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Independence? Show me the money

Dec 6

Posted by Jeff in Constitution, Economy | 37 Comments

It was never meant to be this way.

What if Mel McGibson had marshalled the troops at Stirling Bridge and tried a different type of inspiring rhetoric:

‘Imagine yourselves lying in your deathbeds, many years from now. Would you trade in all the days from this one to that, to stand here and fight, to say to your enemy that you may take our lives, but you will never take our £500!’. I don’t know if Scots had short arms and long sporrans back then, but it doesn’t exactly get my patriotic juices flowing.

Amidst this whimsy I am referring of course to the poll news yesterday (commissioned by the Scottish Government, curiously) that 32% of Scots are in favour of independence but 65% would vote Yes if Scotland proved to be £500 a year better off. I know times are tough but that’s a rather tawdry way to go about choosing your constitutional destiny, is it not? That said, I do wonder what the result would have been if the dangling trinket was 500 Euros rather than pounds. Isn’t it SNP policy to take us into the Euro before too long? I’m just saying…

Anyway, it will be a bit sad if this is what the next few years are going to come down to, a contest over who can convince Scots who they’d have more money with as their Government. It’s like some sort of unseemly Tesco vs Co-op price war. I can just see Salmond and Cameron jostling for position at Fort Kinnaird giving out clubcards. I understand that people are struggling to make ends meet and the prospect of more money in the wallet each month is appealing but noone really knows with any degree of certainty how much better/worse off Scotland would be after independence so what we end up with is all sides just yanking each other around, and the public seems to not only be caught in the middle, but falling for it gooing ga-ga over the shiniest entreatment before them.

I’m often disappointed at the idea that the richest in the UK have to be placated with financial incentives to stay here so if Scots were also seen to be selling their future to the highest bidder, that would be doubly depressing, triply depressing infact as this poll result will inevitably open to the door to more scare stories about how Scotland will be a basketcase of ah place if it goes it alone.

I suppose I should guard against being too cynical. After all, my personal belief is that Scotland will be better off as an independent country, albeit partially off the back of a foolhardy strategy surrounding its oil revenues and despite seemingly shunning the sensible option of a separate Scottish currency. Either way, would I be voting No if I thought Scotland would be worse off if independent? I like to hope not, I like to think that this choice runs deeper than the pound signs (or Euro signs) that are seemingly flashing in front of our eyes.

The prospect of building a new country in the mould of what Scots envisage a country should be, distinct from (but not separate to) the rest of the UK and Europe at large, is a tantalising prospect, an adventure that we can all tell the next generation(s) about and trust them to continue. I genuinely love the idea of a Scottish call to arms, a clarion call to Scots across the world to come ‘home’ and help build something special. It is a message built on emotion, on romance, on ambition. It is not a message that is built on creaming a few extra hundred quid for yourself.

Not that the SNP should be castigated if they do opt to tap into the strategy of promising more money for all after independence, it has to give the people what they want to get by, that’s how democratic politics works after all. Let’s be honest, a win is a win and, come the referendum, there isn’t really such a thing as winning ugly. The game is ensuring that your objective is appealing to the majority of the public, irrespective of how base their instincts may be. There is also a realism that has to be faced here; how many countries have chosen independence from a larger country and faced a poorer future? I am thinking of South Sudan, of UAE, of Norway. Plenty of oil, plenty of profit and plenty of people voting in favour of secession. Is that really so bad?

Either way, I remain hopeful that Scots can in time dig a little deeper and harden their opinion on the matter one way or the other. Voting Yes doesn’t come with a money-back guarantee, it is a decision taken for richer or poorer, so maybe we should take the £ signs out of the debate a bit more.

In defence of technocracy

Nov 18

Posted by Jeff in Economy, Europe | 25 Comments

There has been a lot of handwringing around the democratic deficit implicit in a ‘technocratic’ Government running a country with a PM at the helm that has not been elected into place. Setting aside what a technocrat actually is (I think they just like the word because it sounds cold and statist) and also setting aside the democratically sound sequence of events where politicians allowed these people to take over because they, you know, know what they’re doing, I can’t help but think that it is precisely technocrats at the helm that is required to solve the Euro crisis.

Let’s consider what we can expect otherwise with the politicians at the helm:

The David Cameron solution – the big bazooka approach of allowing the European Central Bank to print as many Euros as we need to bail out Italy, Spain, Greece and, heck, why not France too while we’re at it. Yes, yields would go down, yes the stock market would go up, but this is not real money that is being produced here, we’d be fighting debt with debt and I bet that wouldn’t work. It is more than a little bit convenient that this proposed solution effectively firewalls the United Kingdom from the fallout.

The Angela Merkel solution – With German patience with European neighbours wearing wafer thin, the idea of a Berlin bailout is all but dead. The problem child countries in the Eurozone need to feel pain, and need to be seen to be feeling pain, for Chancellor Merkel being seen to have done her job properly. I don’t know what the German word for schadenfreude is, but I bet the Germans are feeling it when they see those yields hit 7%. Insolvency and falling out of the Euro seems to be the general direction here.

The Nicolas Sarkozy solution – A financial transactions tax basically, a Robin Hood tax that takes from London and goes straight through the EU and out the other side to France via the Common Agricultural Policy rebates. Merci beaucoup my British chums, one might say, but there is no chance that Cameron will accept this, let alone his Eurosceptic backbenchers.

The Greek/Italian solution – Get the technocrats banking experts to find the solution that is a mix of the above and politically unpleasant for all.

Banking’s a tough old beast. The issue at hand here is basically the mother of all intercompany reconciliations that needs to be lanced and wound down to zero across a continent (and no doubt beyond). As someone who has had to audit and complete numerous relatively straightforward but nonetheless hideously ghastly intercompany recs in my time, I can be sure that we have a 99.9%/0.01% situation at play here. (that is, despite the millions of column inches, only the 0.01% know what they’re talking about. And you can probably add a few zeroes after that decimal point).

We need troubleshooters who can look beyond the next budget, who can look beyond the elections that are around the corner and can objectively take the difficult decisions while all about them people are losing their heads.

Those people are boring, those people wear brown suits and black shoes, those people can see eight, nine steps ahead, those people gobble Excel spreadsheets for breakfast, those people are honest brokers and cut through the crap.

For want of a better word, those people are technocrats and their time is now.

Illusions of Solidarity

Nov 17

Posted by Kirsty in Economy, Holyrood | 56 Comments

StrikeBy voting 83 to 36 with one abstention for parliamentary business to continue on November 30, it seems the SNP’s only whiff of solidarity in the last few days has been on the old membership card of its newest recruit.

Green MSPs Patrick Harvie and Alison Johnstone yesterday urged parliament to vote against Holyrood’s business motion for 30 November, the day multi-strike action against the Tories’ public sector pension grab has been scheduled. Labour escalated Harvie’s calls for members to “be out with the unions, supporting the Parliament’s hard-working staff”, with Paul Martin calling for MSPs to strike in solidarity. “Today the Scottish Labour party makes no apologies for standing shoulder to shoulder with workers across Scotland”.

But the Scottish Government said MSPs should attend Parliament on the day and debate a Scottish Government motion condemning the pension plans, and voted accordingly for business to continue.

The strikes on November 30 will be the biggest industrial action in the UK since 1926. With the GMB voting for walkouts over pension reform yesterday, and Unite members likely to declare today that they are joining the growing lists of unions taking action, over 3 million public sector workers across the UK should be out on St Andrews Day.

The strikes are protesting the triple whammy Westminster is levying on public sector pensions. The declaration by George Osborne in June 2010 that pension value will increase in line with the lower CPI measure of inflation, instead of RPI, wipes 15% off the value of public sector pension scheme benefits. When the mean average public sector pension is £7,000, with the majority of public sector pensioners receiving less than £5,000, this is a huge cut, made even worse when coupled with a forced increase in contributions and a rise in the normal pension age.

In the civil service, the pension scheme is unfunded – payments aren’t put in a fund, and invested and built up over time to cover future contributions, like other pension schemes. Payments which civil service staff make towards their pension from their salary instead goes straight to the Treasury, and is used to reduce current government expenditure. Pensions are then paid out of general taxation when civil servants are due them – hence screaming headlines about the burden these pensions levy on the ‘taxpayer’, as if civil servants haven’t also paid tax throughout their working lives.  In fact, given their pension contributions are used as immediate government income, it’s like they’ve paid an additional tax for the privilege of being a civil servant.

But a civil service pension is supposed to be the reward for accepting lower pay throughout your career in comparison to the private sector. Arguing that public sector pensions are not in line with private sector equivalents tells me pensions should be leveled up, not down. I agree private sector employees have been hit hard by the employer retreat from good pensions. But this doesn’t justify punishing public sector workers.

And I think Scotland’s MSPs should show a bit more solidarity with our public sector workers. Why not keep the parliamentary business opposing and condemning Osborne’s outrageous cash grab, but also keep parliament empty (except presumably for the Tories). Stand with the parliamentary staff on the picket but don’t cross it.  And stand up to show a bit of real solidarity with Scottish workers being punished for an economic crisis not of their making.

 

UPDATE: As the comments point out, the parliamentary vote was 83 to 36, not 83 to 60. Bad typo, corrected now. Kirsty

Peering in Windows

Nov 14

Posted by Kirsty in Economy | 6 Comments

PrimarkRespect for Shopworkers’ Week ended on Friday, just prior to the time of year when even the most reluctant among us start to venture into the hallowed halls of personal consumer capitalism for glitter, baubles and iPad 2s.

During the week itself, Primark announced it has had almost 4,500 people apply for the 500-odd positions available in its new flagship Princes Street store in Edinburgh, part of the council’s ‘string of pearls’ vision for the city’s premier street.

Notwithstanding the closest you’ll get to pearls in Primark will be white gauzy plastic and cost about £2.50 (I know, because they’re one of my favourite pieces of costume jewellery), retail is crucial to the Scottish economy. It’s one of the few sectors still creating jobs, as the oversubscription for positions at Primark shows. The final report, back in March, of research into Assessing the Contribution of Retailing in Scotland, commissioned by Scottish Government, found retail turnover climbed 57% between 1998 and 2008. It now accounts for 5% of Scotland’s gross value added – a measure of GDP in real terms – 10% of its turnover and 10% of employment.

But retail also accounts for a notable proportion of Scotland’s low wage problem. 59% of shopworkers are part-time, 62% are female, half are under 30 and the average weekly salary is £258 – 56% of the Scottish average across all sectors. Together with the hospitality sector, retail across the whole of the UK accounts for almost half of all minimum wage jobs. And the situation isn’t likely to change. Over 2 in 5 of all retail employers have to increase their bottom pay level whenever the minimum wage increases, implying a significant number of retail employees are paid at the very legal minimum. In giving evidence to the Low Pay Commission this month, the Association of Convenience Stores warned further minimum wage increases will result in job losses and decreased hours for staff.

Pay isn’t the only issue. Respect for Shopworkers’ Week, organised by the trade union USDAW, focused on its Freedom from Fear campaign, to prevent violence, threats and abuse against shop workers. But it’s hard to believe the Scottish Government prioritises shop workers. Having dismissed Hugh Henry’s Workers (Aggravated Offences) Scotland private member’s Bill by disagreeing with its fundamental principle last December, the SNP prevented any further consideration of the Bill’s merits.  Henry sought to provide a stiffer sentence to anyone assaulting a worker in the course of their duties, including shop workers. The previous Labour-Liberal Democrat coalition weren’t much better, by holding in reserve the extension of powers preventing larger stores opening on Christmas Day to include New Year’s Day as well, as part of Karen Whitefield’s Christmas Day and New Year’s Day Trading (Scotland) Act.

A glimmer of hope is the Scottish Government’s desire to extend the living wage beyond the civil service. A living wage is not just deserved by public sector workers, and compelling the private sector to make the just minimum a realistic reflection of the cost of living for workers in retail is a critical step towards improving low pay across the board.

And there’s an action you can take yourself. Why not resolve this Christmas, and afterwards, to pay heed to what Henry tried to achieve. Be nice, and don’t take out your festive shopping induced fury on the £6.08-an hour worker serving you. Even if that wily Christmas shopper in front just snaffled the last string of Primark pearls.

For Theirs is the Kingdom of Heaven

Nov 11

Posted by Kirsty in Economy, Society | 24 Comments

I would’ve liked to have been a wee fly on the wall when Alex Neil defended Scottish Government anti-poverty policies in front of the Church of Scotland’s Commission on the Purposes of Economic Activity this week.

I would’ve been intrigued to watch as the Cabinet Minister for Capital Investment put forward policies like the home building programme as evidence of job creation and poverty reduction. Firstly, because The Scotsman can’t seem to decide whether the commissioners found Neil’s responses “disappointing” or “impressive” (anyone who can untangle this journalistic model of clarity get back to me in the comments).

But my curiosity is mainly piqued because there’s scant opportunity at present within Holyrood to see the Scottish Government really defend their policies against a well-thought, robust critique.

Scottish Labour is still revolving around the broken tactic of opposition for opposition’s sake, and it is neither robust nor well thought-out.  A brief scan through the last week’s press releases from Holyrood’s official opposition indicates that the SNP are responsible for just about every economic ill north of the border.

Assuming The Scotsman’s report on the Minister’s talks with the Church of Scotland Commission isn’t entirely garbled, Neil’s claim that Scotland doesn’t have enough powers to tackle poverty and unemployment does seem to stand up, ironically since nothing seems to be standing up against the Tories’ bulldozing of any of the fragile edifices of social justice this country previously had.

The Church of Scotland’s Commission on Economics is one of many endeavors by civic Scotland aiming to understand the root causes of poverty in Scotland and to propose workable, effective solutions. Led by Professor Charles Munn OBE, the Commission will report in February 2012 on fundamental ethical questions underlying economic activity, on which the Kirk can influence change.

The two-year Poverty Truth Commission reported in April 2011, with an impressive legacy for implementation, even when considering just the Scottish Government: persuading civil servants to now engage with and involve those with direct experience of poverty in policy development; to work together with kinship carers to address the needs of children.

Quoted in the report, Jim Wallace, the former Deputy First Minister, said: “Through the Commission I have become convinced that we are more likely to identify solutions to some deep-seated problems if politicians and officials involve those who experience the reality of poverty in their daily lives. That is the challenge to policy makers and those who deliver public services at every level of government.”

I don’t think the challenge of tackling the abhorrent scale of poverty in Scotland is misunderstood or underestimated by the Scottish Government. I don’t think Neil runs to the adage of ‘more powers’ for the hell of it – I think they’re needed, and I think Scotland’s poverty proves why. But I think even without a debate on what powers and when, it’s obvious the Coalition Government in Westminster and their spending plans – a “reckless gamble on people’s lives” – severely restrict what Scotland can do to alleviate the suffering of too many people in our country.

I am glad Scottish Government, and Ministers like Neil, have to discuss and defend policies in front of movements by Scottish civic society. Whether it’s the Kirk’s Economics Commission, the Poverty Truth Commission or the Scottish TUC’s Better Way campaign, the need for people to reveal the pain of the recession and demand change is crucial. It’s also heartening in Scotland that we have an established church firmly on the side of the 99%, unlike elsewhere.

Every government needs to be held to account, because it is in the dialectic of proposing and defending policy that better decisions are made. Civic Scotland does this extremely well, and Scottish Government should, and mostly does, listen.

But if the only source of this critique is civic Scotland, it indicates it’s time Scotland’s political opposition realign themselves. You can’t claim to be a movement for social justice but keep resorting to student union-esque baiting by press release of bad news for the SNP. After all, the rest of Scotland is getting involved to find ways to work with, thoughtfully debate with, and constructively disagree with the Scottish Government and its work to tackle the causes of poverty. Why not those elected to hold them to account?