tag:blogger.com,1999:blog-16941181627525683882024-03-06T06:30:04.971+01:00Scotland Unspun"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von MisesAlex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.comBlogger276125tag:blogger.com,1999:blog-1694118162752568388.post-7517866125260828302011-06-26T01:23:00.001+02:002017-03-07T17:51:33.943+01:00GERS Report Shows Scotland subsidises UK, says Professor Andrew Hughes Hallett The following interview was conducted during my tenure as Chief Editor of the former title <i>Newsnet Scotland</i>. I intend to resume publishing with the title <i><a href="http://www.scottishtimes.com/">Scottish Times</a></i> in due course.<br />
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<strong>EXCLUSIVE:</strong><br />
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Professor Andrew Hughes Hallett is a world class economist who divides his time between George Mason University in Virginia and St Andrews.<br />
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From 2001 to 2006, he was Professor of Economics at Vanderbilt University (Nashville) and before then at the University of Strathclyde in Scotland. He has been Visiting Professor in Economics at Princeton University, Bundesbank Professor at the Free University of Berlin, and has held visiting positions at the Universities of Warwick, Frankfurt, Rome, Paris X, Cardiff and at the Copenhagen Business School.<br />
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<strong>PROFESSOR HUGHES HALLET, COULD YOU SUM UP YOUR IMPRESSION OF WHAT THE NEW GERS REPORT TELLS US ABOUT THE SCOTTISH ECONOMY DURING THE DEEPEST PART OF THE GLOBAL RECESSION IN 2009-10?</strong><br />
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The things that stand out are that it has been a rough couple of years, but Scotland had weathered the storm better than the UK as a whole. She has a budget deficit for the first time in half a dozen years but it is a smaller deficit than the UK. So the implicit subsidy to the rest of the UK (RUK) is still there.<br />
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What’s more, this has been happening in a period when oil prices were low. This is of course a backwards looking exercise (up to April 2010). Those low prices were reversed a year ago, so the implicit subsidy will have increased markedly since then.<br />
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Note: all my remarks take the revenues/spending actually raised in Scotland, as opposed to those allocated to Scotland by the accounts (which are often quite different). You will appreciate the significance of that difference.<br />
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<strong>IN WHAT WAY IS SCOTLAND SUBSIDISING THE REST OF THE UK?</strong><br />
Public spending has fallen as a percentage of UK total each year since 07-08, so Scotland is being squeezed more than RUK. That seems unfair, and it goes back to when Gordon Brown took over as PM.<br />
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However the share of Scottish public spending in the UK total has risen<br />
when oil revenues are included, so RUK is relying more and more on Scotland’s share of oil revenues for its spending.<br />
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The deficit on the current budget is 6.8 per cent of GDP, whereas for the UK as a whole it is 7.6 per cent. Again you see the implicit subsidy to RUK - equivalent to about one per cent of our GDP being sent south (adjusting to get RUK figures, rather than all UK figures).<br />
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Adding in capital spending, the figures become 10.6 per cent (Scotland) versus 11.1 per cent (all UK). Same story.<br />
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Note capital spending in Scotland is rising fast (unlike RUK) as it should be to power the way out of a recession. Correctly: any recession is too good to waste!<br />
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<strong>WHAT ABOUT THE VOLATILITY OF OIL INCOME?</strong><br />
Non-oil GDP is down 3.0 per cent, but with oil it fell 7.5 per cent. As I said, oil was a damaging factor in this period, but will have improved now. Hence Scotland is actually doing better than it appears from these figures.<br />
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However, UK GDP is down only 1.8 per cent. So Scotland's performance has been weaker than UK, presumably because she is subsidising the latter and because she has been allowed to run a smaller "counter cyclical" deficit.<br />
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<strong>IS THERE ANYTHING IN GERS THAT THROWS LIGHT ON THE SNP GOVERNMENT’S DEMAND FOR MORE TAX POWERS?</strong><br />
Income tax revenues are down 2.8 per cent overall, implying a significant deflation bias under the current Scotland Bill proposals - as many had argued when the Bill came to the Scottish Parliament last year.<br />
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But more significantly many of the other tax revenues are now rising as a share of total revenues: I note here national insurance contributions, fuel, and particularly excise taxes (tobacco, alcohol, vehicles).<br />
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So income taxes are a poor source of revenue to rely on. Think what you could have done with a wider spread of tax revenues to power the spending to get out of recession and to use as levers to grow the economy.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com2920tag:blogger.com,1999:blog-1694118162752568388.post-88578730300946662182011-06-23T14:24:00.001+02:002017-03-07T17:55:56.775+01:00Scotland better off leaving bankrupt BritainPublished during my tenure as Chief Editor of the former title <i>Newsnet Scotland. </i>I intend to publish under the title <a href="http://www.scottishtimes.com/"><i>Scottish Times</i></a> in due course.<br />
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Despite a huge drop in North Sea oil prices in the year 2009-2010 an independent Scotland would have been better off economically being outside the UK according to newly released Government figures.<br />
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Commenting on the new GERS (Government Expenditure and Revenue Scotland) figures released today one of Scotland's leading investment bankers Ben Thomson, chairman of the Campaign for Fiscal Responsibility, said: "The latest GERS figures show that Scotland’s budget position in 2009/10 was better than for the UK as a whole.<br />
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"As a percentage of GDP, both Scotland’s net fiscal balance (-10.6% compared to the UK’s -11.1%) compare favourably with the UK as a whole." (See chart)<br />
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"This is despite the drop in Scotland’s geographic share of North Sea revenues for 2009/10 from £11.7 billion to £5.9 billion which has resulted in a deterioration in Scotland’s budget position. <br />
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Debt to GDP ratio based on GERS</div>
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"It is also worth pointing out that this will also have improved considerably since 2009/10, the year covered by GERS.<br />
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"The Office for Budget Responsibility (OBR), in its 2011 Budget Report, estimated that North Sea revenues would average £13.4 billion over the next five years of which Scotland’s geographic share would be £12.2 billion.<br />
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"This is more than double the revenue levels in 2009/10 and would bring Scotland’s net fiscal position close to balance."<br />
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<strong>Compared to current UK debt</strong><br />
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Against a backdrop of out-of-control UK debt it is clear that Scottish families, institutions and businesses would benefit significantly from independence. This year UK public sector net borrowing for April and May totals £27.4bn which is £1.5bn more than the same period in 2010 according to the official ONS (Office of National Statistics) report.<a href="http://www.newsnetscotland.com/economy/2782-bankrupt-britain-borrows-even-more.html"> </a><br />
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<strong>UK consumer confidence</strong><br />
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According to YouGov's Household Economic Activity Tracker (HEAT) UK consumers remain extremely negative (-26 points) about the next 12 months ahead. This compares woefully to China which has a positive (+42 points) rating making the difference in consumer outlook between the two economies a 68 point gap.<br />
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<strong>Newsnet Scotland Comment</strong><br />
With oil revenues much higher in the last year it is clear that being released from its share of UK fiscal debt an independent Scotland would be in the position to increase the standard of living of all Scottish citizens.<br />
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Yes, as Unionist commentators like to point out an independent Scotland would have carried debt in this single year but as can be seen it would be less debt than it must carry as part of the UK.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com0tag:blogger.com,1999:blog-1694118162752568388.post-63697871936943566552011-06-13T19:32:00.002+02:002017-03-07T17:58:21.801+01:00Cost of the Union to every Scot - £2, 413 each yearPublished during my tenure as Chief Editor of Newsnet Scotland. I will resume publishing under the title <a href="http://www.scottishtimes.com/"><i>Scottish Times</i></a> in due course:<br />
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Scots must pay £12.546 billion every year just to stay in the Union according to Office of National Statistics (ONS) information. UK public sector net borrowing (excluding financial interventions) was £139.4 billion in the year 2010/11 and so Scotland's share based on 9% population amounts to £12.546 billion.<br />
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This is at least the annual cost for Scots of remaining within the Union as Scotland's national accounts show a surplus meaning none of the debt is accrued in Scotland.<br />
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According to world-renowned economic expert Professor Andrew Hughes Hallet Scotland's economy, unlike the UK economy is in robust shape:<br />
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“Scotland’s accounts, rather than those compiled in London, show that Scotland has a small net surplus, rather than being a net beneficiary from the UK."<br />
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The bad news for Scots is that the UK treasury is accruing debt which is accelerating owing to bad house-keeping south of the border and dragging the Scottish economy down with it.<br />
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Think Tank statement<br />
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An analysis from the right-wing think tank - the Institute of Economic Affairs (IEA) - shows Scotland's share of the UK's skyrocketing public debt will be a staggering total of £110 billion by the time it is likely to become independent.<br />
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This sum is startling and, to make matters worse, is set against official UK Government figures which forecast unprecedented levels of UK debt which will surge past £1.1 trillion this year.<br />
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Perhaps not surprisingly these figures will be used by pro-independence supporters to show that Scotland must get out of the sinking UK ship as quickly as possible.<br />
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There's no cause for alarm though as Scotland will have the ability to escape this problem if it votes 'Yes' in the forthcoming independence referendum. The real problem facing the budgets of Scots families, institutions and businesses is that the SNP Government may wait too long to call the independence referendum while each year Scots have to pay £12.5 billion and rising - merely to be ruled from London.<br />
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Based on the official figures it costs every single Scot £2, 413 per year to pay off a debt they didn't cause. This debt could be avoided if Scots vote 'Yes' in the referendum and so would be an 'independence dividend'.<br />
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With full independence Scotland will control its oil and gas reserves and so have no problem picking up this 'Union tab' but how much longer will Scots tolerate austerity and benefit cuts designed for a plummeting UK economy?<br />
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Scotland's share of UK debt is unlikely to be as bad as the analysis by the IEA's Richard Wellings suggests as it bases its figures on Westminster public spending figures which are exaggerated. For example the entire cost of maintaining Trident is classed as a Scottish expense rather than a UK one. Wellings' analysis though does say that there is a preferable method of estimating Scotland's share of debt:<br />
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"Better still would be an estimate that also took account of the share of UK tax revenues generated in Scotland, but such a calculation is complicated by significant fluctuations in North Sea receipts from year to year."<br />
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As we know Scotland is in surplus and that is calculated based on our population share of North Sea oil and gas reserves. An independent Scotland would be entitled to far more of those resources than its population share and so it reasonable to assume that Scotland's share of the debt will be estimated downwards during independence negotiations with London.<br />
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Certainly, whatever Scotland has to absorb from the UK's debt mountain will be manageable - once Scotland is independent - as when oil and gas revenues are added to a Scottish exchequer our debt to GDP ratio will be far less than England's.<br />
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At the moment exports from Scotland's huge financial services sector are credited to London which means Scotland's current GDP is hugely underestimated. Post-independence this picture will become clearer and Scotland will look in much better shape to face the future.<br />
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<a href="http://www.scottishtimes.com/">News Scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com8tag:blogger.com,1999:blog-1694118162752568388.post-54653002392171631562011-06-13T19:29:00.001+02:002017-03-07T18:00:23.131+01:00Reasons Scots will vote 'Yes' to independence - Shoogly pegsA piece I published during my tenure as Chief Editor of the former title Newsnet Scotland. I will resume publishing under the title <i><a href="http://www.scottishtimes.com/">Scottish Times</a></i> in due course.<br />
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Analysis by Alex Porter<br />
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Scottish Unionism has seen better days and there are any number of angles on its current crises. So, as the great referendum debate starts to take shape can the usual arguments for Union hold?<br />
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Shoogly peg 1: The media is the massage<br />
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One worth consideration is that control over the traditional media no longer equates to control over the political loyalties of Scots. Unionist politicians can gang up on a Nat in a tv debate and believe their collective reasoning to be indestructable but the Nats still win elections. That must rankle in certain quarters.<br />
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Every year around 1.5% of the population becomes eligible to vote. These people are young and clued-in with all things world wide web. Every year 1.5% of the population - with few internet skills - leaves Scotland to the rest of us. Taken together these figures mean every year 3% of the voting population becomes instantly internet savvied and so the influence of traditional media dwindles. Of course, the rest of us in the middle are not sitting still so are also becoming more internet savvy. At every passing election the Katie Grants of this world talk exclusively to her own rapidly-dwindling kind.<br />
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One very real danger for Unionism posed by the internet is that voters have so many varied sources of information. The consequence is that their 'bollotix' alarm sounds at the merest hint of a dodgy narrative on TV news reports. People are not easily led or misled anymore. It was thanks to the internet that the SNP overcame the hositility of Scotland's Unionist media to win their historic first term in 2007. Four years later social networking and other internet channels played no small part in delivering the SNP a majority of Scotland's 129 seats in Holyrood.<br />
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It stands to reason then that the internet will play a key role in who wins Scotland's independence referendum. More Scots now get news from the internet than any other source such as the BBC and that trend is consolidated year after year in proportion to the passing of traditional Unionism and its print media allies. Unionism depended heavily on influencing traditional media and so even if there is any substantial remaining attachment to the Union, Unionists must surely realise that it can no longer get its own way because it can massage the message.<br />
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The contrived narrative about Scots having no desire to exercise their democratic right to an independence referendum is now consigned to the midden of history where it always belonged. However, said midden will have to wait a wee while longer before giving refuge to 'received wisdoms' of Scotland's pro-Union mainstream media on the subject of the benefits of independence. Will Unionism be able to bamboozle our internet savvy Scots voters into sticking with the "Union dividend" in the midst of austerity cuts? Somewhat, but Scottish nostrils will detect a reek and so an opportunity presents itself to the SNP.<br />
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Political beliefs are no longer simply drip-fed to the Scots electorate by fusty establishment figures like Jim Wallace (Lord Wallace of Tankerness) with a penchant for ermine but are arrived at using peer-to-peer recommendations via social networking channels. Scots, especially young Scots, have developed a healthy distrust of traditional media's political commentary and reportage. Information passed on from a friend, on the other hand, has value. Having young bright things such as Kirk Torrance, the party's New Media Director, to advise the SNP who have grasped this new paradigm shift leaving Scottish Unionism a decade behind the curve.<br />
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Shoogly peg 2: Independence a distraction<br />
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Watching the Unionist-leaning media having a post-mortem about what has gone wrong was the icing on the cake for Nationalist activists. Most Scots couldn't give two hoots what happened to Unionism. The Unionist political establishment, or what remains of it, is shocked and the old Jedi mind-tricks that once held sway in TV political commentary are now exposed, deliciously for independentistas, as blindingly obvious scare-tactics in real-time.<br />
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The well-worn classic is the one about how debating the constitution is a distraction from dealing with the economy. If that's the case then how can Unionists such as former chancellor Alasdair Darling also argue that an independence referendum should be held quickly so as to minimise uncertainty for business? If independence is not relevant to the economy then what could business be uncertain about? People are not daft and if you treat them as if they are they'll eventually change the channel.<br />
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For their part the Nationalists could argue that the delay in transferring tax-raising powers to Holyrood is causing uncertainty for Scottish business. Many Scottish boardrooms feel threatened by London's current advantages and so the business landscape is now very favourable to fiscal autonomy - Unionism would be foolish to lose whatever business constituency is still retains and some, such as the decimated Lib Dems, are beginning to realise that only by proposing substantially more powers will the Scotland Bill become palatable to the Scots electorate.<br />
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Today's Scots, and especially internet-savvy Scots, know full-well that independence is about politics and economics and therefore jobs and services - to suggest otherwise is treating the electorate contemptuously and the recent election showed that Scots have had their fill of specious, negative soundbites.<br />
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To his credit David Cameron, in reaction to the SNP's landslide, did promise he would make a positive case for the Union during the referendum campaign. It is not clear who in Scotland will bother to listen to the English Etonian Prime Minister, least of all Scottish pro-Union supporters. Scottish Unionists, on the whole, have defined their Unionism entirely by what they are against and so when pushed - and they haven't been pushed much until now - can't express why they support the Union except in vague terms of economic benefits.<br />
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Instead, we are bombarded with the economic downside of independence but this is never convincingly substantiated by official statistics which could prove or disprove their case. Those figures have been long concealed from public view arousing yet more scepticism of the case against independence.<br />
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Shoogly peg 3: Umbrellausterity<br />
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Which brings us to the next shoogly peg of Unionism. Scotland needs the umbrella of Union to protect it from the uncertainties of the international economy. What planet are these commentators on? The reality of living in UK PLC is perfectly and simply understood by all Scots who know what the word 'austerity' means.<br />
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Austerity cuts are imposed on Scotland by Westminster which is running an unprecendented and ballooning deficit. UK government debt stood at £903.4 billion at the end of March and heading due North. At the same time Scotland's economy under the stewardship of John Swinney is in surplus. So, despite Scotland's economic surplus the Scottish parliament has to lose out to pay for poor house-keeping South of the border. Some umbrella.<br />
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The umbrella metaphor goes from the ridiculous to the sublime when reflecting on the plummeting value of the pound. A depreciating sterling means foreign goods and components become more expensive. Scottish importers must then pass their increased costs on to Scottish consumers. What is becoming clearer, month by month, is that an increasing number of economists and analysts accept that there is no reason to believe that austerity measures and historic low interest rates will do anything but make the UK economy worse.<br />
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Britain is being left behind by its key trading partners according to Scottish economist Brian Ashcroft. Germany is a manufacturing power-house and so can balance its books by exporting goods it makes. Manufacturing only accounts for 12.8% of the UK's economy. That is a dire state of affairs and means there's no easy way of paying off spiralling govenment debt. Closing the gap in manufacturing would require more than a generation of capital investment. Capital is formed by companies saving money but with interest rates held at 0.5% there is no incentive for them to save.<br />
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There-in lies the UK's catch 22 - raising interest rates is not an option for Westminster as its debt now approaches £1 trillion and the UK's consumer debts are higher than the rest of the EU combined. If the people are already struggling and you land them with higher interest payments how will they be able to also pay for the government's increased interest payments through taxation? Some umbrella.<br />
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To continue borrowing the UK government must borrow against future North Sea oil revenues. If it can't then confidence in the UK economy will nose-dive and capital will flee. The fly in the ointment is the referendum on Scottish independence which is now certain after the SNP's landslide victory. Much of the commentary from the English print media suggests that the English would be glad to get the subsidy-junkie Scots off their backs. The London treasury knows the truth, though, and the issue of control over North Sea assets could not be more sensitive. The truth is that Scotland's North Sea resources are the UK's economic umbrella.<br />
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Nationalist self-imposed shoogly peg<br />
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Set against this economic reality it makes perfect sense for the SNP to prioritise securing more tax powers for Scotland's parliament in advance of the referendum. If parliament secures more economic powers - especially corporation tax - then full independence will become increasingly certain as the divergence of the Scottish and English economies gathers pace.<br />
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One potential pitfall for the referendum 'Yes' camp though is the thorny subject of currency. Scotland's Finance Minister John Swinney simply must face the issue of a Scottish currency head on. It is unfortunate and potentially damaging that the SNP are uncomfortable on the subject of advancing an independent Scottish currency as the monetary gods are currently smiling on Salmond.<br />
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With the UK's debts mounting, London's approach will be to continue inflating debt away by increasing the money supply. This will accelerate the devaluation of sterling. It matters less then if Scots keep more of their money if that money buys less and so fiscal autonomy is only part of the economic powers equation.<br />
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There is a real opportunity for the Nationalists to argue that a strong Scottish currency, backed by oil, would quickly rise in value against sterling (suddenly not backed by oil) meaning Scotland's share of the UK deficit will be much cheaper to pay off. The case for an independent Scottish currency can be won in the boardrooms and it simply must now be the subject of national debate.<br />
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With such a strong case to make there is no reason to risk the distrust of Scots who have shown they want to be levelled with. And the currency issue will be brought up again and again by Unionists who sense the SNP's unease on the subject. With everything going the SNP's way why would they throw a lifeline to the 'No' camp?<br />
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Hanging Scotland's Jacket<br />
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Our independence referendum will of course be about many issues and at core be about how secure Scots feel about themselves and their culture. Perhaps it is a weakness that the debate is reduced to "little more than a car boot sale haggling session" but the fact is that much of the debate will centre on the issue of economics.<br />
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The problem for Unionism is that its economic rhetoric no longer mesmerises as it once did and so the 'No' camp must quickly get with the internet programme. The 'Yes' camp on the other hand is ahead of the game and has the momentum in a nation which seems to no longer fear the word independence any more.<br />
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The only danger for the cause of an independent Scotland is whether or not the 'Aye' camp will feed Scotland's insecurities and try to sweep the issue of currency under the carpet. If the latter want Scots to take a leap in the dark with them then Scots will have to believe that they are being told it like it is.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com6tag:blogger.com,1999:blog-1694118162752568388.post-22462300356932371112011-06-13T19:21:00.002+02:002017-03-07T18:01:46.613+01:00Unionist expert backs Scottish independenceA piece I did during my tenure as Chief Editor of Newsnet Scotland. I will resumer publishing under the title <i><a href="http://www.scottishtimes.com/">Scottish Times</a></i> in due course.<br />
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Analysis by Alex Porter<br />
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A clown twisting a balloon into a dog grabs children's attention briefly and increasingly briefly each time the child sees the same trick. The political editor of Scotland on Sunday (SOS) Eddie Barns's anti-independence articles have a similar impact.<br />
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In last week's SOS Eddie ran the lead story "SNP expert says split will hit economy". It's only once you've finally made it to the end of his piece that you realise that said expert is not in fact an SNP expert and he didn't say anything about how a split [independence] would 'hit' the economy.<br />
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The expert in question is economist John Kay who is not an SNP member but is in the Government's Council of Economic Advisors - an august body whose members straddle Scotland's constitutional divide. Having led his readers to believe that Kay is an SNP insider, Barnes reaches the breathless conclusion that Kay's opinion "undermines a vital plank of the First Minister's quest to break Scotland away from the Union". All that in the first paragraph and a half and typifies the recent hysterical reaction from the Unionist press since the landslide SNP election victory a month ago.<br />
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Professor Kay did mention that full independence would bring with it "complications" as does any responsibility and Kay does say that an independent Scotland would be "limited by the realities of globalisation" as all independent nations are but he didn't say that an independent Scottish economy would be "hit" or suffer in any serious way at all.<br />
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Kay, visiting Professor of Economics at the London School of Economics, supports fiscal autonomy which means all of Scotland's taxes being raised and collected in Scotland. Arguing that full tax powers would benefit Scotland, Kay's opinion actually undermines the postion of all the Unionist parties, none of whom support fiscal autonomy. As fiscal autonomy is not on offer it would be more credible to interpret Professor Kay's view as showing that continued Union will hit the Scottish economy. Indeed, Professor Kay actually said that an independent Scotland is a "perfectly viable economic prospect". Last week's SOS could easily have led with "Unionist expert backs Scottish independence" as its headline.<br />
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Professor Kay's take is that Scotland would benefit from being part of a larger state within the Union so long as it controls and collects all its own taxes. This is a reasonable opinion which finds wide support in Scotland.<br />
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His analysis does however ignore the the massive monetary downside of Britain's skyrocketing national debt and the consequent devaluation of the pound. The realities of UK PLC are that there is no economic umbrella as the Coalition Government's policy of currency devaluation destroys savings and pensions - a backdoor tax or wage cut. Devaluation brings inflation as overseas products become more expensive meaning your family budget doesn't stretch nearly as far as it did last year.<br />
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Considered political journalists can get the economics of independence badly wrong too. On the same day across the M8 at the Sunday Herald Iain Macwhirter perpetuated the unionist myth about Scottish banks being bailed out at English tax-payers' expense. Iain still hasn't got his head round the fact that it was the bank's shareholders and bondholder, based mostly in the City of London, that were bailed out at the expense of all taxpayers including Scottish ones. There are numerous examples of governments bailing out their home-based companies and banks who lost money through foreign investments. Why would an independent Scotland bail out London-based investment houses, who did not do their due diligence and so made poor investment decisions, at all?<br />
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And given Iain's left credentials perhaps he can tell us why any of these banks should have been bailed out by the taxpayer at all - a point ably made last week by Professor Kay.<br />
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Macwhirter moves on to the subject of fiscal autonomy: "Fiscal autonomy is fine, but do you want control of taxes in order to cut them to promote enterprise, or raise them to meet ambitious social objectives? You can't do both."<br />
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The point of fiscal autonomy is indeed partly that - the policy privilege of exerting your own priorities. However another key point which is completely missed by Iain is that having those powers, in itself, would give Scotland a wage increase. So, you have more money before making your policy choices as a nation and there are plenty examples to demonstrate this. So with an increase in income you actually can "do both" or incentivise enterprise while maintaining social spending for example.<br />
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That, at least, is the position of one internationally renowned expert in Economics. Professor Andrew Hughes Hallet of St. Andrews and George Mason University in Virginia this week backed the ability of Scotland to improve its economic performance by using the "whole range of fiscal policies" independence would bring.<br />
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I'm pretty sure Hughes Hallet's independence endorsement will not be described by Eddie Barns as "supporting a vital plank of the First Minister's quest to argue the SNP's case for Scottish independence". Something tells me that's not in Eddie's box of tricks.<br />
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<a href="http://www.scottishtimes.com/">News Scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com8tag:blogger.com,1999:blog-1694118162752568388.post-58379066446979607202011-06-13T19:08:00.002+02:002017-03-07T18:02:34.421+01:00Apologies for being awayApologies to followers of my blog. I've been busy working with Newsnet Scotland. Now that the election is safely out of the way I hope to be able to update my site from time to time.<br />
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<a href="http://www.scottishtimes.com/">News Scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com2tag:blogger.com,1999:blog-1694118162752568388.post-20003438682172072422011-05-02T19:43:00.001+02:002017-03-07T18:06:59.643+01:00Not being independent is costing Scots jobs and prosperityA piece I did for during my tenure as Chief Editor of Newsnet Scotland. I will soon resume publishing under the title <a href="http://www.scottishtimes.com/">Scottish Times</a>.<br />
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by <span style="font-weight: bold;">Alex Porter</span><br />
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As the party leaders clashed last night during the latest TV debate, Iain Gray claimed Alex Salmond’s dream of an independent Scotland would cost every Scot £2600. With the election now reaching fever pitch and Labour well behind in the polls and facing the loss of some high profile MSPs, Mr Gray resorted to spreading fear and panic insisting that Scotland would be left with a £13.75 billion black hole in its finances if it became independent.<br />
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Before the 2007 election Labour warned that every Scot would face a £5000 tax bomb were the SNP to be elected and many were turned off voting for the party. The reality of the SNP government was that Scots had their Council Tax frozen which actually reduced stress on family budgets.<br />
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The most recently available official figures show that Scotland's national accounts run a surplus. Scotland's financial position in the financial year 2008-2009 was a budget surplus of £1.3 billion (GERS) while the rest of the UK has been running the highest deficits in its history.<br />
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The question the Scots electorate might be then be forgiven for asking is why their nation should be shackled to the UK economy and paying the price for massive deficits it doesn't contribute to. With UK government debt heading for the £1 trillion mark and with no sign of Westminster tax-take increasing in the drowning UK economy, Scots can look forward to years, if not decades, of increasing austerity cuts if we remain within the confines set for us by Westminster rule.<br />
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London-driven public sector cuts have been foisted upon Scots to pay for the failure of economic policies largely under Gordon Brown's Labour government and then continued by the current coalition. The result of this chronic economic mismanagement is the UK's financial, economic and currency crises which Scots have no option but to watch their cities, communities and families being dragged into.<br />
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Despite this corrosive economic environment at UK level, Scotland's national accounts have heroically remained in surplus and employment trends have bucked the depressing UK reality. This is testimony to the sound management of the SNP, and especially Finance Minister John Swinney, who has created enormous efficiency savings in the way government is run, particularly in the area of public sector procurement. It is regrettable that Scots cannot reap the rewards of these savings and instead continue to face a reduction in their parliament's block grant from London.<br />
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The harsh truth is that with the relative value of the pound collapsing and UK debt continuing to rise to unsustainable levels, Scots must consider their options and decide what powers their parliament needs most to protect their families, jobs and businesses.<br />
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North Sea oil is currently underwriting UK government borrowing. Without it the UK would be insolvent. With around 8% of the UK population, estimates put Scotland's contribution - through North Sea oil revenues from corporation tax alone - at 20% of the UK total. That figure disregards taxation raised at the pump.<br />
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In an independent Scotland that money would be reinvested in jobs and services. With the second-largest pension fund in the world, Norway, the richest country in the world according to the Legatum Property Index 2010, shows that rather than face a future of austerity Scots could, and perhaps should, be building a prosperous future for their children and grandchildren.<br />
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In poll after poll Scots have shown that they want their parliament to have more economic powers. In order to thwart that expressed desire the Unionist parties have designed, what they shamefully call, the Scotland Bill in order to give the impression that more powers are about to be returned to Scotland, but upon closer scrutiny we can discern that more powers will be re-reserved to Westminster.<br />
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Another cruel piece of rhetoric being disseminated by the Scotland's too wee, too poor and too stupid brigade is that an independence referendum would distract government from improving the economy. Firstly, it seems that the more attention the last Labour government and the current coalition government pays the economy the worse it seems to get. That aside, Scots are more than capable of having a national debate on independence while still going to work. If we can watch EastEnders and work, if we can read newspapers and still run a family budget and if we can follow the football while making sure the BBC licence is still paid then the Scottish government can bring forward the independence referendum that Scots want, while still managing to get on with improving the economy - something only the SNP government in recent years has been capable of doing in any case.<br />
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The truth is, though, that independence is about improving Scotland's economy. Without independence Scots, through their parliament in Edinburgh, do not have the collective powers to really put jobs and prosperity back on the national agenda. It is a daily economic crime that Scots are misled about the economic lifeboat of independence whilst the truth of what lies ahead for the UK Titanic is kept from sight.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com3tag:blogger.com,1999:blog-1694118162752568388.post-66973431099889512212011-02-27T13:09:00.001+01:002017-03-07T18:05:24.513+01:00Contraction underlines Scottish and UK economic divergenceA piece I did during my tenure as Chief Editor of Newsnet Scotland. I will soon resume publishing under the <a href="http://www.scottishtimes.com/"><i>Scottish Times</i></a> title.<br />
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Britian's GDP contracted by 0.6% in the last quarter of 2010 according to the Office of National Statistics (<a href="http://www.statistics.gov.uk/cci/nugget.asp?id=192">ONS</a>).<br />
<strong><br />Scotland UK comparison</strong><br />
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Although the same figures are not available specifically for Scotland, the UK numbers do nevertheless provide evidence of divergence between the Scottish and the UK economies. The contraction in UK numbers takes place against a backdrop of falling Scottish unemployment and rising employment.<br />
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Recently enterprise minster Jim Mather, comparing job market statistics, alluded to the divergence of the two economies saying: "For three consecutive monthly labour market statistics releases, we have seen falling unemployment and rising employment in Scotland compared to rising unemployment and falling employment across the UK. <br />
"Scotland's total employment rate is at its highest level since the three months to December 2009 - and Scotland has a higher employment rate and lower economic inactivity rate than the UK as a whole."<br /><br />This latest economic data serves to underline existing evidence which shows that the Scottish economy is in robust shape whilst the UK economy is in trouble. According to the most recent Government Expenditure and Revenues Scotland (GERS) report the Scottish economy was running a surplus as recently as 2008-2009.<br /><br />Having factored in interventions in the financial sector in 2008-2009, Scotland's financial position was a current budget surplus of £1.3 billion, or 0.9 per cent of GDP, including a geographical share of North Sea oil revenues. At the same time, the UK was in current budget deficit of £48.9 billion, or 3.4 per cent of GDP, including 100 per cent of North Sea revenues.<br /><br />Given that UK government borrowing has escalated, standing at £23.3 billion for the single month of November 2010, one would expect an economic contraction in Scotland leading to job losses. However the opposite is true.<br /><br />This is good news for SNP Enterprise Minister John Swinney as his party goes into the Holyrood elections. By being able to point to Scotland bucking the trend the SNP will impress upon the Scottish electorate that where their parliament has powers over the economy success ensues, and so more powers will mean more economic success.<br /><br /><strong>Low interest rates bitter-sweet</strong><br /><br />According to received wisdom the ONS negative growth figures will lend authority to those seeking to keep interest rates low. Low interest rates, we are often told, makes it easier for companies to borrow and so stimulate economic activity.<br /><br />However the reality is that although lending to main street banks from the Bank of England (base rate) is only 0.5%, the banks aren't lending to main street. Instead, it seems, they use the almost free money to buy and sell financial products to and from each other, triggering commission on each transaction and therefore bonuses.<br /><br />In the City of London this almost free money sloshing around gives the impression of buoyant underlying economic activity. The commissions and bonuses ulitimately derived from devaluing the pound have a ripple effect and so in the South-East there is a general sense that recovery is never far away. Devaluation is felt more severely outwith the South-East where increased prices are squeezing family budgets and an increasing number of homeowners now need to use credit cards to meet mortgage payments.<br /><br />Prices rise as a devalued pound means importers will have to pay more for products and components coming into the UK. These costs are passed on to the consumer creating price inflation.<br /><br />It is not clear what the economic benefits of devaluation are to the UK economy as a whole. Despite the pound losing value against key trading partners, unemployment is rising in the UK whereas it has never been lower in Germany.<br />
Currency devaluation does benefit exporters but as the UK is an importing economy the trade deficit widens and so the government receives less in taxation. Consequently to pay for public services the government must turn to borrowing on the markets in order to finance its increasing deficit. This in turn leads to the case being made for austerity cuts.<br /><br />Monetary policies which benefit the City leads necessitate austerity cuts. Yet those who use public services most tend not to be the City bankers or shareholders. Any benefits homeowners have from lower interest rates on mortgages are offset by higher prices and public sector cuts. Once interest rates do rise it will be clear to homeowners that their low mortgage payments were bitter-sweet.<br />
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<a href="http://www.scottishtimes.com/">scotland news</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com12tag:blogger.com,1999:blog-1694118162752568388.post-88047202880032114382011-02-27T13:06:00.001+01:002017-03-07T18:08:44.837+01:00Dollar hegemony takes another knockA piece I did during my tenure as Chief Editor of Newsnet Scotland. I will soon resume publishing with the title <a href="http://www.scottishtimes.com/">Scottish Times</a>.<br />
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by <span style="font-weight: bold;">Alex Porter</span>, Economy Editor<br />
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The Bank of India (BoI) is the first Indian bank to offer trade settlements between the rupee and the Chinese yuan (RMB) from Hong Kong. Hong Kong is the only offshore market for Chinese currency with $400 billion yuan being traded against other currencies in the past year. The news is the latest in a string of efforts by China to have the RMB accepted as an international currency and follows a campaign of persuasion by the China Banking Regulatory Commission.<br />
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Currently Indian buyers make payments in US dollars and so often have to convert their rupees into US dollars to effect transactions. This new facility being offered by the BoI lessens the need for Indian importers to keep the same volume of US dollar in reserve and use as an intermediary.<br />
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With world markets being flooded with dollars the rupee is considered by Chinese exporters as being more stable. That aside, if Indian importers want to procure low-cost goods then Chinese exporters have some leverage to have settlement in rupees.<br />
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The US will not be overjoyed by this development as having the dollar as a reserve currency means the dollar's value is supported by the need for foreign companies to have reserves to make international transactions. This structural demand helps offset the glut of supply and so prevents the value of the dollar falling more than it has in recent years.<br />
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Real-time financial settlements are now supported with the Bank of India having a RMB account with Bank of China with transactions extending to buyers and sellers in all of China's provinces.<br />
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Towards the end of last year Russia and China began trading directly in each other's currencies. Russia's currency, the ruble, is fully convertable in international exchanges. Although international investors believe that it would be in China's best interests to float the RMB, Beijing is cautious.<br />
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One key strength of the US dollar is that there is no obvious candidate for replacing it as the world's reserve currency. Until recently the markets were convinced that the euro would become an obvious candidate to become a rival however soveriegn debt problems across in Greece, Spain, Portugal and Italy have undermined confidence in the euro's future.<br />
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Many analysts believe that the Chinese would like to position the RMB as a successor reserve currency. Holding a large amount of US debt, the Chinese have been frustrated to see the value of their dollar investments become depreciated through quantative easing by the Federal Reserve.<br />
<a href="http://www.scottishtimes.com/">scotland news</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com15tag:blogger.com,1999:blog-1694118162752568388.post-86502103852833593342011-02-20T18:45:00.003+01:002011-02-20T18:53:56.073+01:00Niall Ferguson: USA could collapse. What about UK?In the video below Prof Niall Ferguson of Harvard University is explaining why the US could collapse under the weight of debt it has. The collapse he argues would be akin to the collapse of the Soviet Union which buckled under the weight of the Afghanistan war.<br /><br />Given that the UK has bought $250m of US debt. Some argue that this is a currency where the US and UK print new money and buy each other's debt to make themselves look solvent.<br /><br />All this raises the question that if the US could well collapse then isn't the UK in exactly the same postion? And if a Harvard professor is talking about the US becoming a failed state then why does the US have AAA ratings? Are the ratings agencies captured?<br /><br />All this is should say one things to Scots. Demand powers of your taxes and prepare for a new currency!<br /><br /><iframe title="YouTube video player" width="410" height="260" src="http://www.youtube.com/embed/d7Rvha2_KT8" frameborder="0" allowfullscreen></iframe>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com3tag:blogger.com,1999:blog-1694118162752568388.post-75862644728881128212011-02-16T22:38:00.001+01:002017-03-07T18:10:54.721+01:00Independence of Scots Law at risk from Scotland BillA piece I did during my tenure at Newsnet Scotland. I will soon resume publishing under the title <i><a href="http://www.scottishtimes.com/">Scottish Times</a></i>.<br />
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by <strong>Alex Porter</strong><br />
Scottish Lib Dem peer and former Depute First Minister of Scotland Jim Wallace has inserted an amendment in the Scotland Bill which will see criminal appeals from Scotland's High Court of Justiciary go to the UK Supreme Court. There are concerns that this little publicised aspect of the Scotland Bill will lead to a diminution of the powers of Holyrood, and is a threat to the identity and independence of the Scottish legal system.<br />
<strong>"Loss of identity"</strong><br />
Elish Angiolini QC, Scotland's Lord Advocate, has warned that Scots law will suffer a "loss of identity" because of the UK Supreme Court's extended powers to rule on Scottish human rights cases.<br />
Giving evidence to the Scottish Parliament's Scotland Bill Committee, Scotland's top law officer explained: "Because of the approach of the Supreme Court, there is a real danger that we will not just have harmonisation of our criminal law, procedure and evidence, through that process, but that there will be a complete loss of identity for Scots law unless it is something which is genuinely rarely exercised in the context of something which is of substantial constitutional significance across the United Kingdom, or where it is a very new piece of jurisprudence which is clearly ambiguous."<br />
Her comments follow the controversial decision taken by the Supreme Court in the Cadder v HMA case, which overruled a previous decision by the High Court of Justiciary in Edinburgh. The Supreme Court ruled that detention of suspects by the police without access to legal advice breached the European Convention on Human Rights (ECHR). The decision has had serious implications as a total of 867 cases have since been unable to proceed or continue as a direct result, according to a review on the impact of the case by the Crown Office and Procurator Fiscal Service (COPFS).<br />
Unclear on the scope of the Cadder appeal ruling, Angiolini has now sought the referral of five cases to the UK Supreme Court to achieve a "definitive resolution" on the matter.<br />
A spokesperson for the Crown Office said: "The judgment of the Supreme Court in Cadder v HMA has given rise to a number of collateral issues. It would be beneficial to achieve a definitive resolution and referring these cases to the Supreme Court is the most effective way of achieving that." The five cases are not expected to be heard until October.<br />
Fears are that Jim Wallace's (Baron Wallace of Tankerness) amendment will render Scots criminal law subservient to the UK Supreme Court in all matters.<br />
As Scotland's Advocate General, Wallace has had an amendment inserted into the Scotland Bill which removes the authority of Scots law in relation to criminal appeals. Part of the ammendment includes:<br />
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<em>"Remove acts of the Lord Advocate in her capacity as head of criminal prosecutions and investigation of deaths in Scotland that are incompatible with any rights conferred by the European Convention on Human Rights that are given effect to by the Human Rights Act 1998 (“Convention rights”) or Community law from the ambit of section 57(2) of the Scotland Act; and</em></div>
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<em>"Create a statutory right of appeal from the High Court of Justiciary sitting as a criminal appeal court to the Supreme Court in relation to matters where it is alleged that the Lord Advocate has acted incompatibly with any such Convention right or Community law to replace the existing devolution issue procedure that currently applies in such cases. The jurisdiction of the Supreme Court should be maintained both for reasons of constitutional propriety and, more importantly, to ensure that fundamental rights enshrined in international obligations are secured in a consistent manner for all those who claim their protection in the United Kingdom."</em></div>
The idea of transferring the statutory rights of appeal from the Scottish High Court of Justiciary to the UK Supreme Court is supported by the Scottish Human Rights Commission (SHRC) in criminal cases where it is alleged that the Lord Advocate has acted in breach of the European Convention on Human Rights.<br />
Giving evidence to the Scotland Bill Committee earlier this month, Professor Sir David Edward (University of Edinburgh), a former European Court of Justice judge who recently produced a report on this area of legal jurisdiction, said: “It is perhaps significant that in their submissions to us the Scottish Government, the justice directorate, the Scottish Law Commission and, indeed, the Lord Advocate all said that the Supreme Court's jurisdiction should be totally brought to an end. Our view was that there was a case for giving the Supreme Court some jurisdiction, but not in the form in which it had previously existed.”<br />
SNP Justice Secretary Kenny MacAskill told Newsnet Scotland that his view is that Scottish courts should be the ultimate decision-making authority in every aspect of criminal law.<br />
The telling question amid this whole process is why won’t Jim Wallace, a Liberal Democrat peer, consider the option of allowing all these powers to be held entirely by Scottish courts where ultimately the judges are Scottish instead of solely considering further centralisation?<br />
<strong>Liberal Democrats: promises, assurances and bearing gifts</strong><br />
These latest revelations give further credence to the argument that the Scotland Bill, which was supposed to further devolve powers to Scotland, is in reality a Westminster Trojan horse designed to take powers back.<br />
Experts have told Newsnet Scotland that some of the new powers being devolved will almost certainly be used such as Scottish Duty Land Tax (SDLT), landfill tax and the ability to borrow but these powers are insignificant compared to the far more substantial taxes such as Corporation Tax, national insurance or VAT.<br />
Ostensibly there are a significant transfer of income tax powers but Newsnet Scotland is advised that because of the way the Bill has been crafted there is an inbuilt cost-disincentive to using this tax. A number of renowned experts such as economists Jim and Margaret Cuthbert and Professors Andrew Hughes-Hallett and Drew Scott of George Mason and Edinburgh universities, among others, argue that the income tax powers are "dangerously flawed", "unworkable" and "a perfect storm".<br />
Observers will be forgiven for concluding that the income tax powers have been designed this way on order to give the impression of more powers being transferred. This strategy would have the effect of partly placating the Scottish electorate's desire for their parliament to have full tax powers whilst actually taking powers away from Scotland. The aim, critics will speculate, is to achieve confidence whilst picking Scotland's pockets of existing devolved powers - a 'confidence trick' or 'con'.<br />
The role of Jim Wallace - now a member of the unelected House of Lords - in the Scotland Bill process indicates a trend, according to some commentators, of how Liberal Democrat politicians readily abandon their liberal principles of decentralisation and federalism upon catching a whiff of power.<br />
The debate over the value of a Lib Dem promise has taken another twist in relation to the Scotland Bill as news unfolds that powers have been dropped or at best delayed from the Calman proposals, including air passenger duty, aggregates levy and the assignation of income tax yield from savings and distributions. This completely contradicts promises and assurances from the Lib Dem leadership.<br />
In addition, some powers already held by the Scottish Parliament in areas such as insolvency law, charity law and the regulation of the health professions may actually be taken back by Westminster.<br />
In May last year Liberal Democrat MP Alistair Carmichael, now depute chief whip to the House of Commons said: "Calman's recommendations will be implemented and many other Scottish issues on which Labour has prevaricated will now be tackled."<br />
Current Secretary of State for Scotland Michael Moore (Lib Dems) promised that the proposals recommended by the Calman Commission would be "implemented in full."<br />
Leader of the Lib Dems' Holyrood group Tavish Scott offered assurances that the proposals of the Calman Commission would be implemented in full insisting: "Absolutely ... no doubt".<br />
Given that the Scotland Bill radically affects the nation one would expect the Lib Dems to seek a referendum on the new devolution settlement. No such vote is being planned by the ConDem coalition government although they are holding a referendum on a new voting system that no-one wants.<br />
As for the Bill itself, there will be a number of hearings at Westminster today. Professor Hughes-Hallett, who believes that the Bill is "dangerously flawed", will be amongst those giving evidence.<br />
In Scotland's media much has been written about the problems associated with the powers included within the Bill, but the unwritten story is about the powers that have been dropped or re-reserved.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com6tag:blogger.com,1999:blog-1694118162752568388.post-64804499730537252242011-02-16T10:36:00.002+01:002017-03-07T18:12:57.011+01:00Poll shows SNP heading for second termA piece I did during my tenure at <span style="font-style: italic;">Newsnet Scotland. </span><span style="font-style: italic;">I will resume publishing under the title<i><a href="http://www.scottishtimes.com/"> Scottish Times</a></i>.</span><br />
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by <span style="font-weight: bold;">Alex Porter</span><br />
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An opinion poll by IPSOS Mori today shows that Alex Salmond's SNP Government is poised to form a second term after this year's elections to Scotland's Holyrood parliament.<br />
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The poll of 1,000 people was taken between the 10th and 13th of February and shows that the SNP has now closed the 10 point gap with Labour, recorded as recently as November 2010 by the same polling company. In this latest poll, the SNP has overtaken their principal Holyrood rival which records 37% of the popular vote for the SNP government compared to Labour's 36%. <br />
In the light of this latest opinion poll, Scottish political commentators, many of whom have recently forecast certain victory for Labour at the forthcoming Scottish elections, will now be dramatically revising their predictions.<br /><br />The poll shows that on the regional vote the SNP leads by an even larger margin over Iain Gray's party, recording 35% to Labour's 33%.<br /><br />Worryingly for Labour this reversal in their party's electoral fortunes is likely to be largely attributable to political leadership - the Scottish electorate's familiarity with First Minister Alex Salmond - as well as their identification with his performance as Scotland's foremost political representative.<br /><br />Last weekend signs emerged that the Holyrood Labour group were struggling to demonstate unity with reports suggesting senior figures within the Labour shadow cabinet were critical of Iain Gray's leadership. Gray, according to party sources, is easily led by "immature" influences within his team.<br /><br />The Nationalists, who formed a government for the first time in their history in 2007, will be eager to present themselves as having been a competent administration. In this context SNP strategists will want to present the party as even more popular than they were when they won office four years ago.<br /><br />This latest analysis boosts the SNP's re-election prospects as polling on both the constituency and regional votes show the SNP being four points up on the party's election winning performance in 2007.<br />
Commenting on the poll described on the Times front page as "Salmond surges into Holyrood poll lead", SNP Depute Leader and Scotland's Deputy First Minister Nicola Sturgeon said:<br />
"Today's poll shows there is all to play for in Scotland's election this May. With the SNP moving ahead of Labour and achieving a poll rating four points higher than the election results of 2007.<br />
"As voters look toward Scotland's election in May it is the SNP's strong record in office, our team of recognised and trusted ministers and MSPs, and the vision we have for Scotland's future that is winning the support of voters who want to re-elect a Scottish Government that is working for Scotland.<br />
"In the last week the SNP has delivered on jobs with 25,000 apprenticeships, protected public services with a balanced budget, funded the fourth year of a council tax freeze saving the average household £322, and put in place the money to abolish prescription charges from April this year.<br />
"And it is the SNP that is on the same side as people across Scotland in opposing rising fuel prices with our demand for a fuel stabiliser and the scrapping of the Tories duty rise.<br />
"Over the next 80 days as we head toward's Scotland's election, the SNP will continue to govern for Scotland, to build Scotland's economy, protect our public services, and to stand on our record of delivery and vision for Scotland's future."<br />
News of the SNP's lead in popular opinion will perturb Labour strategists who will now surely question Labour's negative strategy as the May 5th election approaches.<br />
<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com3tag:blogger.com,1999:blog-1694118162752568388.post-26541395747491585782011-02-14T19:02:00.003+01:002017-03-07T18:14:06.005+01:00Labour civil war ahead of Holyrood electionA piece I did during my tenure at the former title Newsnet Scotland. I will resume publishing under the title <a href="http://www.scottishtimes.com/">Scottish Times</a>.<br />
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by <span style="font-weight: bold;">Alex Porter</span><br />
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Weekend reports claim that the Labour party in Scotland face internal divisions that could derail the party's goal of replacing the SNP as the Scottish government, just weeks before the Holyrood election campaign begins in earnest. <br />
Over the weekend the Times newspaper reported that serious divisions have emerged inside the Labour shadow cabinet over Iain Gray's decision to vote against the SNP government's budget despite Finance Secretary John Swinney agreeing to Labour's demands. The internal criticism is aimed at Gray and his "failing to take control", reports the Times.<br />
The reports suggest that senior voices inside Mr Gray's Holyrood group have criticised how the leader "allowed himself to be led by immature voices within the shadow cabinet".<br /><br />One Labour MSP is quoted as saying: “What we should have done, given that we got most of what we wanted, was to say that while the budget was still imperfect, we would vote for it and be seen to put the national interest before the party interest …<br /><br />“… That would have been the mature thing to do. Iain was not driving the ‘No’ vote. Instead he allowed himself to be led by immature voices in the shadow cabinet – he let it run.”<br /><br />The news will be seized on by the SNP who will now seek to exploit Labour's divisions. The party's Campaign Director Angus Robertson said: “The revelations show Iain Gray was led on the Budget vote and that he isn’t even capable of leading his own group of MSPs, never mind Scotland.<br /><br />“It just proves that they were offered all they wanted – and more – and put puerile political opposition before the national interest.<br /><br />“It is obvious many of his MSPs are unhappy and have startlingly resorted to making known their unhappiness with Iain Gray’s leadership."<br />
<strong>Labour's manifesto uncosted</strong><br />
In another dramatic twist over the weekend it emerged that the Labour party's draft manifesto is uncosted and must undergo a comprehensive re-write a matter of weeks before the Holyrood election.<br /><br />In an article in the New Statesman journalist Dan Hodges revealed that key Labour election pledges have not been costed:<br /><br /><a href="http://www.newstatesman.com/blogs/dan-hodges/2011/02/party-labour-miliband-shadow">http://www.newstatesman.com/blogs/dan-hodges/2011/02/party-labour-miliband-shadow</a><br />
“Labour's Scottish election campaign has also suffered an additional setback after the manifesto was produced without costings, and has had to undergo a comprehensive re-write …"<br />
<strong>Iain Gray's leadership</strong><br />
The revelations indicate that there are problems of organisation inside Labour's Holyrood team which, as the election approaches, are fraying nerves and causing bitter divisions between leading members of the party.<br /><br />At the root of the matter is Iain Gray's leadership qualities. Iain Gray has kept a very low profile since it emerged that Labour at UK level did all they could to facilitate the release of the Lockerbie bomber, whilst at the same time the Scottish arm was orchestrating a campaign to shame the SNP for the Libyan's release on compassionate grounds.<br /><br />As the election campaign heats up Gray must convince the Scottish electorate that he, not Alex Salmond, is the man to lead Scotland. With his own senior MSPs describing him as being led by an "immature minority" within the party, convincing the electorate of his ability to excel as Scotland's First Minister will now be a much tougher prospect.<br />
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<a href="http://www.scottishtimes.com/">news Scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com7tag:blogger.com,1999:blog-1694118162752568388.post-54458310331308169372011-02-11T23:28:00.006+01:002017-03-07T18:16:52.975+01:00Scots want economic independence - but how badly?A piece I did during my tenure of Newsnet Scotland. I will resume publishing under the title <i><a href="http://www.scottishtimes.com/">Scottish Times</a></i>.<br />
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<span style="font-weight: bold;">By thwarting the voters' widespread desire for their parliament to have full powers over taxation via the mechanism of the Scotland Bill the Labour, Lib Dem and Conservative parties have become an austerity alliance</span><br />
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by <span style="font-weight: bold;">Alex Porter</span>, Economy Editor<br />
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With the Holyrood election campaign imminent none of the horse traders would have seriously risked bringing down the Scottish budget and opprobrium on their parties' heads. It was a forgone conclusion that Labour's chronic oppositionalism would see it vote against any SNP budget and the smaller parties would have to fall into line to make passing the budget arithmetically possible. With the Scottish budget adeptly ushered through by Finance Secretary John Swinney we can now turn to the political elephant in Scotland's economic room - Westminster austerity cuts and Scotland's determination to stop them.<br />
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<strong>Scotland in post-austerity Britain</strong><br /><br />Two news items in the last week have given a glimpse into the future in Britain PLC post-austerity.<br /><br />Covered here (removed) by Newsnet Scotland, the first examined the shocking news that North Ayrshire council is considering implementing a plan which would introduce a four-day school week for its childen at both primary and seconday schools. Public spending is being decimated to pay for the UK's spiralling budgets deficits and so a way of life, taken for granted since the introduction of the welfare state, is at stake. The social implications of this kind of policy are profound and threaten Scotland's status as a first-world nation.<br /><br />The second item hitting the headlines is the revelation that Glasgow University could be insolvent by this time next year. According to Principle Anton Muscatelli the university, established in 1451, could run out of money in academic year 2012-13. The university has sounded the alarm and has drawn up plans to end or merge a number of courses to help make £20 million in savings over the next three years.<br /><br />An indication of the financial dire straits in which the university finds itself is that the plans include the controversial merging of the history, archaeology and classics departments as well as the axing of several modern language courses. Such extreme cuts will undermine the international prestige of the university and Scotland's rankings in the world of academia. For a nation which was once the preeminent academic hub of the world during the period of the Scottish Enlightenment and whose academic innovations include the professorial system itself, it is unthinkable that one of its ancient universities should not have an independent anthropology department.<br /><br />Given the parlous state of the UK economy and the public sector cuts planned by the ConDem government in London, it is critical that those facing consequent redundancy and unemployment in Scotland can have access to educational courses. However the university is considering cutting its evening and weekend classes which are currently subscribed to by 5000 adult learners a year. The social dimension is further affected as vital courses in nursing and social work face a cull, and additionally the university's renowned Centre for Drugs Misuse Research faces the axe.<br /><br />Scotland's Unionist opposition parties will, as politicians do, try to blame the SNP government for the cuts, but the reality which has to be faced is that the cuts are being forced on the Scottish government by Westminster. London is cutting Scotland's block grant by a total of £1.3bn in 2011-12 (that's less than the previous year), a figure which is not even adjusted for inflation.<br /><br />The SNP finance minister has saved Scotland a lot of money through creating efficiencies in the public sector, especially in the area of procurement, but a £1.3bn (around £1.7bn when inflation adjusted) hole is more than difficult to fill. Council services and employees, universities and others will invariably take a hit.<br /><br /><strong>Powers not cuts</strong><br /><br />However amidst the negotiations and horse trading over Scotland's diminishing budget, we risk losing sight of the salient issue. The cuts are not necessary. Scotland's national accounts (GERS) show a surplus, so the £1.3bn question is - why the cuts?<br /><br />Alex Salmond's party will argue that with Full Fiscal Autonomy (FFA) none of these cuts would be happening. The fiscal surplus which Scotland currently enjoys could, the Government argues, be spent on increasing - not cutting - public expenditure. Westminster's cuts are about paying for the UK's deficit, a deficit which is generated south of Hadrian's Wall. With FFA Scotland would not be have to be held accountable for its neighbour's debts.<br /><br />The Unionist parties have anticipated these calls for FFA and have preempted them by drawing up the Scotland Bill proposals. The Scotland Bill will give and take some powers from/to the Scottish parliament but these powers are not significant and experts believe that they are "unworkable" and "dangerously flawed". Polls show a clear majority (57%) of Scots favour their Parliament having full tax powers, but the Scotland Bill falls far short of that desire.<br /><br />Critics claim the Scotland Bill does "not go nearly far enough" and is badly crafted because it is merely a device for channelling the Scottish electorate's desire for significant change into a constitutional cul-de-sac. Unlike FFA the Bill does nothing to protect Scots from Westminster's cuts agenda and so the three Unionist parties, by designing the flawed Bill then colluding to usher it in, leave themselves open to being castigated as an austerity alliance.<br /><br />The critics make a good point. The SNP will argue at the election that Scotland needs economic independence. It has a compelling case and there is clear public backing for it, but is it deliverable?<br /><br />The truth is that even if the SNP are given a second term by voters there is nothing it can do to gain more powers for the Scottish parliament. The Scottish parliament can not add or subtract from its own powers. Control over the Scottish parliament's powers is retained by Westminster. The nationalists tend to do better at Holyrood elections than Westminster elections and so as long as the Unionist parties constitute a majority of Scotland's MPs in Westminster there is nothing the Scottish people can do to have such democratic demands met.<br /><br />If popular desire is to be satiated then a popular campaign to demand more powers would have to be launched. The problem though is that the subject is rather a dry one. It is difficult to imagine masses of demonstrators on Princes Street in Edinburgh chanting, "What do we want? Full Fiscal Autonomy. When do we want it? Within the current financial year."<br /><br />Campaigners would need a seductive slogan that could act as a focus and mobilise the public to put pressure on the Unionist alliance currently blocking such significant reforms. Swingeing cuts resulting in such profound social changes as the proposed four-day school week do offer siclike opportunities. Fiscal Autonomistas could point out that economic independence would protect Scotland from the very clear and present dangers which London's austerity programme hold for Scotland. Many struggles throughout history have been won and lost premised upon the popular appeal of a slogan. "Make love not War" heavily influenced public perceptions during the Vietnam war because it was and still is evocative and appealing on many levels. "Powers not Cuts" or "Autonomy not Austerity" don't really cook the same goose.<br /><br />Paradoxically Salmond's team faces the situation whereby pointing out the limited powers the Scottish parliament has to effect change in the economy actually depresses voters, who feel then feel that their parliament and by extension the SNP government are impotent.<br /><br />It would be something of a relief for the SNP then if such a popular movement arose. In that respect there is much sound economic thinking currently being done behind the scenes by organisations such as Reform Scotland and the Campaign for Fiscal Autonomy but these are ill-suited to the purposes of a Scotland-wide grassroots campaign movement. The brain power is already in place so it requires only an umbrella organisation to set the heather alight. With austerity looming such an organisation would find allies the length and breadth of Scotland and from boardroom to livingroom.<br /><br />The situation whereby Scots go to the polls wanting full economic powers but vote for the Unionist parties who seek to block these powers indicates that one of those Jedi Knight mind-tricks are in play. Indeed, it brings to mind the Monty Python crucifiction scene whereby one of the Christians who are in line to be crucified briefly interrupts reality when he tells the Roman he's taking the freedom option. He's actually taken seriously for a moment and is going to be set free before revealing that he was pulling the Roman's leg. The moral of the story is that servitude is all in the mind.<br />
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<br />With the Unionist parties ignoring the public mood over the subject of economic independence, the moment for a new movement dedicated to the Scottish parliament having its own treasury has arrived.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com4tag:blogger.com,1999:blog-1694118162752568388.post-70013884184916015222011-02-11T23:25:00.001+01:002017-03-07T18:18:00.227+01:00Scottish economy suffers as UK trade deficit escalatesA piece I did during my tenure at Newsnet Scotland. I will resume publishing with <a href="http://www.scottishtimes.com/">Scottish Times</a>.<br />
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by <span style="font-weight: bold;">Alex Porter</span>, Economy Editor<br />
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The UK's trade deficit, which stood at £8.5bn in November 2010, rose to £9.2bn in December according to the Office for National Statistics (ONS).<br />
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In light of the latest figures all talk of an "export-led recovery" in the UK economy will now be viewed with extreme scepticism. The latest monthly deficit in goods compares to a surplus in services which includes the 'resurgent' banking sector and which stood at £4.4bn to the good.<br />
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The banking surplus is not surprising given how much free money the Bank of England is injecting into the private banks. This almost free cash is used by the banks to buy and sell financial products from and to each other and each transaction is then calculated as earnings which then triggers banker bonus payments.<br />
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The policy of the former Labour government and the current ConDems of transferring taxpayers money to support the banking sector is having a deleterious effect on the UK economy. When the trade deficit is subtracted from the balance of payments surplus there is an overall deficit of £4.8bn for the single month of December 2010. This is the worst monthly deficit in the last 5 years.<br />
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Compared to key trading partners the UK has a relatively small manufacting and exporting sector. The Bank of England's policy of printing new money and giving it to the banks (quantative easing) decreases the value of the pound. This does help make exports more competitive but as the UK is an importing economy importers must pay more for the goods which come into Britain, and so the trade deficit escalates. On top of that the increased costs incurred by UK importers are then passed on to the UK consumer resulting in increased prices on main street, othweise known as inflation.<br />
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Increasing trade losses means there is less and less tax take for the UK treasury which consequently has to borrow money to balance its budgets. Given that the UK government is undergoing a crisis in its public finances this kind of news is very unwelcome. In November government borrowing reached a record £23.3bn and today's trade figures means that even that staggering figure will likely be surpassed.<br />
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With the UK economy falling off a cliff, Scotland is being told to cut its cloth. This is despite the fact that Scotland is running a surplus in its national accounts. That surplus goes to help plug the hole in the UK's finances whilst a further £1.3bn is being shaved from the Scottish budget to fill the same hole.<br />
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As has been evident in the last week these cuts are beginning to bite. North Ayrshire council have proposed a plan to implement a four-day school week for primary and secondary schools and Glasgow University could be insolvent by next year according to its Principle Anton Muscatelli. These are the first signs of just how deep Westminster's austerity cuts are going to be.<br />
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With the Holyrood elections looming Scots will want to know how their jobs and family budgets can be protected from the consequences of the UK's economic crises.<br />
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Full Fiscal Autonomy would mean Scotland's surplus would stay in Scotland and if there's a deficit south of the border then it's not for Scots to be held to account for the debts of others. This is the policy of the SNP, however as long as Westminster controls the powers the Scottish parliament has over taxation it is for Scots voters to pressurise the Unionist parties into withdrawing their support for the Scotland Bill. This ill-conceived Bill leaves Scots exposed to the worst effects of the crisis in the UK's public finances. The Unionist parties must give backing to fiscal autonomy, which is supported by a majority of the Scottish electorate along with eminent economists and business leaders.<br />
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Two forces of the economic weather system are about to collide. The high pressure of the UK austerity programme is about to meet the low pressure of the Holyrood election campaign. Voters are in an extreme state of anxiety over jobs and services and the party which does not convince the Scottish electorate of its economic competence will find itself tossed out of the consequent tornado on May 5.<br />
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<a href="http://www.www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com0tag:blogger.com,1999:blog-1694118162752568388.post-65563457409292997912011-02-09T20:28:00.003+01:002011-02-09T20:37:05.408+01:00Is The Guardian paving the way for war in Iran?When the Weakileaks files first hit the headlines in Britain it was through their partners The Guardian.<br /><br />It seemed that the first published documents painted a very critical picture of the Iranian government. Now it seems that The Guardian did not publish information which threw light on Iranian opposition parties that it had hitherto portrayed as lovers of democracy and freedom.<br /><br />Now it seems Wikileaks and The Guardian have fallen out and threats of legal action abound:<br /><br /><iframe title="YouTube video player" width="360" height="260" src="http://www.youtube.com/embed/XFlW2gFGufk" frameborder="0" allowfullscreen></iframe>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com4tag:blogger.com,1999:blog-1694118162752568388.post-45746456244227481362011-02-08T22:54:00.005+01:002017-03-07T18:20:14.642+01:00Labour should apologise over Lockerbie hypocrisyNow that Labour are exposed as having cynically exploited the Lockerbie bombing for political advantage there are some questions which have to be answered. That done the victims, the Scottish government, the Scottish parliament, the Scottish people and beyond now deserver an <span style="font-weight: bold;">apology</span> for this repugnant hypocrisy.<br />
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Labour had pressurised for the release of Megrahi whilst at the same time trying to heap shame on the Scottish government for his release. How utterly despicable.<br />
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Below are just a small number of questions that now need answering. And then we need an apology.<br />
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by <span style="font-weight: bold;">Joan McAlpine</span><br />
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<span style="font-weight: bold;">Questions for Scottish Labour hypocrites over Megrahi</span><br />
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Now that all the evidence is out in the open. Here are some questons for the hapless Iain Gray and his adolescent Justice Mnister, Richard Baker.<br />
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When did you discover that your Labour colleagues in London were plotting to have Megrahi released? <br />
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When? <br />
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Was it before or after you started your attacks on the SNP government policy? <br />
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Why did you continue to attack the SNP, knowing that your own colleagues plotted Megrahi's release? <br />
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Will you now condemn Gordon Brown and his Ministers who plotted to have Megrahi released? <br />
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Why not and what does that say about you - Iain Gray - as a 'leader'? <br />
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What's it like being a patsy, used by the big boys in London?<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com4tag:blogger.com,1999:blog-1694118162752568388.post-57602528660053889862011-02-08T00:41:00.004+01:002017-03-07T18:22:34.534+01:00Labour reeling: last ditch smear attempt fails as Megrahi files finally vindicate SNP<span style="font-style: italic;">Revelations by </span>Newsnet Scotland<span style="font-style: italic;"> piles pressure on Labour to apologise for cynical exploitation of Lockerbie bombing for political gain:</span><br />
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A last ditch attempt at smearing the Scottish government on the Megrahi issue has failed spectacularly after official documents exonerated the SNP’s handling of the affair and revealed the previous UK Labour government did “all it could” to facilitate the release of Al Megrahi. <br />
A report by top Whitehall Civil Servant Sir Gus O'Donnell has vindicated claims made by the SNP over its handling of the issue and revealed that, far from not interfering in the process, the Labour party did "all it could" to help facilitate the release of the man known as the Lockerbie bomber.<br />
The report follows the recent publication of secret files by controversial website Wikileaks that showed Labour Ministers had advised the Libyans only one week after Megrahi’s illness had been diagnosed. The Scottish government has also published documents detailing the communications it had with senior Labour party Ministers.<br />
US relative Stephanie Bernstein, who lost her husband in the downing of Pan Am 103 said: "It's disgusting, absolutely appalling. It looks as if the Labour government were acting as attorneys for the Libyans."<br />
Frank Duggan, the Washington-based lawyer who is representing US families, said the politicians' behaviour had been "disgusting". Mr Duggan criticised Kenny MacAskill for releasing Al Megrahi but said his conduct had not been as bad as the Labour government representatives.<br />
Mr Duggan added that “...they [the SNP] were not as bad as the British diplomats and officials who claimed to have no part in this decision but are now shown to be advisers to the Libyans one year before the actual release of the murderer. It is disgusting but not unanticipated."<br />
The report also makes clear that the Scottish government were not influenced by the then UK Labour government’s desire to free Megrahi and that there was no evidence to suggest BP business interests played any part in the decision to release him on compassionate grounds.<br />
Responding to Sir Gus’ report a Scottish government spokesperson said:<br />“The Scottish Government has consistently made clear that the Cabinet Secretary for Justice's decision to grant Mr AI-Megrahi compassionate release was taken following due process and following the precepts of Scots justice, without regard to foreign policy, commercial or any other considerations. The findings bear out the consistency of the Scottish Government's position in all respects.”<br />
The spokesperson added:<br />“The review also confirms that, in contrast, the UK Government's position on the negotiation of a prisoner transfer agreement with Libya was influenced by commercial considerations, including lobbying by BP. What has not previously been public knowledge is that commercial and other considerations led, in late 2008, to a change in the UK Government's policy to favour the release of Mr AI Megrahi although they attempted to conceal that policy from the Scottish government.”<br />
The fresh revelations pose serious questions for Labour politicians in Scotland who have, from day one, mounted a vociferous campaign against the SNP over the compassionate release of Mr Megrahi.<br />
On 21 August 2009 Labour’s Holyrood leader Iain Gray said: "If I was First Minister, Megrahi would not be going back to Libya. The decision to release him is wrong. He was convicted of the worst terrorist atrocity in our history."<br />
In a speech to Holyrood on 2 September 2009 Mr Gray said: “It is now almost two weeks since the Justice Secretary took his decision to release Mr Al Megrahi and return him to Libya. I said then that I believed that was the wrong decision and nothing we have heard in the past fortnight or this morning has convinced me otherwise.”<br />
In December last year Labour’s Justice spokesman Richard Baker said: "As I said at the time, the decision to release Megrahi was wrong. He is the worst murderer in Scottish history.”<br />
Commenting on the new revelations, Mr Baker insisted that there had been no hypocrisy on the part of the Labour party over their attacks on the Scottish government. However Mr Baker may well have caused problems for himself and his party by repeating on Radio Scotland discredited newspaper smears that the Scottish Government were trying to gain more powers by agreeing to release Megrahi under the PTA.<br />
<strong>Smear attempt</strong>These smears surfaced at the weekend after an English Sunday newspaper ‘The Mail on Sunday’ carried an article claiming Alex Salmond had sought a deal over the secret PTA agreement originally hatched by Tony Blair. The catalyst for the claims was an article in the <a href="http://www.vanityfair.com/politics/features/2011/01/libya-201101?currentPage=1">Vanity Fair </a>magazine.<br />
The ‘story’ suggested that the Scottish government had offered a deal on the PTA in return for help with compensation claims expected from prisoners forced to ‘slop out’ in Scottish prisons. The smear also made it onto the pages of two Scottish newspapers.<br />
However it has emerged that the story was based on an internal email sent by former senior Labour party official John McTernan to two Labour colleagues, Mark Davies and Tom Greatrex. In the email Mr McTernan mentions a ‘deal’ and refers to Scottish Ministers having the final say on prisoners. The email, dated 09th November 2007, refers to a meeting between Jack Straw and Kenny MacAskill.<br />
Newsnet Scotland can reveal that the ‘deal’ mentioned by McTernan was a demand by the Scottish government that Al Megrahi NOT be included in the PTA. Far from wanting to strike a deal that would have let a fit and healthy Al Megrahi return to Libya (as Labour wished), the SNP were opposed to such a move and wanted Megrahi removed from the PTA altogether. Something that Labour’s Foreign Minister Jack Straw originally agreed to but would later backtrack on.<br />
Newsnet Scotland has also learned that less than one week before, Jack Straw privately revealed that the Libyans had no expectation of Megrahi’s release. Newsnet Scotland can also reveal that, when asked if Alex Salmond had in fact suggested the deal alleged by the newspaper articles, Straw would neither confirm nor deny it, saying: “My conversations with Alex Salmond were private.”<br />
Mr Salmond’s spokesman Kevin Pringle has since described the claim of any deal with Labour to release Megrahi on a PTA as “complete and utter garbage without a shred or scintilla of truth.”<br />
The article in Vanity Fair was authored by David Rose and contains some glaring errors. In the article Rose claims that a report on Megrahi’s cancer by one Dr. Karol Sikora , dated July 30 2009, was taken into account by Kenny MacAskill. In fact Dr. Sikora’s report played no part in Kenny Macaskill’s deliberations on Megrahi’s application for compassionate release.<br />
Commenting on the newspaper claims a Scottish government spokesman said:<br />“This story is simply wrong, just as the previous - and different - version by the same author in Vanity Fair was also wrong. Anyone who knows anything about the issue knows it to be a total misunderstanding.<br />
“The issue in 2007 was not about release of al Megrahi but the technical issue of whether to exclude al Megrahi from the face of the Prisoner Transfer Agreement - as the Scottish Government demanded - and the UK Government seeking to renege on their commitment to do so on the basis that the issue was academic as they would publicly say that Scottish Ministers had a veto over any such transfer.<br />
“The UK Government seemed to think they could achieve this by attempting to link it to other issues under discussion at that time. However, our concern was that even if we exercised the veto and rejected prisoner transfer for al Megrahi, we could be subject to judicial review in the absence of a specific exclusion.<br />
“Therefore, and as the record shows clearly and consistently, the Scottish Government maintained our opposition to the PTA itself and to al Megrahi’s non-exclusion from it, and criticised his non-exclusion in extensive correspondence in 2007 and 2008 with Jack Straw and the Prime Minister, from both the Justice Secretary and the First Minister.<br />
“We made it clear in every single piece of correspondence and meeting that Scottish Ministers would judge the issue on the precepts of Scots Law and not on any other considerations."<br />
To have a clearer understanding of the origins of this latest failed attempt at targeting the SNP over Megrahi we need take a look at the background of the three people involved in the email.<br />
The sender, John McTernan, was advisor to Tony Blair when the secret ‘Deal in the Desert’ was struck. McTernan (seen in the video below) claimed last year that the PTA agreement, hatched between Blair and Gadaffi, had nothing to do with oil deals and was in fact a “reward” to the Libyan leader after Libya dismantled its WMD programme. (Content removed)"<br />
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The main email recipient Mark Davies was special adviser to Jack Straw from 2005 to 2010, crucial years as far as the ‘Deal in the Desert’ is concerned. The second recipient, Tom Greatrex, is now Labour MP for Rutherglen and Hamilton West and was a former advisor to ex Secretary of State for Scotland Jim Murphy.<br />
Last year Mr Greatrex was named by The Sun newspaper as the source of another smear after a leak compromised the Queen’s security. The ‘Balmoral Paths’ smear was intended to be used to attack the SNP, and indeed Labour MSPs at Holyrood demanded the resignation of SNP MSP Roseanna Cunningham when the story broke in The Daily Record, however things went quiet when The Sun named Mr Greatrex as the leak source.<br />
<strong>Hypocrisy</strong>These latest Megrahi disclosures are hugely embarrassing for Labour at a time when the party is seeking to install Iain Gray as Scotland’s next First Minister. Many will question why he allowed the party to politicise such a sensitive issue, repeatedly making comments that would ultimately prove to be at odds with the actions of his own leadership.<br />
The events are certain to have damaged the Holyrood Labour leader and come barely a month after he made insulting ‘ethnic cleansing’ remarks about Montenegro that caused a diplomatic row.<br />
Mr Gray now faces accusations that he was either completely ignorant of what his London leaders were up to and has been made to look foolish or he was in fact aware of Labour’s ‘double dealing’ and is guilty of a serious lack of judgement and quite staggering hypocrisy. The latest comments from his Justice Spokesman Richard Baker suggest that Mr Gray is guilty of the latter.<br />
This poetic justice for Labour must surely bring their shameful politicising of this incident to a close and will hopefully cause reflection on the part of very many Scottish journalists and BBC Scotland correspondents who caused outrage by acting as chearleaders against their own Scottish government and whose own reputations hang a little limp today.<br />
There still remains though the small matter of possible injustice and the questions that surround the safety of the conviction of Mr Abdelbaset Al Megrahi.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com3tag:blogger.com,1999:blog-1694118162752568388.post-16083579701682438822011-02-07T20:02:00.006+01:002011-02-07T20:15:08.358+01:00Lockerbie, Megrahi and Labour Hypocrisy - The Truth comes outThe story of how Britain wanted Al Megrahi freed is going round the world. In Scotland, the BBC is still trying to make the Scottish population believe it's all down to the SNP government. Labour have used the Lockerbie bombing to try and undermine the SNP government accusing it of embarrassing Scotland and calling for resignations. All along they were lobbying for his release which shows the people just what kind of organisation they are.<br /><br />The best take on the story I've read is by Joan McAlpine and I've reproduced her piece here for my blog frequenters:<br /><br /><br />by <strong>Joan McAlpine</strong>, <a href="http://joanmcalpine.typepad.com/">Go Lassie Go</a><br /><br />All the documents relating to Megrahi's release were made public today. As expected they vindicate the Scottish government and are highly embarrassing for Scottish Labour which continued to publicly oppose the release 2009 while they knew their ministers in London supported release and had done for a year. (Will Iain Gray and Richard Baker now admit defeat?)<br /><br />However the new papers also show that the ludicrous American suggestion that the UK government successfully put pressure on Scotland simply is not supported by the facts. In the new papers the cabinet secretary Gus O'Donnell says "Moreover it is clear that Her Majesty's Government (HMG) considered that any attempts to pressurise or lobby the Scottish government could be counterproductive to achieving this outcome." eg Megrahi's release. <p>This weekend saw another red herring in the Mail on Sunday - based on a false Vanity Fair piece and picked up by Guido. Paragraph 14 of the cabinet office document and subsequent letters between Jack Straw and Des Browne discuss a UK government "understanding" that Kenny MacAskill was prepared to discuss the terms of the Prisoner Transfer Agreement in 2007 in return for certain concessions on compensation for prisoners taking slopping out cases and devolution of firearms law. This was their “misunderstanding”, no doubt based on wishful thinking – they were desperate to conclude a PTA, in terms acceptable to Libya. The SNP wanted a specific exclusion of Megrahi from the deal (a position they maintained). So there was no deal or trade off. The UK Government reneged on seeking such an exclusion because Libyans wouldn’t accept it (or they wouldn’t progress energy/BP deal) In 2007, the issue was not about his release – it was about his non-release. Remember Megrahi did not have cancer at that point, the PTA was the only discussion and it was rejected by Scotlan. So all the UK speculation about what MacAskill might want was just that - speculation.<br /><br />The Scottish government rejected the dodgy Prisoner Transfer Agreement cooked by Tony Blair in return for oil deals. In 2008 the UK govenrment was firmly in favour of release. But how much more evidence do we need of Labour hypocrisy? All the <a href="http://www.scotland.gov.uk/Topics/Justice/legal/lockerbie">Scottish Government documents can be viewed here</a>. The Scottish govenrment's detailed response to today's new information is <a href="http://joanmcalpine.typepad.com/joan_mcalpine/scottish-government-response-to-release-of-uk-megrahi-documents.html">here</a>. But the most damning assessment of Labour's role comes from the Cabinet Secretary Gus O'Donnell whose assessment I will reprint in full:<br /><br /><strong>SIR GUS O’DONNELL’S CONCLUSIONS</strong><br /><br />i. none of the materials that I have reviewed contradicts anything in the then Foreign Secretary‟s statement to the House Of Commons (12 October 2009) or the current Foreign Secretary‟s letter to Senator Kerry (23 July 2010), or statements made by the former Prime Minister on this matter;<br /><br />ii. it is evident from the paperwork, including in documentation already released, that the Libyans made explicit links between progress on UK commercial interests in Libya and removal of any clause in the PTA whose effect would be to exclude Mr Megrahi from the PTA. It is also evident, including in documentation already released, that BP did lobby the former Government to make them aware that failure to agree the PTA could have an impact on UK commercial interests, including Libyan ratification of the BP exploratory agreement (EPSA) signed in May 2007. As is already in the public domain, these commercial considerations played a part in the former UK Government‟s decision to reverse its position and agree to the removal of this exclusion clause. And once the exclusion clause had been removed from the draft PTA, the former UK Government in turn held up final signature until progress on commercial deals had been achieved. The records show that Cabinet Office and FCO Ministers and officials were mindful of, and pressed Libyan interlocutors for progress on, the major BP deal (alongside other UK deals) in the context of agreeing the PTA. But:<br /><br />a) while the PTA provided a framework to consider the transfer of prisoners, it did not permit transfer when an appeal was outstanding and, critically, in line with every other PTA, provided no automatic right to<br /><br />transfer;<br /><br />b) any decision on an application for transfer of Mr Megrahi under the PTA was for Scottish Ministers alone to make. Scottish Ministers retained an absolute veto over any request for prisoner transfer in the case of Mr Megrahi, a veto they used in August 2009 by rejecting his application for<br /><br />transfer;<br /><br />c) the PTA did not in any case form the basis for the release of Mr Megrahi; 14<br /><br />d) there is no evidence that pressure was placed on the Scottish Government by BP for the transfer or release of Mr Megrahi (either under the Prisoner Transfer Agreement or on compassionate grounds);<br /><br />e) there is nothing in the paperwork to indicate any pertinent contacts between BP and HMG after February 2008;<br /><br />f) the Libyans were not told there were linkages between BP‟s exploratory agreement and the transfer or release of Mr Megrahi (either under the Prisoner Transfer Agreement or on compassionate grounds).<br /><br />iii. it is clear from the paperwork that at all times the former Government was clear that any decision on Mr Megrahi‟s release or transfer under a PTA was one for the Scottish Government alone to take. The documentation considered by the review demonstrates that they were clear on this in their internal deliberations and, crucially, in their contacts and exchanges with the Libyans, including at the highest levels, and with the Scottish Government. In Gordon Brown‟s only meeting with Colonel Qadhafi, on 10 July 2009, he made clear that the decision was solely a matter for Scottish Ministers and HMG could not interfere.<br /><br />iv. nonetheless, once Mr Megrahi had been diagnosed with terminal cancer in September 2008, HMG policy was based upon an assessment that UK interests would be damaged if Mr Megrahi were to die in a UK jail. The development of this view was prompted, following Mr Megrahi‟s diagnosis of terminal illness, by the extremely high priority attached to Mr Megrahi‟s return by the Libyans who had made clear that they would regard his death in Scottish custody as a death sentence and by actual and implicit threats made of severe ramifications for UK interests if Mr Megrahi were to die in prison in Scotland. The policy was primarily motivated by a desire to build on previous success in normalising relations with Libya and to safeguard the substantial gains made in recent years, and specifically to avoid harm to UK nationals, to British commercial interests and to cooperation on security issues. The desire to see such a result developed and intensified over time as Mr Megrahi‟s health declined and the imminence of his death appeared greater; 15<br /><br />v. Policy was therefore progressively developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi‟s transfer under the PTA or release on compassionate grounds as the best outcome for managing the risks faced by the UK. This action amounted to: proceeding with ratification of the PTA; explaining to Libya in factual terms the process for application for transfer under a PTA or for compassionate release; and informing the Scottish Government that there was no legal barrier to transfer under the PTA;<br /><br />vi. I have not seen any evidence that HMG pressured or lobbied the Scottish Government for the transfer or release of Mr Megrahi (either under the PTA or on compassionate grounds). Jack Straw stated clearly in his calls with Alex Salmond including on 13 and 24 October 2008 and his meeting on 28 April 2009 that this was a matter for the Scottish Government. Indeed, throughout this period, the former Government took great effort not to communicate to the Scottish Government its underlying desire to see Mr Megrahi released before he died. Moreover, it is clear that HMG considered that any attempts to pressurise or lobby the Scottish Government could be counter productive to achieving this outcome. Although it is likely that the Scottish Government was aware of this desire, there is no record that it was communicated or that UK interests played a part in Mr Megrahi‟s release by the Scottish Government on compassionate grounds. When the matter came to the then Prime Minister in August 2009, he did not seek to exercise any influence on the First Minister or the Scottish Government. Mr Megrahi‟s release on compassionate grounds was a decision that Scottish Ministers alone could – and did – make</p><p><br /></p><p>This entry was first published on<a href="http://joanmcalpine.typepad.com/"> Go Lassie Go</a></p><p><br /></p><p><a href="http://www,newsnetscotland.com/">news scotland</a><br /></p>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com2tag:blogger.com,1999:blog-1694118162752568388.post-18835690507225302042011-02-07T13:52:00.003+01:002017-03-07T18:24:06.513+01:00UK economic crises threaten Scotland's status as a developed nationA piece I did during my tenure at <span style="font-style: italic;">Newsnet Scotland. </span><span style="font-style: italic;">I will resume publishing with the title <a href="http://www.scottishtimes.com/"><i>Scottish Times</i></a>.</span><br />
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by <span style="font-weight: bold;">Alex Porter</span>, Economy Editor<br />
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If you wondered just how bad Westminster's austerity cuts are going to be, news that the Labour-run council of North Ayrshire is bringing forward proposals for a four-day school week in all primary and secondary schools is a not-so-subtle hint. <br />
This is not another ambush by the Labour party to manufacture a story and blame it all on the SNP government, this is the first real sign of what's to come. Austerity cuts are not going to squeeze public services, they're going to crush them. This proposal by North Ayrshire council will likely be dropped as it is shocking in its implications and public opinion is not yet accustomed to such traumatic events. However siclike stories will soon become less shocking as they increase in frequency.<br />
The real significance of this announcement is that it demonstrates how the bankruptcy of the UK state is now threatening Scotland's status as a developed nation.<br /><br /><strong>Crisis in the community</strong><br /><br />Shocking though it is, this plan for a cut in the school week will only save £2.3m, however the council has a target of saving £38m by 2014. A raft of other cuts are being explored by the council in their “strategic options” document.<br /><br />Not surprisingly reaction has been one of deep concern. Paul Arkison of the GMB Scotland trade union said of the four-day week plan: “The mere thought of this proposal shows you the sad state of affairs this council is in. Parts of North Ayrshire have some of the highest levels of unemployment and the worst areas of deprivation in Scotland. To put school children on a four-day week could threaten their educational development and would cause chaos for working parents.<br /><br />Perhaps it is a sign of the nationalists' paranoia about an ambush that SNP MSP Kenny Gibson commented:<br /><br />“I am astonished that Labour-controlled North Ayrshire Council is considering a reduction in the school working week from five to four days.<br /><br />"The law makes it clear that pupils should have a minimum of 190 days a year in school. A four-day week would mean a 47.5 week year, something I doubt would be welcomed by parents, teachers or pupils. Educationally I can see no merit in this proposal which appears to be finance driven.”<br /><br />While perhaps Mr Gibson could point to council mismanagement it is perhaps unfair to lay the blame solely at the Labour council's door.<br /><br />The cuts come from the UK government in London and are indicative of more to come. With huge cuts expected over the coming years Britain could easily be looking at the privatisation of council services, the introduction of road tolls and cuts in police numbers just as crime rises due to an acute increase in financial hardship.<br /><br />It would not be wise then for the SNP government to get drawn into bickering with councils when clearly the the core of the problem is the UK's economic crises.<br /><br /><strong>UK crises and preparations for another another City bailout</strong><br /><br />In 2008 the financial crisis saw the UK's financial sector become insolvent. It should have been put into administration and a new financial architecture established. This would have meant the banks' shareholders and bondholders would have lost their money. Instead Gordon Brown bailed them out by transferring the debts to the taxpayer. In conjunction with this policy the Labour government colluded with the Bank of England to print new money (quantative easing) and lend it almost free to banks.<br /><br />The result was that a colossal amount of debt owed by the financial sectors were hung round the neck of Joe Public. So far the public has witnessed a huge increase in unemployment and now inflation, but the true price of the banks' bail out has yet to be revealed. The debt is enormous - many times GDP - and will be getting paid off by generations of taxpayers not yet born. Gordon Brown's legacy is not just economic collapse but an immoral tax on generations who will pay for his bribing of the financial sector long after his insane economic policies are swept under the carpet by a grateful financial establishment.<br /><br />More astonishing though is that despite large amounts of private debt being transferred to the taxpayer, the financial sector is still irretrievably insolvent.<br /><br />Yes, they are posting profits but that's because they are buying and selling products from and to each other using bailout money and freshly printed new cash from Mervyn King. The reason this isn't picked up by auditors is that the accountancy rules were relaxed by Gordon Brown so that the banks could hide their losses and not go under. He wasn't going to go down as the chancellor who destroyed the UK's financial sector. Not Prudence. The effect is that bankers can announce profits and so justify big fat bonuses. And then you'll be warned that if we don't let them have bonuses they'll leave. Yes, if we don't stop them robbing us blind they'll walk off and rob someone else blind. How will we cope?<br /><br />Why doesn't the UK's political class deal with the situation? Simple. What brains do exist in London do not reside in the skulls of politicians but financiers. The political parties are mere bankers' puppets. And they've got the media pretty much tied up too. That's why they can transfer taxpayers' wealth to themselves with impunity. On top of that they believe their own hype so much they actually believe the population would suffer without them.<br /><br />They are not going to take criticism. If a politician speaks out, 'city analysts' will howl about their economic policies and get into bed with the Labour opposition. And as we saw under Brown, Labour would not bat an eyelid over bankrupting the UK state and mortgaging your grandchildren's future to get elected.<br /><br />What is even more mind-boggling is that after selling the population into debt-bondage the financial sector is still broke. The reason austerity cuts are being rolled out is because they are looking to save money up for the next round of bailouts. And David Cameron is currently engaged in ensuring that the taxpayer is properly tenderised for the bankers' banquet.<br /><br />If, in the middle of the night, you went to your livingroom and happened upon a burglar you'd be entitled to be a tad enraged. With the taxpayer now saddled with generations of other people's debts the public are jusifiably angry.<br /><br />Cameron's response is that he is not interested in "headlines satisfying people today and tomorrow that I've given the banks a good kick in the pants. Can we do more on bonuses, particularly on those banks we own? Yes we can, and yes we will," he told The Sunday Telegraph. "But look, we've just been talking about growth. I don't believe actually in the long run, you can deliver the enterprise-growth agenda while having a running war with the British banking industry at the same time."<br /><br />Eh? David might have went to the same public school as these merchant bankers but the fact is that children in Scotland are looking at a four-day school week. This happens nowhere in the developed world. These banksters extract the public's money and then use it to buy the politicians that they shmooze around City clubs with.<br /><br />Keeping the financial sector at the public trough is now sinking HMS UK PLC. According to the Office of National Statistic (ONS) government borrowing for the single month of November was a record £22.77bn. And there is absolutely no sign at all that this borrowing will not continue to increase as austerity diminishes the governments tax receipts. Yes, the idea of austerity is to cut costs but unemployed public servants don't pay tax, pay less VAT and require benefits..<br /><br />A general bombardment of economic propaganda means numbers are difficult to put into perspective. That weill-kent Unionist business leader, Iain McMillan of the CBI, complains that the SNP governments' National Conversation has cost the taxpayer £1m. On the subject of the impact that UK government debt will have on the Scottish economy he is strangely silent. <br /><br />Every day the interest payments alone on UK government borrowing are £119.3m. This is estimated to rise to £182m a day in 2015-16. Total debt (except those being kept off the balance-sheet) is around £1 trillion. That amount of money would pay for the Scottish bloc grant thirty times over and more.<br /><br /><strong>Swallow the UK deficit or go for a Scottish solution?</strong><br /><br />Officially Scotland is in surplus but here we are facing the kind of cuts to public services which are experienced nowhere in the developed world. This is because the powers over taxation in Scotland are not controlled by Scotland's own parliament but reserved to Westminster. Scotland consequently has to take austerity cuts and so subsidise those south of the border where the deficit is generated.<br /><br />This fact will not be altered by the Scotland Bill. The Scotland Bill will see a transfer of powers to and from the Scottish parliament but these new powers will be minimal as the process is mere tinkering, and bad tinkering at that.<br /><br />The Scotland Bill is supported by Scotland's Unionist opposition parties. Aside from the limitation of the Bill's scope it is widely believed to be poorly thought out. Internationally renowned academics, economists and business people have characterised it as "dangerously flawed", "unworkable" and "a perfect storm".<br /><br />Although it is Westminster legislation the Scottish parliament's Scotland Bill Committee is helping to craft the Bill. The Committee is chaired by disgraced former leader of Labour's Holyrood group Wendy Alexander who had to quit her post amidst corruption allegations.<br /><br />Ms Alexander's chairing of the committee has seen the Scottish parliament's dignity suffer as eminent academics have been "ambushed" in committee hearings which were meant to deliberate the Scotland Bill but which was used by committee members to attack the SNP government.<br /><br />Scotland's other option is Full Fiscal Autonomy (FFA) which would defend Scotland from the UK deficit crisis. Without assuming full tax powers the Scottish parliament will be impotent to prevent councils like North Ayrshire needing to effect policies such as a four-day school week. Alarming though it is this is exactly the kind of example FFA campaigners need to point to if they are to get a dry tax argument over to the Scottish electorate.<br /><br />FFA is widely supported by academics and the business community and the Scottish population are largely behind the idea of their parliament having more tax powers. Only by generating momentum for the idea will force the Unionist parties into removing their ideological and parliamentary block to the process of increasing significant tax powers for the Scottish parliament.<br /><br />The North Ayrshire plan should then bring the debate over economic independence to the fore. A crisis to Scotland's social structure is looming and the electorate has to have the facts from both sides of the argument so that they can instruct their political servants on how to act in their best interests.<br /><br />Before the Holyrood elections there will be more signs of just how painful the impending austerity culls will be. With so many Scots now worried about jobs and family budgets, the issue of Scotland's economic choices of the Scotland Bill or economic independence must take centre-stage. Scotland has to make a decision. Making the wrong one could have profound implications for our international status as a developed country.<br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com3tag:blogger.com,1999:blog-1694118162752568388.post-11939186088242251702011-01-30T23:40:00.003+01:002017-03-07T18:25:45.666+01:00Scottish economy a Swinney success as UK enters stagflationA piece I did during my tenure at Newsnet Scotland. I will resume publishing under the title <i><a href="http://www.scottishtimes.com/">Scottish Times</a></i>.<br />
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The good news in Scotland is that the economy grew by 0.5% in the third quarter of last year but the bad news is that in the fourth quarter of 2010 the UK economy contracted 0.5%, according to the Office of National Statistic (ONS).<br />
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Economic growth right now may be a blessed relief for Scottish job-seekers and businesses although the bitter-sweet reality is that Scotland must face cuts to its block grant from Westminster in order to pay for the UK's spiralling budget deficits.<br />
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<span style="font-weight: bold;">UK crises deepen</span><br />
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If you are in the habit, as most are, of swallowing the mainstream media's economic analysis whole then you will now know that the UK economy has gone into a "shock reverse". Apparently "analysts" had predicted modest growth and told us that the UK was experiencing a fragile recovery. Suddenly "analysts" are telling us that the UK economy is already showing symptoms of stagflation. This is when prices rise but growth contracts.<br />
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A shock turn of events? No.<br />
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Readers of Newsnet Scotland will note that this outlet was never on-message and the 'recovery' meme was never pumped out for mass consumption and distraction here. Indeed two years ago when the "green shoots of recovery" baloney was being disseminated as if it were one of the ten commandments this observer warned elsewhere that "analysts" were smoking those green shoots.<br />
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Just to recap. In 2008 the financial crisis happened because of the implosion of the rapid expansion of a fraudulent market in financial products called derivatives. This market was valued globally at around £500 trillion. To put this in context, global GDP at the time was around £50 trillion. Not everyone understands money on this scale so think of it this way: imagine you earn £1 per year and from that you have to pay taxes, pay the rent, eat and pay your bank charges. At the end of the year you have managed to save 5p (well done, most are already using behind on credit card payments). Then someone tells you that you suddenly have £10 debt to pay. How long will it take if you can save 5p every year to pay off that £10 debt? 200 years and that's excluding interest. That's the situation the world is in.<br />
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Now draw a deep breath because the worst is yet to come - Britain was the epicentre of the derivatives market. The City packaged and sold the majority of them around the world. Hence the "global crisis".<br />
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To put it another way, the UK financial sector is dead. They are being allowed to hide those losses so that they are not forced into liquidation. Meanwhile the government is borrowing like a drunken sailor and the Bank of England is printing money like confetti to keep the banks on a life-support machine.<br />
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Keeping the City on life-support means the UK economy is being squeezed and the pips are starting to squeak. Printing money, for a short while, feels like economic growth but it's debt and illusory economic performance. The outcome is devaluation and so we now have the situation where sterling is nose-diving and products are becoming more expensive. Inflation is nearing (officially) 5% while at the same time the economy is contracting - this is the definition of stagflation.<br />
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The citizen of Britain PLC has money which is rapidly losing value as the UK government gets out the epson money printing machine and goes to town. That's really dangerous not to mention worrying if you're a pensioner or low paid. That's life in the UK; banking buddies of the political class in London get socialist state hand-outs to the tune of trillions of pounds while the poor get the capitalist medicine - pull your socks up.<br />
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If it were all that easy it would simply make you livid. However the real problem is that all this money the government is borrowing to keep the banks going has to be paid for. In the single month of November 2010 UK borrowing reached a record £23.3 billion and the trend line is upward. Government tax receipt showed a small recovery last year but that is clearly dependent on the government pumping more money into the economy.<br />
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What's so worrying is that as tax revenues are not recovering owing to economic growth then how is the UK supposed to be able to keep paying back the money it's borrowing - and with interest? The point of bankruptcy has been reached. UK PLC is printing money to pay its debts. It may only be a matter of time before those who own long terms UK debt realise that they will be repaid in devalued currency and dump their UK bonds before everyone else does. That means currency collapse and capital flight ala Argentina circa 1999.<br />
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What about all the indicators and stories of recovery? Ok, think about it. All the borrowed/printed money is going to the City. Where are the "analysts" based? All the borrowed/printed money is going to the financial sector. Who do "analysts" work for? And why is it that when the government borrows money which then enters the economy and is spent then that money is not subtracted from GDP figures? You know, the figures which show "growth". And why are the unemployment figures massaged for that matter?<br />
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I'm sorry to have to tell you this but the mainstream media is pumping you full of propaganda.<br />
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Now, I doubt very much that the Scottish growth figures can be trusted because UK government borrowing is not subtracted, but official figures do show that fiscally the Scottish economy shows a surplus while the UK deficit is now completely out of control. Make no mistake, borrowing is premised on growth projections so that the principle can be repaid with interest. That's why the government does all it can to protect the population from the truth. Money printing and devaluation makes the economy look like it's growing on paper but that's nominal growth not real growth. Real growth was probably last achieved in the UK in 1976. Ever since then Britain has used the credit card to party on and they had future oil revenues so the credit card company were happy to extend credit, but that's all over now boys and girls.<br />
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There are calls for the Osborne to do a U-turn on economic policy but let's be clear 'austerity' has not started yet. The problems being experienced now are caused because of the banks. Yes, the wars and the missile systems are exorbitantly expensive but the reason the economy is going down the tubes is because of the bail outs and debt.<br />
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Opposition and trade-unions will argue for stimulus which means add to the debt meaning more of the problem cures the problem. You can't cure an drug addict or a ideologue by giving them more of what they want. Stimulus suits the financial sector and that's why it was and still is current economic policy. Stimulus sounds good but don't forget it's debt and keep in mind that Britain PLC is printing money to pay its debts.<br />
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Mervyn King (BoE) is warning of 5% inflation. The key mandate of the Bank of England is to keep inflation below 2% so why are interest rates not rising? Believe me, there's more inflation coming. You can't print money without prices rising eventually. Commodity prices around the world are surging. Prices like sugar and silver are skyrocketing and these type of commodites go into everything you consume such as chocolate bars and mobile phones. There's a time lag before rising commodity prices hit the main street but it's starting.<br />
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Inflation figures can be massaged too, but let's say the official rate goes up to 6% by spring. "Analysts" will start to panic about inflation rising very quickly. Interest rates will then be used to reduce the supply of money in the economy to bring down prices. Now with public and private debt at 449% of GDP and with the government already printing to pay debts how are interest payments going to be met?<br />
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In Scotland around 5% of the population, or 207,500 people, according to Shelter Scotland, are already using credit cards to pay their mortgages. So what happens if mortgage interest rates spike by say only 2%? I prefer not to imagine it.<br />
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Ugly stereotypes will be peddled from the London media as the UK government seeks to blame the economic malaise on subsidy junkies up North, the EU, the Welsh, the immigrants and yes, the poor will be blamed for being lazy. All this already happens so just imagine the magnification of those images in the dishonourable dash for political cover. Expect a rise of extreme right activities.<br />
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<span style="font-weight: bold;">Scottish economic debate</span><br />
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As I said, the good news is that Scotland has an economic surplus in its accounts. It really is remarkable how Scotland has managed to remain in robust economic shape during the crisis and that is testimony to the sound economic management of the SNP government in Holyrood.<br />
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Our national parliament has few of the powers needed to effect real economic change but those which it does have are being handled more than capably by Alex Salmond and John Swinney - credit where it's due.<br />
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Large corporate businesses, and the parties they donate and lobby heavily to, have a dispropotionate influence over how economic news is reported. What the mainstream media seldom tells you is that the health of the private economy is essentially down to small businesses. Many more people work for small companies than large corporates and so the small business relief policy has been an SNP economic master-stroke. It is the probably the single most important reason that Scotland remains in surplus.<br />
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In order to help small companies compete with giant retailers the SNP introduced into its budget a levy on the the big out-of-town supermarkets. The move was well received by Scotland largest business organisation the Federation of Small Business. Today, it was voted down by the Unionist opposition parties which perhaps is a reflection of where supermarket polical donations will be going in the run-up to the Holyrood elections.<br />
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The Nationalists have also, after a suspension lasting a generation, undertaken council house construction projects and the Scottish construction sector is now contributing to Scotland's economic growth.<br />
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Crucial to protecting families and communities has been the SNP's freezing of council tax payments. This has saved family budgets from being plundered and so with a little more to spend in the shops small retailers have been thrown a lifeline to support them in times of UK crises. To prevent council services from being cut the party has achieved public sector efficiency savings especially by making public sector procurement more efficient. This is, for me, one of their most impressive achievements in government demonstrating ministerial capability and sound management.<br />
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<span style="font-weight: bold;">Austerity</span><br />
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I mentioned above that the current parlous state of the UK economy is not related to austerity. That is not to say I think austerity will help. Indeed, I believe it will cause further economic decline.<br />
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Throwing hundreds of thousands of public sector workers on the dole and slashing benefit payments is the wrong way to deal with a problem caused by the financial sector - especially wealthy finance houses. Look no further to the collapse of the Irish government to see where this policy will take us. With the private economy contracting how will the burden of the austerity cuts be borne? Now, you can argue that cutting down the public sector is a good idea and that's a valid poltical viewpoint to hold under normal circumstances. However cutting public sector jobs and services at the same time as a private sector contraction is the economics of the madhouse.<br />
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Laid off public sector workers will have to be paid benefits. Many struggling to pay their mortgages will experience repossession. And with salaries gone and benefits cut there'll be less money going into the shops, already suffering from a VAT hike, and so there'll be a further drop in retail sector jobs. And do not public sector workers pay taxes? You might deduct their salary from the cost of running government departments but you must at the same time calculate the hit on the Treasury in terms of the consequent income tax revenue and VAT receipt losses.<br />
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<span style="font-weight: bold;">Holyrood Elections</span><br />
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With the Holyrood elections looming, the UK sovereign debt, currency and financial crises will be the central theme of the campaign.<br />
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In the red corner will be disgraced former leader Wendy Alexander priming Labour spokespersons on the benefits of the Scotland Bill. Internationally renowned economists and academics have characterised the Scotland Bill as "fatally flawed", "unworkable" and "a perfect storm".<br />
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Adding to the opprobrium being heaped on the Scotland Bill this week saw the Institute of Chartered Accountants of Scotland (ICAS) claiming that the tax changes proposed by the Scotland Bill could mean a “disproportionate” amount being spent on collection and a backlash from workers who consider them unfair. The institute calculates that anomalies in the system could see an epidemic of evasion costing the Scottish taxpayer £150 million. The Scotland Bill is widely perceived as a Unionist project designed by opposition parties to prevent significant new economic powers being transferred to the Scottish parliament.<br />
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Economic independence, as espoused by the SNP, is very popular with the Scottish electorate. The Scottish Social Attitudes Survey 2010 showed that 57% of Scots would like their parliament given full control over Scottish taxes and 62% full control over benefit payments.<br />
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Economic indepependence would see Scotland fiscally protected from the dire UK economic situation and is supported by a large number of business leaders, economists and academics. Such shelter would be welcome news for Scottish families, businesses and institutions such as the university sector all of whom must now plan for Westminster austerity cuts.<br />
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Alex Salmond's cabinet has shown itself to be very competent and many commentators who are not aligned to the SNP will tell you that, albeit privately. Despite the SNP minority government facing a hostile and often feverishly anti-independence media the party has survived its first term with dignity and kudos. Many in Scottish civic society have praised its professionalism and commitment to the nation.<br />
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Salmond and his advisors must then point not simply to their economic successes but to get re-elected they must compare the healthy state of the Scottish economy with the UK's crises. Yes the Nationalists really only benefit from upbeat messages, but if they must be sparing in their criticism then negative criticism must be spared to point out that the UK's deficit was caused by the Labour party. That will give them the opportunity to ask the electorate to think twice about believing that Labour can be believed to solve a problem that Labour themselves caused.<br />
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For Gray, economics is not his strong point and to win control of Holyrood he must defeat a popular and charismatic sitting First Minister who is a former economist. Gray's strategy then must be to avoid the subject when possible and when he must simplify his message and use Labour's ubiquitous influence over the mainstream media to focus all the blame for the UK's economic crises on the ConDem coalition.<br />
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As far as the electorate is concerned the next electoral term is not about getting elected but keeping a roof over the head and food on the table.<br />
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Scots will have to decide whether they believe that the size and prestige of the British economy and currency is going to help their family survive and prosper over the next few years or whether they they should opt to have their own parliament take the important decisions over the Scottish economy.<br />
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The propaganda is thick when it comes to politics and economics and so deciding how to vote will be a difficult decision to make. In times of crises people tend to be conservative but when you are on a sinking ship and you see a lifeboat, radical and decisive action is widely believed to be an appropriate response.<br />
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<a href="http://www.scottishtimes.com/">News Scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com35tag:blogger.com,1999:blog-1694118162752568388.post-87717790867082094422011-01-30T15:45:00.004+01:002017-03-07T18:26:43.347+01:00Egyptians versus IsraelIt goes on. The demonstrations in Egypt are about deposing the Mubarak regime. The people are waiting and waiting for Mubarak to go. A stalemate has been reached. Clearly, the US is trying to manage the situation in order to suit the interests of Israel.<br />
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The swearing in of Vice President Omar Suleiman by President Mubarak represents the Whitehouse desire. He is trusted by the Israelis whose network are said to control the US Congress and the bulk of the US political system through Zionist lobbying organisations and political campaign funding. Israel has a kind of bouncer role in its role in the middle-east which provides cheap oil to the US. Dollar hegemony is the issue as the middle-east sells oil to the rest of the world and that business is done in dollars which is the single most important factor in holding up the value of the dollar as the Federal Reserve and Obama continue to flood the world with dollars. You want to buy oil, you need to buy dollars first..<br />
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Israel wants an obedient regime. Clearly though, the interests of Israel/US are not those of the protesters. Stories about how the US is behind the protesters are merely attempts to position themselves to benefit from any outcome.<br />
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This is why the stalemate goes on and why intimidation and violence is likely to continue. Hundreds are now dead as the authorities have released prisoners from jails. Criminal gangs are now looting and committing act of violence. Police are said to be among the looters, organising and encouraging them. Communications have been cut and as I write airforce jets are flying low over the capital. In neighbourhoods water has been cut. State TV are showing scenes which do not reflect the true nature of the demonstrations. Al Jazeera have had their accreditation withdrawn but they are still filming live. Watch here: <span id="search" style="visibility: visible;"></span>http://english.aljazeera.net/watch_now/<br />
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These Egyptians are brave. They, again, are defying another curfew.<br />
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It is becoming clear that they are not going to settle for a new regime which reflects the interests of the US and Israel. They have waited decades and now is their time.<br />
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I therefore fear the worst. I imagine there will be some pretext for a brutal clamp down. Perhaps the crowds will be sprayed with chemicals designed to passify the demonstrators but the demonstrators seem stubborn. I hope I am wrong but the US and Israel will not permit a situation whereby Egyptians will have an opportunity to decide their own destiny as that could lead to an outcome which doesn't suit their interests in the region.<br />
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My take is to ignore all calls from the US when it calls for democratic reforms. That is not what they want. They want a puppet regime controlled by themselves. And repressive regimes are usually the very kind of states the US prefers as they are easier to control and it keeps they keep populations poor and so oil cheap. All you've got to do is look after the dictator and make him rich.<br />
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So, we wait. However, my view is that all sorts of plans are taking place to quell the protestors. It seems that the longer the US put things on pause the more likely violence will be the only way for either side to succeed.<br />
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<a href="http://www.scottishtimes.com/">News Scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com4tag:blogger.com,1999:blog-1694118162752568388.post-11084848591443642732011-01-27T00:26:00.002+01:002017-03-07T18:28:50.366+01:00Failed state and Scottish political branch operations<div class="headline">
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Piece I did during my tenure at Newsnet Scotland. I will resume publishing with <a href="http://www.scottishtimes.com/"><i>Scottish Times</i></a>.<br />
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by <strong>Alex Porter</strong><br /><br />News this week that the Conservatives in Scotland must hand over their management and their money to their London headquarters is yet another indication that the Unionist parties face an identity crisis in Scotland.<br />
A growing membership means their SNP rival can now claim, with validity, to be not merely Scotland's largest party but Scotland's party.<br />
As Unionist measures to control the Scottish political landscape become increasingly bizarre, the issue is not about whether Scots can be persuaded to remain within the Union but rather whether Britain's current economic, social and political crises are signals that the Union's end is imminent and irreversible.<br /><br /><strong>Conservative branch</strong><br /><br />The story of how the Conservatives in Scotland have been brought to heel by their London bosses <a href="http://www.telegraph.co.uk/news/newstopics/politics/scotland/8272191/Scottish-Conservatives-lose-control-to-London.html">broke</a> in yesterday's Telegraph in an article by Simon Johnson:<br /><br />"Senior insiders told the Daily Telegraph that money raised by the Scottish Tories is being passed to the UK party along with ultimate oversight over a radical restructuring of their operations."<br /><br />Ahead of the Holyrood elections Scottish party chiefs are to be sidelined according to Johnson and applicants for three new regional campaign manager posts in Scotland must apply to the Conservatives’ Millbank headquarters in London.<br /><br />The London party is not happy that the party in Scotland managed to secure only a single MP in Scotland in the Westminster election last year. After a review by Lord Sanderson of Bowden senior party insiders, who have expressed the view that the party in Scotland is not trusted to deliver desired changes in terms of leadership, financing and membership recruitment, are quoted as saying that London has "taken control" and, "Every penny we raise now has to go to London.”<br /><br />An <a href="http://www.conservatives.com/Get_involved/Jobs/Regional_Campaign_Manager_Scotland.aspx">advert</a>, announcing the campaign manager posts, has been placed on the Conservative website and states that the successful applicants will be based respectively in the east, north and west of Scotland. The job description says: "Reporting directly to the Scottish Field Director the Regional Campaign Manager will be responsible for front-line campaigning in all constituencies in their area."<br /><br />The party will now face ridicule as it seeks to examine the economic prospectus of the other parties during the Holyrood election campaign as their adversaries will simply point out that if they themselves are not trusted with their own money then how can they be taken seriously with Scotland's money. More serious though is the historical significance of this development. It can be seen as another sign of Unionist parties losing control in Scotland.<br /><strong><br />Labour branch</strong><br /><br />There is perhaps no clearer a sign of this crisis of Unionism in Scotland than the fact that Labour simply never accepted that they lost the Holyrood election to the SNP in 2007. Having assumed for generations that Scotland was their natural fiefdom their loss was traumatic and in opposition Labour have exhibited symptoms of denial.<br /><br />Failure to come to terms with losing to the SNP has meant Scotland has missed having a constructive parliamentary opposition. Instead, the parliament and public debate have been trivialised by the use of abusive procedural tactics against the SNP minority government.<br /><br />The motivation for this is merely to wreck legislation and disrupt ministerial activities in accordance with an overarching plan to undermine everything the Scottish government tries to achieve. Labour's Holyrood strategy team is not concentrating on improving the lives of Scots families or the long term health of Scottish institutions but purely and simply on getting elected.<br /><br />This weekend the press is carrying a story that internationally renowned academics have lodged a formal complaint to the Scottish Parliamentary Standards Commissioner over their treatment after having agreed to give evidence to the Scotland Bill Committee. Expert economists Professors Andrew Hughes-Hallet of George Mason University in Virginia and Drew Scott of Edinburgh University prepared, in advance and as requested, to give evidence in relation to Westminster's Scotland Bill. The professors are known to hold views favouring the Scottish parliament having the powers of fiscal autonomy. The committee, chaired by Labour MSP Wendy Alexander, 'ambushed' the academics on that subject showing no interest in their evidence in relation to the Scotland Bill.<br /><br />Scotland's parliament has had a good relationship with experts who over the years have offered up their time freely to help its committees improve legislation before becoming law. This latest furore will undoubtedly undermine the parliament's committee system. One academic and constitutional expert who does not support the SNP, Alan Trench, has already cancelled his visit to a hearing by the same committee describing its treatment of fellow academics as an 'inquisition'.<br /><br />The issue has drawn attention internationally as a senior colleague of Professor Hughes-Hallett from Virginia, Professor A Lee Fritschler, who served in the sub-Cabinets of Presidents Clinton and Carter, has written to Presiding Officer Alex Fergusson expressing his “dismay” at the way the two witnesses were “harassed in mean, petty and non-germane ways”.<br /><br />Sadly this is only too indicative of how Labour in Scotland have behaved as an opposition. It is only a few weeks since Iain Gray, in his visceral desire to undermine the idea of small countries gaining independence, inadvertantly insulted Montenegro resulting in incensed diplomatic communiques from the Montenegrin chargé d’affaires, Marijana Živković.<br /><br />The reason that the opposition parties are in such a pathologically oppositionalist mode is because they really are not allowed to offer anything more to Scotland. With no real scope to offer increased powers or an alternative agenda to what's currently on offer from London, Labour can offer no vision nor even a better managerial team. It is therefore reduced to carping and insulting and the net effect is that the Scottish electorate switches off.<br /><br /><strong>Lib Dems branch</strong><br /><br />And the last of this oppositionalist triumverate are the LibDems. Many of their voters were angered that they didn't form a coalition with the SNP to create a majority governement for the good governance of Scotland. Their move into opposition was seen as a result of interference from London. Against this backdrop their forming a UK coalition government with the Tories in London has discredited the party in the eyes of many Scots voters and a mauling at the Holyrood elections is expected by political commentators.<br /><br /><strong>Centralisation of a failed state</strong><br /><br />Scotland is being pulled in rival directions. Both London and the Scots want more control over Scotland.<br />
The forces which are at work run deep. Britain PLC is running deficits which are spiralling out of control. In the month of November government borrowing reached £23.3 billion and total UK government debt is approaching £1trillion. If you think about this in terms of the grant given to Edinburgh from Westminster it amounts to over 30 Scotlands.<br />
This year North Sea oil receipts will represent 25% of UK government revenues from corporation tax and that ignores tax revenues from the pumps. Without North Sea oil the UK would not be able to offer repayment guarantees to creditors. In that scenario the current planned UK austerity cuts would seem like a walk in the park in a late spring morning.<br /><br />When the City imploded, Gordon Brown, advised by current shadow chancellor Ed Balls, bailed them out with tax payers' money. The mighty merchants of the City of London failed as capitalists and begged for state benefits in the form of bail outs from hard working citizens. People who were conned into believing that the bail outs saved their jobs and savings.<br /><br />That wasn't enough for the bondholders and shareholders, so the Bank of England and Brown and now Cameron turned on the money printing machine. The new money diluted the wealth of the people and was given to financial institutions so they could continue trading fraudulent financial packages with each other and draw down large bonuses which properly reflect their skillsets as preeminent scammers. The population is continually threatened that if the bankers don't receive large bonuses they'll leave.<br /><br />Yes, the supine British media presents that as a threat rather than a promise.<br /><br />In recent weeks some of the Icelandic bankers who caused their own financial system to collapse have been arrested as has former Prime Minister Geir Haardie who faces charges of gross economic negligence - a crime which carries a two year jail sentence. It is perhaps stretching credulity to compare Britain to a European democracy.<br /><br />There's never going to be enough for the City. Bail outs are a guarantee that no matter how much risk you take you can't lose and so they go gambling away with impunity. That's why the austerity cuts are coming. Bankers know that another round of bail outs are in the pipeline and are making sure that there's enough cash around for them to go back to the public trough. The citizens are being squeezing in anticipation.<br />
This is the real reason that Scottish economic independence is being resisted. London City needs its next fix and the surplus in Scotland's national accounts is ripe for the plucking. However the real threat to Britain's kleptocratic rulers is that if Scotland demands economic independence the oil money will be next and then you can forget about the ballooning deficit. No-one will lend to Britain PLC. The IMF will come knocking on the door and demand austerity cuts that will relegate Britain from the league of first-world countries.<br />
Right now Mexico is declining as an economic power and the accelerating trend is towards centralisation. When states go into a death spiral they suck capital into the centre from the peripheries in a desperate attempt to shore up the apparatus.<br />
The result is rapid economic decline around the peripheries leading to the dramatic drop in tax revenues we are now witnessing. The centre can buy a little more time but it has increased the unsustainability of its hegemony. When the penny drops the state experiences capital flight and the population is fed to the dogs. Ask Argentina.<br /><br />Failed states are typically characterised by social, political and economic crises and the rapid process of centralisation of resources just in advance of the tipping point where the state seizes up, fractures and then awkward pieces start breaking off. The Soviet Union is a case in point.<br /><br />This is why Scots are not being offered a referendum on the Scotland Bill. The alternative is far too attractive but for Westminster far too dangerous.<br /><br />The Conservatives may not like having their money controlled by their London bosses. Pondering the Tory membership of the Calman Commission in light of this turn of events would make you laugh at the irony of it all if it didn't underline and highlight an unedifying Scottish trait.<br /><br />For some reason Unionist parties can effectively argue that Scots can't trust their own Parliament with the powers needed to improve Scotland's economy even at a time when London is technically bankrupt. That deep-rooted insecurity in my fellow Scots concerns me.<br />
<em style="font-style: italic;">Read previous essays written by Alex Porter for Newsnet Scotland:</em><br />
<a href="http://www.newsnetscotland.com/Scotland%27s%20Choice:%20Calman%27s%20Gulag%20or%20Economic%20Independence">Scotland's Choice: Calman's Gulag or Economic Independence</a><br />
<span style="font-size: small;"><strong style="font-weight: bold;">Scotland versus Britain</strong><br /><a href="http://www.newsnetscotland.com/economy/946-scotland-v-britain" style="color: rgb(27 , 87 , 177); font-weight: normal; text-decoration: none;">Part 1</a><a href="http://www.newsnetscotland.com/economy/960-scotland-v-britain-part-2" style="color: rgb(27 , 87 , 177); font-weight: normal; text-decoration: none;">, Part 2</a><br /><a href="http://www.newsnetscotland.com/economy/770-labours-bankrupt-britain" style="color: rgb(27 , 87 , 177); font-weight: normal; text-decoration: none;"><br /><strong style="font-weight: bold;">LABOUR'S BANKRUPT BRITAIN</strong></a><br /><strong style="font-weight: bold;"><br />Rediscovering Oil – A From Rags to Riches Story</strong><br /><a href="http://www.newsnetscotland.com/economy/686-rediscovering-oil-a-from-rags-to-riches-story" style="color: rgb(27 , 87 , 177); font-weight: normal; text-decoration: none;">Part 1</a>, <a href="http://www.newsnetscotland.com/economy/689-rediscovering-oil-a-from-rags-to-riches-story" style="color: rgb(27 , 87 , 177); font-weight: normal; text-decoration: none;">Part 2</a>, <a href="http://www.newsnetscotland.com/economy/696-rediscovering-oil-a-from-rags-to-riches-story-" style="color: rgb(27 , 87 , 177); font-weight: normal; text-decoration: none;">Part 3</a><br /><br /><a href="http://www.newsnetscotland.com/economy/632-would-an-independent-scotland-have-a-viable-economy" style="color: rgb(27 , 87 , 177); font-weight: normal; text-decoration: none;"><strong style="font-weight: bold;">Would an independent Scotland have a viable economy?</strong></a></span><br />
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<a href="http://www.scottishtimes.com/">news scotland</a>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com0tag:blogger.com,1999:blog-1694118162752568388.post-67885558869088210292011-01-24T20:35:00.005+01:002011-01-24T21:21:09.360+01:00Newsnet Scotland LaunchIt's election year and Scotland has a captured media which perpetuates the myths of Unionism.<br /><br />To take back our nation we must build an alternative media. (Complaining about injustice achieves nothing.) Newsnet Scotland is involved heavily in this effort. I urge that all bloggers which support Scottish self-determination put aside all our regional and personal differences, for a short while, and post Newsnet Scotland's video (see below) on your blogs.<br /><br />Newsnet Scotland believes that Scottish languages are absolutely central to Scotland's national identity. On our Burns Day launch we wish to let everyone in Scotland and our friends around the world know that Newsnet Scotland has arrived.<br /><br /><span style="font-style: italic;"><br />Work as if you live in the early days of a better nation</span>:<br /><br /><br /><object width="640" height="390"><param name="movie" value="http://www.youtube.com/v/Gmyo_z3gE4I&hl=en_US&feature=player_embedded&version=3"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><embed src="http://www.youtube.com/v/Gmyo_z3gE4I&hl=en_US&feature=player_embedded&version=3" type="application/x-shockwave-flash" allowfullscreen="true" allowscriptaccess="always" width="400" height="260"></embed></object>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com11tag:blogger.com,1999:blog-1694118162752568388.post-42955978695997438192011-01-22T10:59:00.002+01:002011-01-22T11:03:16.884+01:00Ed Balls bad news for Iain Gray's Holyrood chances<span class="Apple-style-span" style="border-collapse: separate; color: rgb(0, 0, 0); font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;"><span class="Apple-style-span" style="border-collapse: collapse; color: rgb(15, 20, 25); font-family: Arial,Helvetica,sans-serif; font-size: 14px; text-align: justify;"><p style="margin: 12px 0px; padding: 0px;">Piece I did for <a href="http://www.newsnetscotland.com">Newsnet Scotland</a>:<br /></p><p style="margin: 12px 0px; padding: 0px;"><br /></p><p style="margin: 12px 0px; padding: 0px;">by Alex Porter, <span style="font-weight: bold;">Economy Editor</span><br /></p><p style="margin: 12px 0px; padding: 0px;">With the UK budget deficit accelerating, the British pound plummeting and austerity cuts just around the corner, the issues of jobs and the economy will cast a long shadow over the fast approaching Holyrood election campaign. What effect will Labour leader Ed Milliband's choice of shadow chancellor, Ed Balls, have on the crucial economic debate on Scotland?</p><p style="margin: 12px 0px; padding: 0px;">To answer that question we have to realise that the UK economy is not in the same robust shape that the Scottish economy is in. While Scotland's national accounts show a surplus, the UK's deficit reached a staggering and unprecedented £23.3 billion in the single month of November last year, according to the Office of National Statistics. As government debt (minus off-balance sheet debts) are soon to pass the £1 trillion mark there is no real sign that Britain PLC can stop the deficit from ballooning further out of control.</p><p style="margin: 12px 0px; padding: 0px;"><strong>Labour's Crisis</strong></p><p style="margin: 12px 0px; padding: 0px;">Gordon Brown's fiscal, monetary and regulatory policies sped up the process of refocussing the UK from a manufacturing economy into a service sector economy. If you manufacture fewer products then a national economy suffers as it cannot earn income by selling goods abroad. As consumers Britons spent money on goods from abroad meaning more money left the economy than came in. This is unsustainable as deficits continue to rise. Britain's economy under Labour was driven by more debt, not growth.</p><p style="margin: 12px 0px; padding: 0px;">Deficit finance is no longer a disaster waiting to happen, it is happening. Unable to pay its debt the UK government and the Bank of England are indulging in money printing. This policy devalues assets and wages and is effectively legal fraud. After money printing there's a lag and then price inflation visits and you realise you have the same money in your pocket but it buys a whole lot less.</p><p style="margin: 12px 0px; padding: 0px;">Of course most currencies around the world are now devaluing. The developing world must now print to devalue their currency so that their exports remain competitive in a world of ever increasing dollars. Britain is simply the worst offender. However Britain is printing money not to be competitive - it's an importing country after all - no, it's printing money to pay its debts.</p><p style="margin: 12px 0px; padding: 0px;">The tax take from the financial sector has fallen off a cliff. Bail outs and stimulus had to be paid for and so drained the private sector, meaning tax receipts are not recovering and firms are now dependent on increased government borrowing to maintain earnings. Decreased tax receipts are what is causing the deficit to grow not an increase in public spending. While the City was selling dodgy derivatives around the world the UK government had a good rake but that's largely gone. Unless the public keeps stuffing banks with newly printed or borrowed money they would not be posting any profits at all.</p><p style="margin: 12px 0px; padding: 0px;">Printing money to pay debts means Britain is technically bankrupt. And if you thought there was some kind of economic benefit to devaluation you were wrong. Sterling has lost 20% of its value against key trading partners but whereas public confidence in the UK economy continues to tumble, Germany is recording its lowest ever unemployment figures.</p><p style="margin: 12px 0px; padding: 0px;">The devaluing pound will mean that importers will have to use more pounds to import goods for consumption inside Britain and those costs will be passed on to the consumer. Food prices are already rising but we're only at the start of this process. The price of oil is set to rise too meaning transport costs for food will make matters worse. An early indication of problems can be seen in recent food riots in Algeria, Tunisia, Morocco, Yemen And Jordan. Tunisia's President fled after failing to quell public unrest by slashing staple food prices. In the developing world a larger percentage of expendible income goes on the family food budget and so nations with poorer populations act as canaries in the global economic mine.</p><p style="margin: 12px 0px; padding: 0px;">Gordon Brown's drive to shift the British economy in the direction of services means that the UK is now trapped. The massive wealth generator that was the City of London was an illusion based on fraud. The Treasury was aware of the problem but Gordon Brown facilitated the rapid expansion of City activities through 'light touch' regulation. Britain looked flush for a while and then the truth emerged. The City was packaging and selling fraudulent derivatives around the world which resulted in the financial crash of 2008. The reality was that the City was a giant economic parasite sucking the rest of Britain dry and relying on North Sea oil to guarantee its debts.</p><p style="margin: 12px 0px; padding: 0px;">Britain's sovereign debt, financial and currency crises will, when the history books are written on the subject of Britain's fall from its status as a global to a second-tier power, be attributed to Fife's Son of the Manse.</p><p style="margin: 12px 0px; padding: 0px;">Balls's name is inextricably bound up with Brown's, so he too is closely identified with the financial crisis. He was close to Brown and the Treaury throughout the years when the crisis was incubating. Balls was appointed as an economic adviser to Shadow Chancellor Gordon Brown (1994–97) before becoming chief economic adviser to HM Treasury from 1999 to 2004. During this time he was once described as the 'most powerful unelected person in Britain'. On becoming an MP he stepped down as chief economic adviser to the Treasury and spent some time at the Smith Institute, a political think tank, before being made Economic Secretary to the Treasury in 2006. When Gordon Brown became Prime Minister in 2007, Balls was promoted to Secretary of State.</p><p style="margin: 12px 0px; padding: 0px;">Balls was at the heart of the Treasury and was a key ally of Gordon Brown when the policies of light touch regulation were rolled out and legislation was designed to favour the financial sector. He was therefore central to the creation of the derivatives bubble and the 2008 crash which ensued.</p><p style="margin: 12px 0px; padding: 0px;"><strong>Will Balls help or hinder Labour in Scotland?</strong></p><p style="margin: 12px 0px; padding: 0px;">Iain Gray will attempt to shift the debate onto the ConDem coalition's austerity programme but according to YouGov 40% of the UK population blame Labour for the public sector cuts, 22% blame the coalition and 25% see both London parties as equally culpable.</p><p style="margin: 12px 0px; padding: 0px;">For Gray to win the keys to Bute House he will have to convince the Scottish electorate of his party's economic competence. People are extremely worried about jobs and the economy and are rightly angry about the reasons the crisis happened. Labour strategists will have their job cut out for them in refocussing attention away from the causes of the crisis and onto the current UK government's management of it. Given that Balls is so closely associated with the last Labour government and closely identified with Gordon Brown, putting this recent economic record behind Labour will be much harder to effect. The electorate are no fools and know that the financial crisis happened during Labour's time in office.</p><p style="margin: 12px 0px; padding: 0px;">By making Balls the UK Shadow Chancellor, the SNP has been handed an electoral gift.</p><p style="margin: 12px 0px; padding: 0px;">The new Shadow Chancellor has a combative style and that may resonate with voters over time and as austerity bites. The problem for Labour UK is that this will bring the ConDem coalition out fighting. George Osborne will seek to pin the blame for the deficit on Labour's legacy but fortunately for the Chancellor there is now a Shadow Chancellor to point the finger of blame at.</p><p style="margin: 12px 0px; padding: 0px;">As the Holyrood campaign focuses minds on Scottish politics the benefit Labour accrues from coalition bashing will dissipate. Iain Gray will be asked searching questions on a subject he is weak on - economy. And he faces the big beast of Scottish politics - former economist and sitting First Minister Alex Salmond.</p><p style="margin: 12px 0px; padding: 0px;">Salmond has no need to attack Tory cuts during the campaign. He can simply blame Labour and Balls for causing the crisis. Labour will be put on the spot and forced to point to the ConDem cuts as the root of the problem. The SNP will have the luxury of killing two birds with one stone. And it gets better for the Nationalists. As Labour are forced to defend themselves they will struggle to pin the blame both on the ConDem coalition and the SNP government simultaneously. Salmond can jab Labour but Labour's counterpunch will be weakened.</p><p style="margin: 12px 0px; padding: 0px;">Of course Iain Gray and Labour have a seemingly pathological obsession with attacking the SNP and so with some calm economic logic Salmond can lay traps and watch Gray and his campaign team walk into them with predictable regularity.</p><p style="margin: 12px 0px; padding: 0px;">The Nationalists have another trump card. If Labour tries to blame the SNP over the state of the economy the SNP can retort that the powers needed to drive the economy are reserved to Westminster and so the crisis is London's fault. The case will be made that what few powers the Scottish Government does have were used effectively. After all, Scotland's economic state is healthier than the rest of the UK's. And the kicker for the Nationalists is that the argument that the UK umbrella protects Scotland from volatile international markets can be presented by the SNP as having always been a myth.</p><p style="margin: 12px 0px; padding: 0px;">So, blaming the SNP will only serve to move the economic agenda on to their turf - the case for economic independence. On this territory the SNP have a majority of public opinion behind them. A significant majority of Scots, if polls are to be believed, want their parliament to have complete control over taxation and benefits in Scotland. At the same time Labour must defend the Scotland Bill from heavy criticism by internationally renowned economists and business leaders who have characterised it as "dangerously flawed", "unworkable" and "a perfect storm".</p><p style="margin: 12px 0px; padding: 0px;">For Labour the longer the media focus is on the ConDems and London politics the less they will come under real scrutiny in Scotland and the higher will be their poll ratings. By contrast a specific media focus on Scotland can't come quickly enough for the SNP who are currently behind Labour in popular opinion surveys. The fact that there will be a referendum on the AV voting system on the same day as the Scottish elections will not be helpful to the SNP. Neither will the royal wedding scheduled for a week before.</p><p style="margin: 12px 0px; padding: 0px;">With the all-important economy issue such a key advantage for the SNP, Labour will need to try and bury their role in causing the crisis or the Scottish electorate will migrate towards Salmond and the SNP's case for economic independence. With Balls as Shadow Chancellor, Iain Gray's strategy of shifting the electorate's attention away from Labour's role in the financial crisis is now much less deliverable.</p><p style="margin: 12px 0px; padding: 0px;"><br /></p><p style="margin: 12px 0px; padding: 0px;"><a href="http://newsnetscotland.com">News Scotland</a><br /></p></span></span>Alex Porterhttp://www.blogger.com/profile/06577153712026023661noreply@blogger.com2