Contraction underlines Scottish and UK economic divergence

A piece I did during my tenure as Chief Editor of Newsnet Scotland. I will soon resume publishing under the Scottish Times title.

Britian's GDP contracted by 0.6% in the last quarter of 2010 according to the Office of National Statistics (ONS).

Scotland UK comparison

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.

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.
"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."

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.

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.

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.

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.

Low interest rates bitter-sweet

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.

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.

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.

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.

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.
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.

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.


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Dollar hegemony takes another knock

A piece I did during my tenure as Chief Editor of Newsnet Scotland. I will soon resume publishing with the title Scottish Times.

by Alex Porter, Economy Editor

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.

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.

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.

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.

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.

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.

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.

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.
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Niall 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.

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.

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?

All this is should say one things to Scots. Demand powers of your taxes and prepare for a new currency!

Independence of Scots Law at risk from Scotland Bill

A piece I did during my tenure at Newsnet Scotland. I will soon resume publishing under the title Scottish Times.

by Alex Porter
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.
"Loss of identity"
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.
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."
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).
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.
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.
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.
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:

"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

"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."

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.
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.”
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.
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?
Liberal Democrats: promises, assurances and bearing gifts
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.
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.
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".
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'.
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.
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.
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.
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."
Current Secretary of State for Scotland Michael Moore (Lib Dems) promised that the proposals recommended by the Calman Commission would be "implemented in full."
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".
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.
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.
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.


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Poll shows SNP heading for second term

A piece I did during my tenure at Newsnet Scotland. I will resume publishing under the title Scottish Times.

by Alex Porter

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.

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%.
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.

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%.

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.

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.

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.

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.
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:
"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.
"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.
"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.
"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.
"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."
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.
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Labour civil war ahead of Holyrood election

A piece I did during my tenure at the former title Newsnet Scotland. I will resume publishing under the title Scottish Times.


by Alex Porter

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.
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.
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".

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 …

“… 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.”

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.

“It just proves that they were offered all they wanted – and more – and put puerile political opposition before the national interest.

“It is obvious many of his MSPs are unhappy and have startlingly resorted to making known their unhappiness with Iain Gray’s leadership."
Labour's manifesto uncosted
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.

In an article in the New Statesman journalist Dan Hodges revealed that key Labour election pledges have not been costed:

http://www.newstatesman.com/blogs/dan-hodges/2011/02/party-labour-miliband-shadow
“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 …"
Iain Gray's leadership
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.

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.

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.



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Scots want economic independence - but how badly?

A piece I did during my tenure of Newsnet Scotland. I will resume publishing under the title Scottish Times.

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

by Alex Porter, Economy Editor

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.

Scotland in post-austerity Britain

Two news items in the last week have given a glimpse into the future in Britain PLC post-austerity.

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.

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.

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.

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.

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.

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.

Powers not cuts

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?

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.

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.

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.

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?

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.

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."

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.

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.

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.

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.

(Video removed)

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.



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