Tuesday, April 01, 2014

The Gamechanger...

There are two things consistent about the Independence referendum campaign.  The poll lead for staying in the Union and the constant use by the commentariat that the pro-Independence camp need a “gamechanger”.  This is not something I’ve ever thought, preferring to think of the “yes” camp as badly behind and needing snookers to get back into the campaign.  On the face of it, Nick Watt’s story in Saturday’s Guardian has delivered that desired snooker.

Oliver Letwin:As cops would say, he has form...
The story goes that a member of the Coalition government - the prime suspect being the person pictured to the right - has essentially said that “Of course, there would be a currency union” in the event of a Yes vote.  Deepthroat went on, speculating that the quid pro quo could well be the SNP’s policy regarding nuclear submarines, currently deployed at the Faslaine base in the Holy Loch – “you can see the outlines of a deal”.  At a stroke, the argument that Better Together have been prosecuting, that there will be no “Sterlingzone”, has been demolished.  What has been worse for Better Together has been attempt to rebut this story from the key figures in Better Together.  The sight of these figures trying to cover up their collapsing policy is akin to cheating husbands being found out.

It seems though that Better Together are suffering from collective wobbles, which seems to have destabilised their campaign.  This incident seems to be the latest and most serious setback to their campaign that really should be straightforward.  The Better Together campaign really should be based around flagging up the holes in “The Salmond Plan” (and there are holes…), consistently referencing & reinforcing the shared tied and cultural identity that we have as part of the UK (or endlessly repeat the opening ceremony from the London Olympics) and also putting forward the Devolution 2.0 proposals (fiscal autonomy) that really should have been put forward five years ago – when we wound up with the pig in a poke that was Calman instead. 

Instead Better Together has fallen into the trap of endlessly rubbishing anything that Yes Scotland puts forward, before reading the small print.

Sterlingzone is the ideal example of what has gone wrong with Better Together.  From the outset, Swinney’s proposals had more than the whiff of being a hasty compromise after the Eurozone crisis made adopting the Euro electorally toxic.  Modern currency unions demand an element of there being a sharing of economic & monetary policy – it was the difficulty in this area that Mark Carney flagged up that made Sterlingzone difficult (but not impossible).  Indeed, if anything Carney while not torpedoing Sterlingzone did torpedo the other SNP flagship policy – the lowering of Corporation Tax rates (initially to 3% lower than the r-UK rate).  Yet the response from Better Together was a complete misreading of what Carney actually said.  And this heavy handedness continued.

It could be argued that Better Together’s troubles started with Osborne’s declaration on Sterling. Michael Portillo on the BBC’s This Week programme described Osborne’s speech as “economically correct…  but bad politics”.  The heavy handed declaration that there will be no Sterlingzone has played into the hands of the pro-Indy Yes Scotland, as well as having the effect of backing themselves into a corner.  It has been a gamechanger, but in terms of reinforcing the trend rather than reversing the (at that point) nascent trend.  As I mused on Twitter, I wondered if Darling’s opposition to currency unions extended as far back as when he was Chief Secretary to the Treasury in Blair’s first Cabinet way back when Blair was keen on UK entry to the Euro.

Instead of the heavy handed approach, the UK government might have called Yes Scotland’s bluff and issued their initial negotiating terms regarding Sterlingzone, rather than blunder into the bear trap like a Wookie into an Ewok trap.  Not only has this heavy handedness fundamentally undermined Better Together’s arguments regarding being better together, it has changed and harmed the Union itself.  With Balls quite happy to stand shoulder to shoulder with Osborne & Alexander on Sterlingzone, what other issues (apart from the continuation of Austerity – which Balls has already signed up to) will they find common ground with?  If the heavy handed nature of the dismissal of Sterlingzone does not have critical enough consequences for Better Together, Deepthroat’s revelation has destroyed the credibility of the Better Together parties.  As a (now former) Chancellor once said to his boss, the Prime Minister “How can I ever trust anything you say ever again?”.

Whether this is the supposed “Gamechanger” that nationalists apparently need remains to be seen.  What is true is that the anger among “Scottish” Labour types at Deepthroat is palpable.  Whoever it is, they have delivered the mother & father of own goals to Yes Scotland at a time when there is creeping momentum towards Yes Scotland.  This will do anything but check that momentum.

Thursday, March 20, 2014

There Is No Room For Complacency

For all that this budget has hardly received very much pre publicity, this budget has all the hallmarks of being a revolutionary one with far reaching consequences.  Yet with the exception of the scrapping of rules involving the obligatory purchasing of annuities, there’s not one measure that you can point at that helps the primary objective of the coalition.  Unless that objective has changed to securing a second term for Cameron.
The headline act of this budget is undoubtedly the revolution surrounding pensions, especially the removal of the requirement to buy an annuity and the lifting of the total pensions savings people can take as a lump sum (called triviality) to £30,000 allied to the creation of the "Pension Bond".  This is designed to give people more options about with what they can do with their pension pot.  The complicated world of buying an annuity is something that certainly regulators and politicians alike were looking into. As a by product, it is estimated that the tax take for this is estimated to be £1.2 billion by 2018/19.  Another happy by-product is that the constituency who would gain most from this measure would be older – near pensionable age – people who are well off who are likely Conservative voters but may or may not be considering voting UKIP in May and in next years Westminster elections.

This dash for your pension pots has had an immediate effect.  Shares in financial companies fell, Resolution & Aviva fell by 5% while Legal & General fell by 8%, while shares in the pension provider Partnership Assurance fell by 55%.  On the other hand, shares for publicly listed Financial Advisers went the other way, because the government has promised to put money into providing free financial advice for pensioners.  Hargreaves Landsdown went up 14%, St James Place went up by 4% while Brewin Dolphin went up by nearly 3% - collectively their best day since RDR came in.

However if you look at the budget overall, there is a feeling of is that it.

Yes this budget is designed to play well to older voters, it’s designed to help business.  It’s also designed to engineer an inflated economy with the pretence of a recovery.  It’s not designed to help our economy.  As for the referendum, well Osborne might as well have declared victory on that front as there was no mention of any measures to convince Scottish voters that we are better together.  Yep duty on Whiskey has been frozen, but once again Balls confirmed his commitment to Osborne’s Scotched Earth policy by signing up to his Benefits Cap.  Indeed, you would have to look hard for any measure Balls and Labour disagreed on, despite their anger at the Tories for the still lacklustre forecasts.  Maybe that’s some sort of excuse for Milliband’s heavily panned performance replying to Osborne.

You could argue that Osborne’s budget once again pulled the rug from underneath Better Together’s feet.  Not content with only dedicating a sentence to the battle raging up here (obviously was never copied into Blair McDougall’s missive that there is no room for complacency), he seems to be perpetually putting back the date for the end of austerity.  Austerity is now scheduled to come to an end about the time the 10th Anniversary documentaries will surface about the fall of Lehmans, RBS and HBOS.  But remember that schedule is only today’s schedule and is not guaranteed.  Which once again begs the question – how exactly are we better together?

With the Referendum six months away, Osborne has decided to focus instead on next years Westminster election and to shoring up the Tory vote.  Apparently Osborn is shocked & surprised at the sheer amateurism of the SNP campaign, and today sort of underlines this as his viewpoint. I think he thinks this vote is as good as won already.  Westminster is a different matter & I suspect that today (despite the many faults of the Budget, and remember that there is always at least one surprise in the small print) will be another staging post towards a second Cameron term. 

The Tories, as the Thatcher years testify, are past masters at producing a feel good economic climate set to hit it’s peak at Election time in spite of the facts or the state of the country.  This budget has shown that this is the plan once again, and Milliband & Balls have fallen for it.

Thursday, February 27, 2014

So, How Did Lamont Not Lose That Debate?

The saying goes that you campaign in poetry and govern in prose (can you tell I’m going through my box sets of The West Wing just now?).  Well no one bothered to tell the Scottish Labour Leader Johann Lamont or the Deputy First Minister Nicola Sturgeon when they were involved in the fourth of STV’s Scotland Tonight’s debates about the Independence referendum.  Having shredded the reputations of Sarwar, Moore and Carmichael, Sturgeon was clear favourite to do likewise to Lamont.  Except that’s not quite how things turned out.

The first thing to make clear is that Lamont went into this debate with one aim – not to suffer the fate of the Scottish Secretary, his predecessor and Lamont’s own deputy.  It was a dirty, defensive display full of spoiling tactics which worked and ensured that Sturgeon did not land, metaphorically speaking, anything that can be construed as a killer punch.  To use a footballing metaphor, Lamont was essentially playing for penalties.

That’s not to say Lamont emerged unscathed, there were several foot into mouth moments.  When asked about the Bedroom tax, Lamont opined that “It could be introduced anywhere if people believed it was a good idea.  We are not genetically programmed in Scotland to make political decisions.  We choose the world we want to live in”.  In context it was a strange statement to make, but taken out of context (which the Pro Independence supporters have because there has been no context, period) it conforms to the narrative pro Independence supporters have built up about “Scottish” Labour ever willing to talk down Scotland.  And boy have they run with it…  Of course, what has been missed is that the Spare Room Subsidy itself is a New Labour invention, applied to privately rented properties by I think the Brown government.

On Trident Lamont expressed “Grave reservations” about Trident, but did not remove herself from that fence any further, twisting herself into all manner of contortions not to back Trident.

The second half of the debate was the 10 minutes questioning, where Lamont spoiled, obfuscated and generally did not answer any questions put to her, then talked over Sturgeon’s answers.  In amongst the white noise, there was an accusation Sturgeon was basing an argument about Scottish People dying at a younger age (this I think was about pension age going up to 67?!?), there was a revelation Sturgeon had joined CND at a time when Labour types were burning their membership forms, there was Lamont mixing up the Salmond plan of a Sterlingzone with Sillars alternative (and my preferred option) of a Scottish Pound & oh and Lamont tried to pin the redundancies at BAE Systems on the Independence debate.  I’m sure I saw a picture of Chorlton on twitter as well during the debate, so if I missed Lamont comparing Sturgeon to Fenella, sorry (it was the white noise, honest).

As someone with reservations about voting yes, this debate didn’t answer any questions.  I’ve covered the holes in the Salmond Plan ad nausium (and will continue to do so).  There are reservations about voting no as well, which are not going away.  Rather than answer the questions, Lamont chose to obscure Sturgeon’s answers.  Whether this was designed to keep the seed of doubt in many people’s head remains to be seen, and is a possible explanation of Lamont's performance.  What is clear though is that Lamont, in ensuring that Sturgeon did not produce the series of killer arguments that would have won the debate, destroyed the credibility of herself and of “Scottish” Labour and thus lost the argument.

Thursday, February 20, 2014

The Winton Paradox - Redux...

Ummm…  that Groundhog Day thing I was talking about in my last post.

If it’s not Sterlingzone, the issue that the pro-Unionists have the Indian sign over the pro-Independence supporters (or to put it another way, the other issue the SNP/Yes Scotland have made a royal bollocks of) is the European Union.  Specifically the claim that as existing members of the European Union, we would pick up the equivalent of the pass GO and collect £200 and become full members of the EU upon a vote for Independence.  Lets not let the fact that the membership forms have the United Kingdom’s name and signature’s over it get in the way of the SNP’s wheeze.

And a wheeze is what it is.  At the weekend, the BBC, for the benefit of people in England who haven’t been paying attention, once again wheeled out the president of the European Commission Jose Manuel Barrosso (above, with European Council President Van Pompuy) to state that an Independent Scotland would have to apply to become members of the European Union.  And not only that but that it would be difficult for them to be accepted as there would be countries who would veto their application (Spain, Germany and rUK would be the three main suspects).

Students of history would know this scenario well.  It took the UK the best part of a decade to be admitted to what was then the Common Market.  France (in the shape of De Gaulle) vetoed applications from MacMillan and Wilson before Edward Heath succeeded.

The bigger issue regarding the EU though is that this shows the disingenuous side of the SNP.  They are seeking for Scotland to exit a union with three other countries where we have limited influence and are looking to take Scotland into a bigger union where we would have even less of a say in the direction of travel of that union.  Previously, I’ve dubbed this the Winton Paradox after the Planet Politics blogger who initially spotted this flaw in the Salmond Plan.  If the furore over Sterling-zone has blinded Salmond to the fact that Carney’s speech didn’t torpedo Sterling-zone but his flagship 10% Corporation tax policy, then the furore over EU entry has obscured the fact that the EU ain’t the cuddly protector of workers rights it was when Jacques Dellors was its figurehead.

One of the more interesting campaign shifts has been Yes Scotland’s claim that a yes vote will mean no more Tory Governments.  This in itself is a hostage to fortune as sooner or later a centre-right successor party to the Conservatives will triumph in an independent Scotland one day.  More pertinently though is the bogus claim of no more Thatcherism that we didn't vote for.  Does that include the Thatcherism smuggled in by the European Union?

I’ve blogged before about Sturgeon’s sneering assault on Euroscepticism as “Little Englanders” by pointing out that Tony Benn and Peter Shore (prominent members of the Wilson & Callaghan governments) lead the No group in the European referendum in 1975 – as far back as 1963, Benn spoke about the Treaty of Rome as entrenching “laissez faire as its philosophy and chooses bureaucracy as its administrative method”.  There is also ignorance here as well.  The outsourcing of the Scottish ferry network was down to an EU directive, while there is a directive (91/440) that would make it unlawful for a future independent Scottish government to re-nationalise Scotrail.  While the Lisbon Treaty, yes that Lisbon Treaty hated by much of the modern Conservative Party, promotes the privatisation of Public Services. The old jibe about Europe being a club for business remains, it’s just that the institutions have had more names than Selafield. 

Yet the SNP/Yes Scotland mindset is still English Thatcherism = bad;  European Thatcherism = good.

As if we didn’t know it, the gloves are well and truly off in the fight for the union.  The irony is that as soon as there looks to be a momentum shift for the Yes camp, Better Together has targeted the SNP’s major weak spots.  As I’ve said before, unless Yes Scotland address the currency issue and the Winton Paradox, a no vote is a near certainty as these issues are the gifts that just keep giving.

Thursday, February 13, 2014

Sterling Zone - Part 57

One pound (British coin)
(Photo credit: Wikipedia)
Groundhog day may well have been a couple of weeks ago, but every day in the run up to the Independence referendum resembles the day before…  or maybe last Tuesday.

The last couple of days has resembled the days after Mark Carney’s speech, when both sides went through their arguments about I-Scotland adopting the English Pound.  Since Gideon Osborne’s speech, ruling out r-UK from setting up a “Sterling zone” with an Independent Scotland though, leaked out via Nick Watt in the Guardian there is fresh ferocity.

Pro union supporters have been trumping Osborne’s intervention, alongside pledges from Ed Balls and Danny Alexander as torpedoing the Salmond plan for an Independent Scotland.  Pro Independence supporters have been bitterly complaining about the bully boy tactics of Westminster in refusing to let an Independent Scotland (which we have a share in) use Sterling.  Sturgeon’s appearance on BBC Scotland’s GMS was akin to a spoiled brat whinging about the big boy that took his ball away.

There is two points to be made about this intervention though.  Firstly, we will find out if the SNP truly put some thought behind the plan of adopting the English Pound.  Now that there is little (if any) likelihood of I-Scotland using the English Pound as part of a Sterling zone, I wonder if the SNP have looked at all of the available options.  Judging by Sturgeon’s reaction on GMS yesterday morning, probably not.

As I’ve pointed out, I’m not particularly sold on adopting the English Pound.  Entering into a currency union would entail giving up sovereignty and also some of those economic leavers that Swinney and the other members of the Scottish government talk about.  It’s pretty similar to the arguments against the UK entering the Euro, so it is quite strange to see members of “Scottish” Labour who presumably (because we have never heard a peep of dissent from the official line) were pro UK entry to the Euro but are now against the creation of a Sterling zone.

The second point is that pro-Independence supporters should now disabuse themselves of any notion that in the event of a yes vote, the separation negotiations will be all tea and cakes.  To paraphrase my local MP, Divorce will be an expensive business & that Westminster will do everything in their power to hinder an Independent Scotland.  This probably means that Salmond’s stated Independence Day of 24 March 2016 may be put back if everything is to be done and dusted by that point.

We can expect r-UK to try and put the spanner into Scotland’s attempts to join the EU, we can expect painful negotiations about the division of the national debt and also the division of assets.  This of course is something that I did bring up in March 2012.

A lot of the coverage has said this is a turning point.  In reality, it will be nothing of the sort.  Westminster will assert that they will not take part in a currency union, while the Yes campaigners will continue to say that we can and will, without really understanding that this option is not the best option or will fly anyway.  At this rate, it’ll be another couple of weeks until Sterling zone comes up again.
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