent Scotland and the rest of the United Kingdom. He said this on the basis of independent, expert and hard-headed analysis — all made public — prepared by HM Treasury and signed off by the Permanent Secretary to the Treasury, no less (the civil servant who is leading the UK Government’s ongoing series of Scotland Analysis papers, about which I’ve written before). The Chancellor’s verdict — that it could not be said to be in the best interests of the rest of the UK to enter into a currency union with an independent Scotland — is not a narrowly partisan position adopted in the interests of the Conservatives. It is, on the contrary, a position with which the Liberal Democrat and Labour parties whole-heartedly agree. For the Lib Dems, Danny Alexander gave a statement agreeing with the Chancellor and for Labour Ed Balls wrote in the Scotsman explaining his reasons why a Labour government could not “enter into a new sterling monetary union to share the pound with an independent Scotland”.
None of this means that an independent Scotland could not use the pound. Any country anywhere in the world could use the pound if it wanted to. Likewise, the UK could abandon the quaint notion of having a currency of its own and could use the US dollar if it wanted to. But, for the UK to use the dollar in this way — or for an independent Scotland to use the pound in this way — would have massive drawbacks. (Just pause to wonder: why is it that so few states in the world use the currency of another state? Why is it that most states in the world prefer to have a currency of their own?)
Using the currency of a foreign state without entering into a monetary union means that you surrender the entirety of your monetary policy to that foreign power (in the words of the Scottish Government’s own Fiscal Commission, it would mean that “the Scottish Government would have no input into the governance of the monetary framework”). Using the pound without entering into a currency union would mean that the Scottish Government would have no power to print money. Its borrowing would be in a foreign currency, making it inevitably more expensive. Even if it had a central bank it would have no power to create reserves. Any shock to the economy would have to be absorbed using only fiscal policy (because Scotland would have no monetary policy of its own). Suppose that the oil price crashes (and it is notoriously volatile): any shock to the economy would have to be absorbed by putting taxes up or cutting public spending. Murdo Fraser MSP drives the point home even further: an independent Scotland unilaterally using the currency of a foreign state would mean, he says, that “there would be no one to stand behind our financial institutions in the event of another economic crisis. That means waving goodbye to RBS, to Standard Life, to Aberdeen Asset Management, to Alliance Trust, and to a whole host of other financial institutions, who would have no interest in continuing to be based in Scotland without that protection. It would be a disaster for the Scottish economy”……
…..The Nationalists reacted in four ways, each of them profoundly wrong. First, they said “it’s Scotland’s pound too”, insisting that no-one could take it away from us and that Mr Osborne was “bullying Scotland”. Secondly, they said “if we cannot keep the pound, we’ll not take our share of the UK’s debts”. Thirdly, they said “it’s all just campaign talk, it’s a bluff that will change on day 1 after we vote Yes”. And finally, they said that the Chancellor’s stance was in breach of the Edinburgh Agreement. This last point is perhaps the most disingenuous of the lot, and I’ve dealt with it before. It is time for the SNP’s wilful misrepresentation of the Edinburgh Agreement to stop.
That the SNP reacted in these ways was not surprising. But what has been disappointing is the way that some in the Scottish media — and several commentators who should know better — have failed to see how ill-conceived the SNP’s reaction has been. Let’s look at this in more detail.
First, the line that it’s Scotland’s pound too. This is straightforwardly wrong in law. There is no secret about this. I’ve written about it at length here. I told the House of Commons Scottish Affairs Committee all about it last month. Better Together posted my legal analysis on their Facebook page. And the Treasury’s supporting documentation, published alongside the Chancellor’s speech, contains a perfectly accessible four-page annex on “the legal position of the UK pound”. The currency is not Scotland’s (and it’s not England’s either). It is the currency of the United Kingdom. If Scotland votes Yes to independence it will have voted to leave the United Kingdom: that’s exactly what “independence” means — independence from the United Kingdom. If Scotland leaves the UK it leaves the UK’s public institutions, which would become the institutions of the rest of the UK. The UK’s assets and liabilities would fall to be apportioned equitably between the rUK and an independent Scotland, but the pound is neither an asset nor a liability. Any gold or other reserves left in the Bank of England would fall to be apportioned. So would the national debt. But the pound itself would not. It is Scotland’s pound now because and only because Scotland is part of the UK. If Scotland votes to leave the UK it votes to leave the UK’s pound.
It really could not be more simple, could it? But it is staggering how many folk get all this wrong. Iain Macwhirter, one of Scotland’s leading political commentators, wrote on his blog that “the pound is common property”. Straightforwardly wrong in law. For Macwhirter, the UK Government setting out and standing up for what is in the best interests of the rUK was as act of “coercion by the UK political establishment, an act almost of economic warfare”. Such bellicose interpretation is so over the top that it would not be out of place on the most extreme of the Nationalist blog sites. STV’s Scotland Tonight has a strong claim to be Scotland’s flagship news and current affairs programme, but its researchers were evidently too busy to read the legal analysis on the position of the UK pound which the Government, the House of Commons and others have published, leaving its hapless presenter to ask the Chief Secretary to the Treasury why his Government were refusing to apportion the pound as an asset and failing to correct the First Minister when he said that the Bank of England is an institution of which an independent Scotland would have a share. An all-party House of Lords committee explained as long ago as April 2013 that the SNP’s plans for sharing the Bank of England post-independence were “devoid of precedent and entirely fanciful” but, since then, neither the Scottish Government nor its Fiscal Commission have done anything to explain why these conclusions were mistaken. One can only assume that this is because they know damn well that they are not mistaken.
As for Scotland refusing its share of the national debt, this is basket-case economics. The debt is currently the UK’s. In order to reassure creditors (and to preserve its credit-rating) the Treasury has made plain that it will continue to honour the debt even in the event of Scottish independence. But this does not mean that Scotland would be born debt-free. On the contrary, as part of the separation negotiations the rUK would secure from Scotland an agreement to service an equitable share of the UK’s debt. There is no chance that Scotland could walk away from this obligation without punishing consequences being imposed at the hands of the international money markets. An independent Scottish state would need to borrow from day 1. There is no question about this (for those in doubt, Ian Smart explains it here). A responsible Scottish Government would do everything it could to ensure that it was able to borrow on the most favourable terms possible. This precludes absolutely any refusal to service a fair share of the UK’s debt.
Worth reading the whole thing. Keen intelligence v paranoid rants.
This post is not party political. Instead, it is intended to illustrate (and very nicely), how different interpretations of history make a big difference to the lessons that we take from events, in this case matters of national financial health. It’s from this weekend’s FT, and is a letter by Phillip Oppenheim. Expect to hear more on this theme of ‘why can’t we be more like Norway’, when shale gas takes off. Economics truly is a “dismal science”:
Sir, Misha Glenny’s assertion that under Margaret Thatcher, Britain decided “to fritter away” its oil revenues “in a binge of tax cuts”, in contrast to Norway’s prudent policy of squirrelling away their revenue in a sovereign wealth fund, has become common currency, rarely backed by figures – it’s time it was challenged. (“In shale, Britain has a second chance to mend its fortunes”, January 18.)
Some facts: UK oil revenues in the 1980s: £166bn real terms – population 56m. Norway’s oil revenues over the past 10 years: £210bn – population 4.9m.
You do the maths, as they say, but I make it that UK per capita oil revenues at their peak were only around 7 per cent of Norway’s. Indeed, Norway’s oil fund was founded in 1996 in part because the income per capita was so massive that the economy would have overheated if the revenue had been kept in Norway. Oh happy, small country!
Factor in the small matter that Mrs Thatcher inherited an economy seemingly in terminal decline, with a serious national debt and penal tax rates in the midst of the cold war – at a time when no one had heard of sovereign wealth funds – and the picture alters some more.
Mrs Thatcher’s policies also included growing the economy by reducing direct tax. True, UK manufacturing went into sharp decline during the early 1980s – partly due to sterling’s oil-related rise. But output, including manufacturing, rose sharply from 1985 and ended the period substantially up – in contrast to the record of the previous or subsequent Labour governments, both of which saw a fall in manufacturing. So perhaps it worked.
Many also ignore the fact that not all oil revenues went into tax cuts. Public spending also rose substantially in reals term under Mrs Thatcher, though not as a percentage of gross domestic product.
The government of 1979-97 made mistakes, but I’m not sure that setting up a sovereign oil fund, which invested among other things in shopping malls and distressed debt – as Norway’s fund has – would have been better than putting the money into the NHS and people’s pockets.
The Knife is ostensibly a fairly established NHS surgeon, slowly becoming a “senior” figure, whatever that means. Then I read in various papers, and hear it on the TV news that NHS consultants such as me “know of problems but cannot speak out. We only hear about it when there is a big case like Mid Staffs, but now it seems it is more widespread”.
Golly. Well actually, yes, I do know of a few problems in our public sector healthcare.
But there’s more, in this case regarding the widely misinterpreted Mid Staffs business:
‘For years, this dreadful care went on and no doctor put his head above the parapet,’ he said. ‘Why is that? One part of the answer is that they are frightened. ‘Even if you are an alpha-male surgeon, you are frightened. We might feel that’s not good enough, but that is the situation.’
Well, I hesitate to award myself the ‘alpha male’ tag, but as the saying goes, walls are for physicians**.