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Friday, 30 March 2012

Can Scotland Afford To Stay In UK?

To date, what little "debate" there has been on whether or not Scots should vote "Yes" in the proposed referendum, has consisted of a series of threats from the Unionist side, together with a series of loaded questions based on questionable statistics. The SNP has spent much of the time on the defensive, attempting to defend Scotland's right to be independent or its "right" to be automatically included as a member of the EU. Despite the lack of cohesion in the Unionist camp, they have managed to run a campaign where the sole aim is to create uncertainty or fear of independence, in the minds of Scots. The most recent poll, one of a series of polls conducted at the behest of one section or other of a largely Unionist media, claims that 51% of Scots are not in favour of independence, that only 36% are in favour with another 19% who don't know. The poll was taken on a UK basis and the total number of Scots polled was 100 but it was given wide exposure. Unfortunately this kind of pathetic excuse for scientific study is allowed to be presented as worthy of serious consideration by political pundits and the headline writers in the news media.

What is slightly depressing about all of this is the defensive nature of the Nationalist reponse. The SNP spends a great deal of time making assertions, some of which are very quickly called into question and not just by Unionists. No where is this more evident than in the area of economics, the use of the euro and the question of the currency an independent Scotland will use. I have made my position on the euro and the use of sterling abundantly clear on this blog and for the moment, will say no more. I have to wonder however, why the SNP allows the Unionist camp to put Nationalism on the back foot to such an extent, on the question of whether or not Scotland would or would not be better off after independence. Unionist claims about the economic position of Scotland after independence, are no more than assertions, frequently based on false statistics and equally flawed arguments. Unionists can no more argue that Scotland would be worse off after independence than they can guarantee that the UK will be able to maintain its standard of living after the oil and gas runs out. Nationalists are continuously being asked what an independent Scotland will do when the oil runs out. The question is equally valid of the UK, therefore why is it not asked?

The latest claims suggest that even with its agreed share of oil revenues of between £8 and £10 billion per annum, Scotland would run a deficit of approximately £9 billion. The latest oil find west of Shetland has just increased the life span of Scotland's oil by approximately 30 to 40 years and, if we accept the analysis of oil analysts who have argued for years that there is a great deal more oil there, which has already been discovered but is not currently being exploited, the oil revenues will be ours for a great deal longer than that. The one major problem that everyone recognises, is that oil revenues will fluctuate in value as oil prices fluctuate, but that will apply whoever owns the oil. The argument therefore, that Scotland will be forced to rely on a volatile resource, will apply equally to the UK. If oil is currently providing the UK treasury with around £9 billion per annum and Scotland's deficit is still about £9 billion, that is at least £9 billion the UK Treasury is going to have to find when the oil runs out. According to Unionist politicians, the oil is running out much more quickly than we think and, the current level of oil prices will not be sustained, therefore the UK Treasury is already on that slippery slope at the bottom of which, lies the £9 billion black hole. If we also consider the enormous pressure the present government is under to cut back government spending - remember Fitch the credit agency has already put the UK on a negative outlook - is Scotland inside the UK looking forward to massive cuts in public spending and a continued downward spiral in the Scottish economy?

Just as it was worth while to look at the records of Brown and Darling as Chancellors and their impact on the Scottish economy, it is worth while to take a quick squint at some of the economic arguments of Scotland's Unionists and at some of the government's own figures. The one thing that we can say about the consistency of the Unionists is that they are inconsistent. In November 2011 Danny Alexander claimed that Transport Scotland saw the referendum "as an issue", which the organisation immediately denied and publicly contradicted him. Ruth Davidson recently claimed that Scotland "would not be able to finance its welfare and pensions bill as the government had spent £100 billion on benefits since 2002 whereas the total oil and gas revenues in that period was only £59.7 billion" That suggests a deficit on benefits and pensions alone of £40.3 billion but Michael Moore, a member of the same coalition government, recently claimed Scotland's deficit was a "staggering £21.5 billion since 2002". The Scottish Office's own figures show that Scotland's deficit over the past 30 years has been no more than £41 billion. Not to be left behind in the race to lead the "let's knock Scotland" team, Johann Lamont has decided "it would not be in Scotland's interests to have more power because it is better to have a unified tax system which re-distributes wealth to where it is most needed." It just so happens that in areas of multiple deprivation in Scotland, in the 15% most deprived areas in 2009, Glasgow City had 31%, North Lanarkshire and South Lanarkshire each had 6%, therefore 43% of Scotland's worst 15% areas of multiple deprivation had been Labour Party strongholds for generations. Despite that appalling situation, the leader of the Labour Party in Scotland would still rather see Westminster, with a Tory/Lib/Dem coalition government committed to further massive cuts in public spending, control Scotland's economy.

What is forgotten more often than not, when government figures for public spending are bandied about, is that what is being announced with such authority is IDENTIFIABLE public expenditure. In other words there is a great deal of public expenditure which is not identifiable or cannot be readily apportioned to the various countries and regions of the UK. Some expenditure is said to be for the benefit of the UK "as a whole". It is estimated that at least 17% of total expenditure is unidentifiable, the bulk of that taken up by defence. The unidentifiable expenditure in 2006 was £69.6 billion with another £26.1 billion as an accounting adjustment. The Centre for Economics and Business Research (CEBR) figures show that the UK has not run a surplus since 2001/2 whereas Scotland has run a small surplus in each of the last five years. The same organisation's figures for 2009/10 show that in terms of the Government's identifiable public spending, Scotland's deficit was £9 billion or 6.8% of GDP whereas the UK's deficit was £107.3 billion or 7.6% of GDP. In that same year, 2009/10, 50% of the increase of £2.8 billion of public expenditure was for "social protection" or benefits and unemployment. So the Unionist argument suggests that "our economic policies are creating unemployment, which increases your share of public expenditure. That contributes to a larger deficit, which is the reason you cannot afford independence". Circular or what?

When it comes to Defence spending the story is reversed with Scotland never having had its population share of that expenditure. The Strategic Defence and Security Review (SDSR) Commons committee refused to hold an inquiry into the concentration of defence spending in the South of England since 1997. Since 1997, there has been a loss of 10,500 defence jobs in Scotland and an underspend of £5.6 billion in Scotland between 1997 and 2007/08 when the figures became public and the MOD stopped producing regional figures for defence expenditure for "defence reasons". Nevertheless the MOD has estimated it has spent £1.57 billion in 2010/11 with Scotland contributing an estimated £3.3 billion. Had that defence underspend been spent on creating jobs in Scotland, in education or health or changing the shape of the economy, the difference in our economic performance would have been substantial. Would an independent Scotland have been involved in Iraq or Afghanistan, would it retain Trident; would our expenditure on defence be anything like what it has been as part of the UK?

Did Osborne's budget actually do anything for Scotland's economy, did it provide the kind of policy change necessary to lift the Scottish economy from the trough into which it has slid recently? No budget by any UK Chancellor has ever done anything specifically for the Scottish economy, although the creation of Entrprise Zones in Dundee, Nigg and Irvine will encourage business development in those areas but the refusal of the request by the SNP to bring forward £300 million from the capital budget, is another indication that there will be little to encourage any real change in the way the economy is allowed to expand. The cut in the corporation tax to 24% in 2012 and to 22% in 2014 will be welcome but the increase in the duty escalator which put 41p on a bottle of whisky now means that one of Scotland's biggest export earners carries duty which is 37% higher than that on beer and 30% higher than the duty on wine. The question is why? It makes sense to encourage activity in the North Sea Oil industry by tax concessions, given that the estimated revenues from oil will be in the region of £54 billion over the next five years. What UK government was ever not interested in getting as much as possible out of the North Sea?

One of the Bond fund managers at M&G has offered an interesting analysis of the UK's prospects. The country has now officially slipped back into recession as recovery in GDP fell by 0.3% in Q4 of 2011, slightly more than expected. The so-called recovery in the UK is worse than it was after the Great Depression of the 1930s as the GDP is still 4.1% less than it was before the recession hit and after 15 Quarters. Over the same time period after the Great Depression the GDP was less than 2% lower than the pre-recession level and the recovery now, is worse than those after the recessions in the 1970s, 1980s and 1990s when GDP returned to pre-recession levels after 13 Quarters. Ben Benanke has also fired warning shots that the USA is not "out of the woods" despite growth in that country having been over 2%. His comments caused an immediate slide in shares in Asian markets. There is now open speculation that there might be an attempt by Mervyn King to devalue sterling in an effort to give a fillip to the markets.

The longer Scotland is controlled from Westminster the longer we will be prevented from taking the economic measures that are needed to give the Scottish economy the lift it needs. Any control from Westminster will automatically have greater regard for the economy of the rUK and the longer Scots will have to wait for the reforms we so badly need. That is the message that needs to be given to the Scottish electorate. No one can give guarantees that Scots in an independent Scotland will be better off but there is ample evidence to show that we are unlikely to be worse off, with the potential to create a country which will provide opportunities to create a society worthy of our aspirations.

Sunday, 18 March 2012

Scottish Image Abroad and the Scottish Diaspora

Keeping to its daily scare story timetable, the Daily Mail reported last week that Alex Salmond is to spend taxpayer's money abroad, visitng countries such as China, India, Pakistan, the MIddle East, Africa and South Asia. Good, it is not before time. China, India and South east Asia just happen to have among the greatest potential for economic growth of anywhere in the world. He should then try to fit in Latin America, where there is already much goodwill for Scotland. There are anything up to 20 million Americans who claim either Scottish or Ulster Scottish ancestry, 4.5 million Canadians, 1.5 million Australians, 500,000 New Zealanders, 80,000 Chileans and almost 100,000 Argentinians. There are other odd thousands scattered elsewhere in the world and there are few Scots who do not have relaives abroad. I have relatives in the USA, Canada, Australia, New Zealand and South Africa, all of them citizens of their new, adopted country but retaining a strong bond with Scotland. When teaching I once asked a class of 33 how many had relatives abroad and was astonished when 27 of them put up their hands.

This is an enormous advantage for any country which is attempting to win back its freedom and sovereignty because there is an already well-established well of goodwill, but for Scotland, it is as much about the image we portray abroad, the perception of us as a people that other countries and their people have, that gives us an even greater advantage than most. The part played by Scots and Ulster Scots in the birth and development of the USA is well known, as is our part in the birth and development of Canada. Any First Minister, and later Prime Minister of an independent Scotland, is pushing at an open door in developing political relationships in either of those two countries. In China, the part played by the Scottish Church won great goodwill and the potential to exploit oil technology in that part of the world is incalculable. The esteem in which Burns is held in Russia is amazing. It is getting that message across to the Scottish electorate that is now important, to counter the narrow, mean-spirited and totally destructive game being played by Scotland's Unionist politicians and their media mouthpieces.

I took Humza Yousaf to task over his comments on Question Time about "haggis-eating, kilt-wearing, Braveheart Nationalism". He had two Scottish Unionists on the panel, leaders of their parties and both of whom believe, not only that Scotland is subsidised, but that the subsidy should continue. Instead of rising to Dimbleby's bait about the £500, he should have directed him to the two Unionists who haven't enough dignity to want to pay their own way, who are adamant they should continue to live off the backs of English people less well off than themselves. He could have said, "I know we are not being kept by England, but if we were, as a Nationalist, I would tell you to stuff it. Direct your remarks to the two people on the panel who believe they are being kept and, want their demeaning condition to continue." Instead, he chose to pander to a Unionist stereotype - and actually received a round of applause.

The following is directed at Mr Yousaf, so that he might learn what the kilt means, not just to Scots. In February 2003, I was up at the Crieff Hydro, where I kept my horse, and happened to bump into two coachloads of tartan-clad people of all ages. They were all wearing different variations of the same clan tartan - Clan McGregor, my own clan and my middle name. They did not look Scottish and there were several of mixed-race, mainly white/Asian, with the women resplendent in long tartan dresses, tartan shawls and the men in kilts, jackets and several of them with the full plaid. Curious, I asked, "Where are the McGregors going today?" They were all Americans, in Scotland to commemorate the 400 anniversary of the Battle of Glen Fruin, the battle which moved James VI to proscribe Clan Gregor. Delighted I had recognised the tartan, they were even more delighted to just bump into a clan member, still living near the traditional clan territory. For the next 45 minutes, we discussed history, politics and the Clan. Their knowledge of all of them was extensive and their commitment to Scotland and their Scottish heritage absolute. When I took my leave, I was followed by a loud, "McGregor in spite of them".

I am a keen history buff, particularly military history, and have travelled a substantial part of Europe, visiting battle sites. On the 65th anniversary of the D Day landings, my wife, two eldest grandchildren and I visited Normandy. As I wore the kilt, I became a target for countless well-wishers of all nationalities, just to make conversation - and have their photograph taken with "the kiltie". In the car park at Arromanche, we were stopped by a veteran from Elgin, who had stormed Sword Beach with Fraser's Lovat Scouts at the age of eighteen - the same age as my grandson. While we chatted, we heard the pipes being played - badly - a short distance away and out of curiosity, went to see who it was. We discovered two middle-aged men, in full highland regalia, happily marching around, to the delight of the watching crowd. When they stopped I approached them, to find they were French from Amiens, and neither had a word of English. When asked why the pipes and highland dress, they said they had been brought up by their parents on tales of the Scottish soldiers who had been in their town during WW1 and what wonderful men they were. Their explanation was simple, "We love Scotland and the Scots. The kilt is wonderful"

St Mere Eglise, the first town to be liberated by the American Airborn in the early hours of the morning of 6th June 1944, was packed with tourists and American veterans. A French dance band played in the square and people danced and sung, as they waited for the more formal part to begin. Again, I was the target for photographs and conversation, until approached by an Inverness woman who had married a Frenchman and had lived in the town for over twenty years. She insisted I meet two Italians she had met and introduced me to two young students, dressed in the uniform of the Black Watch in WW11. One of them had a set of pipes under his arm and, as he could speak not a word of English, his friend explained their dress. They were both passionate about Scotland and its people, having heard about the presence of the Black Watch during WW11. His knowledge of the Regiment and its history was extensive and when they heard that not only was I born in Perth - home of the Black Watch depot for over 100 years - but that I had worn the Red Hackle, and for a time was in the 6/7th, the battalion which had fought in the Italian campaign, including Cassino, their awe and respect was embarrassing. They lived for the day they could visit Aberfeldy, where the regiment had been raised. They excused themselves, walked to othe centre of the square and the piper started to play - well - Heilan Laddie, the regimental march. Without even a hint of self-consciousness, his partner stood rigidly to attention throughout, holding a perfect salute. The French band stopped playing and the crowd stood in completle silence. These two young Italians, neither of whom had ever set foot in Scotland, standing in a French town, were paying not just respect, but homage to my country and regiment, while the only kilted Scot was a mere spectator. As the march finished, they turned smartly to the right and walked off parade, to thuderous applause.

The road to the American cemetary at Collville St Laurant was blocked with traffic when we approached. As we sat waiting, a pipe band started to pass the car. They were immaculate in Royal Stuart tartan and I stopped one to ask where they were from. To my surprise they were Dutch, every single one of the forty odd of them. Their English was excellent and they were only too happy to explain. They were from Amsterdam and were fascinated with Scotland, which they visited regularly, its people and its history, to such an extent that several of them had studied in Scottish univesities rather than Dutch or other European ones. We talked at length about the political situation in Scotland, particularly when they learned I was a nationalist. My wife and I are great Franco-philes, visiting the country every year, but this was an incredible visit. I have never experienced anything other than friendship and the warmest of welcomes but to see the way in which other nationalities respected Scotland was uplifting to say the least.

Had I given it any thought at the time, I should not have been surprised. As a fully paid up member of the Tartan Army, I have travelled all over Europe, both East and West, with the Scottish team. Each and every trip has confirmed the affection in which we are held. In Dortmund, the local council threw a massive street party on the day of the match, where the two sets of fans joined together, travelled to the match together - we lost - and travelled back together, to carry on partying. In Macedonia, I was presented to a Macedonian family by a fan, given gifts and told it was because we had shown them respect. In Minsk, despite the attitude of the police, I spent a wonderful evening with some economics students, desperate to learn more about us and what we are doing. In Lithuania and Estonia, Norway, France and everywhere else we have been, the Tartan Army has been embraced by the population.

Like any sensible voter, there is expenditure to which I could object, but esablishing trade links and diplomatic and political contacts is not one of them. We will need all of them but our image abroad should make it easy and we are pushing at an open door. I wonder if that is why the Unionists object.

Thursday, 15 March 2012

It's The Economy Stupid.

Bill Clinton made much of that line during his presidential campaign in 1992, thereby reducing any achievments of George Bush, particularly in the field of foreign policy, in the minds of the American public. At the time of the campaign there was a street interview carried out by one polling agent, which was given a fair bit of air time. One man was asked if he was aware that George Bush had created x thousands of jobs, to which came the reply, "Oh yeh, I am holding down four of them!" as he walked on. Over many years of campaigning for independence I have often said that the desire for independence, has nothing to do with economics but unfortunately, for many Scots, it has everything to do with it. In fact, the last Social Attitudes Survey found that as little as £500 in their pocket, could buy the votes of some Scots for independence.

 To some of my fellow countrymen and women, if independence looks as if it might cost them a bob or two, they want nothing to do with it. Fair enough, they have been battered for years, by tales of how poor we are, what a disaster independence would be, how it would appear that of all the comparable countries in the world who have made a success of independence, with far fewer resources than Scotland, we are singularly incapable of making it work for the benefit of our people. When oil was first discovered, the claims were that there wasn't much  of it, but, there was sufficient to make a Scottish currency far too valuable on foreign markets, therefore Scots would be unable to "manage" it. In other words, we would now have been "too rich" to be independent. Even now, knowing of the existence of the McCrone Report and its contents, has meant nothing to those who still wonder "if we can afford it".

The negativity about independence by Scottish MPs, is well recorded, with some more guilty than others of painting a picture of Scots and their country, which is unrecogniseable to anyone prepared to be even fair minded. They have much to answer for, as they have relentessly chipped away at the self-confidence of the entire nation. The latest in a long line of Westminster's Scottish politicians, to enter the fray in the current debate on the referendum, is Alistair Darling, Chancellor in Gordon Brown's government until Labour lost the election in 2010. According to Mr Darling, Scots would be "taking a massive risk" and the "downside of independence would be enormous". As someone who was at the centre of government from day one, in Blair's various governments, closely associated with the policies which have helped to create the current crisis in the UK economy, that is a bit rich, even for a Westminster politician.

A close associate of Gordon Brown's and one of several Scottish Labour MPs who held office continuously from 1997 right through to 2010, he knows where the bodies are buried. He admits in his memoirs to having had a secret meeting with David Milliband to discuss what to do about Gordon Brown, in the latter stages of the Labour government, admitting they should have taken the decision to remove Brown. He also admits that the bitter battles between himself and Brown stripped Labour of its electoral credibility at a time when he, Milliband and others were allegedly concerned to cut public spending in order to reduce borrowing. His tenure of office as Chancellor was too short for him to make any serious impact on the economy but he introduced three budgets, none of which reversed previous mistakes and, having been at the heart of government from 1997, he was as responsible as the rest of that crowd for the debacles they created.

In the early years, Brown was given  an easy ride by the media. Mr Prudence could do no wrong but history will have an entirely different assessment and, it is in light of the record of not just Darling but the entire government, packed with Scottish MPs, holding the highest offices of state, that Scots should determine whether or not anything Mr Darling has to say is worth listening to. Scots in general and Scots Labour in particular love to portray themselves as more caring, more socially conscious and certainly more left-wing than our southern neighbours. Gordon Brown, that son of the manse, had a reputation as someone from the mainstream of the Scottish Labour heartlands, committed to social justice and the re-distribution of wealth to the less well off in society. Does his record in office and his economic reforms bear any relationship to those lofty ideals or, were the ideals long gone by the time he had achieved the highest office in the land?

In Brown's Mansion House speech of 2007, he had been Chancellor for longer than any other holder of the office and he had this to say to the financial services industry, "I congratulate you on these remarkable achievments, an era that history will record as the beginning of a new golden age for the City of London - I believe it will be said of this age, the first decade of the 21st century, that out of the greatest restructuring of the global economy, perhaps even greater than the industrial revolution, a new world order was created." According to his own assessment, he had already banished "boom and bust" and now, his deregulation of the banks and financial services industry, had created reforms which had outdone the effects of the industrial revolution. Delusional or what? In the same Mansion House address in 2004, he had told the same attentive audience of financial highflyers and power brokers, "In budget after budget, I want to do even more to encourage the risk takers." We now know who those risk takers were and the impact their risk taking has had on the economy. It is a far cry from Labour's alleged commitment to the under-priveleged.

Brown's reforms have had an enormous impact on the UK economy, which in turn has had a knock-on effect on Scotland, but some have had a far greater impact than others, and went far beyond what was promised and invariably to the detriment of the country. He was only weeks in office when he introduced the reform which has effectivley destroyed the pension industry in this country, abolishing tax credits on dividend income. It is estimated that this reform alone, has taken £150 billion in tax from pension funds, leading to the winding up of the vast majority of the final salary schemes operated by the largest companies in the country. The reaction of companies to the reduced returns from their contributions, was to wind up the schemes; while the reaction of those with personal pensions has been to save less, preferring other alternatives. The result has been to create the fear that entire generations will face poverty in retirement and to create antipathy to those in the public sector who have come under increasing and quite unfair attack for having what have been termed, again unfairly, "gold-plated pension schemes." The one group whose pensions remained unaffected is MPs.

Brown and his advisers considered gold to be a lazy asset, which earned nothing, therefore decided to get rid of 395 tons of it in 17 auctions between July 1999 and March 2002, earning the Treasury $3.5 billion at an average of $275.6 per oz. It is widely predicted gold will reach $2,500 by the end of this year and around $8,000 within 3 years. Even if it reaches the former, that is over nine times the value at which Brown disposed of it. But Brown will forever be known as the Chancellor who set in train, the reforms which are responsible for the crisis in which we now find ourselves. His appreciation of the proper place of financial services in the economy and his understanding of the impact of his reforms has always been suspect. He was given an early warning of what could happen when regulation failed. In 1998, he was informed that Equitable Life was in dire trouble but over the next two years neither he nor the FSA did anything about it. In fact the company was allowed to continue to advertise and collect premiums and investment capital right up until it closed to new business in 2000.

At that time I wrote a regular financial column and warned potential investors to be very careful, an act which prompted an official complaint from Equitable Life. By that time they were already too close to the wire and nothing came of it but, if the financial world was aware of what was going on, why did Brown and the FSA watch, and do nothing until the entire edifice collapsed, causing over 1 million clients to lose 50% of their pension funds. The Labour government's behaviour in the aftermath was nothing short of despicable, refusing to accept repsonsibility until forced to by the court. They still refused to pay compensation and thousands died over the next decade, still fighting to get what was due to them. Brown really did believe he had set up a new age when he deregulated the City, creating the FSA as a "light touch" regulator which, when it came to the banks, had no touch, no feel for and certainly little or no understanding of the risks that were being taken.

Many of Brown's reforms were no more than smoke and mirrors; PFI where government agrees to pay back borrrowing in 30 years and the debt is kept off the books; camouflaged inflation by changing the measurement from RPI to CPI; changed the timing of the "economic cycle" twice to change the measurement of the cycle and make the statistics look more favourable. He was an expert in the use of "fiscal drag" where failure to change annual tax allowances, can increase the amount of tax taken without changing tax rates. All in all Brown's reforms are the direct cause of the almost total collapse of much of the UK banking system, with the country's biggest bank, RBS, being taken into public ownership, together with Northern Rock and almost 50% of the Lloyds Banking Group, the aftermath of which is still being played out.

What did all of that do to Scotland, given that Westminster still controlled the economy? GDP figures showed that Scotland fell into formal recession in the first 3 months of 2002, five years into Brown's tenure of office. The Scottish economy had been underperforming the UK economy for some years and in the 2nd Quarter of 2002, GDP growth was 0.3% as opposed to 0.6% for the UK. Scottish growth between 1995 and 2002 averaged 1.9% per annum, as opposed to 2.7% for the UK. Scotland was more reliant on manufacturing industry than the rest of the UK at that time and exports in engineering fell from £13 billion in 2001 to £10 billion in 2002. The climate at the time was not conducive to sustain the economic mix that Scotland had in electronic engineering and in the 18 months prior to to 2002, both America and Japan had stopped investing. Brown reacted by imposing an "energy tax" which was predicted to cost Scottish manufacturing £90 million in 2001 and actually cost the industry £143 million in the first year. He topped that off with a 10% hike in corporation tax on North Sea oil companies, placing in jeopardy the development of marginal fields. The then First Minister, Jack McConnell, was moved in September 2002, to ask the dismal Jimmies _ and he was not referring to Nationalists - to stop talking Scotland down.

Alistair Darling held senior office from the time he was appointed by Blair in 1997, to the office of Chief Secretary to Treasury, a post he held until he took over as Secretary of State for Work and Pensions the following year, a post he held until 2003. He then combined the posts of Transport Secretary with that of Secretary of State for Scotland, until he was appointed Secretary for Trade and Industry in 2006, holding that post until being appointed Chancellor in 2007, the post he retained until Labour's defeat in 2010. In his first budget in March 2008, he allowed Brown's intention to abolish the 10p rate of income tax to stand thereby punishing 5 million of the lowest earners in the country. In reaction to the criticism this caused, he raised the tax threshold and borrowed another £2.7 billion to pay for it. So much for cutting back on debt. His announcement of £20 billion of new spending, earned him a warning from Mervyn King at the Bank of England about public spending. He increased NI by 1%, his department managed to lose the personal details of 25 million citizens, said to be worth £60 million on the black market and in his final budget, he was roundly criticised for what was termed a "pre-election con", when it was discovered that he had set aside money for only one year, to cover increases in benefits he had announced.

Darling recently called Alex Salmond a "complete fool" for endorsing the RBS takeover of ABN AMRO, the purchase of a Dutch bank loaded with toxic debt, which helped to destroy RBS. RBS was in competition with Barclays Bank, which was advised in its attempt to buy ABN AMRO by one, Naguib Kheraj, who was just as keen for the takeover as both Fred Goodwin and Alex Salmond. Barclay's bid failed and Kheraj was appointed as a special adviser to the FSA. Was he also a "complete fool" and when did Darling decide that Salmond and Goodwin and, by extension, Kheraj, were all fools? If his opinion of them was so low, why did he not stop the purchase, which he could have done as Chancellor? Why was Kheraj appointed as a special adviser to the FSA, fool that he was? He was at Barclay's when Barclay's tax avoidance schemes came to light in 2009 and it was learned the bank owed HMRC £500 million, which in itself should have disqualified him from any government position.

Perhaps Darling's worst act as far as I am concerned, was his use of the House of Commons' Additional Cost Allowance, or "Second Home Allowance" to dodge paying Capital Gains Tax. The scam is now well known, where MPs were allowed to designate one of their homes as their main residence and paid for their "second" home with expences. The "smart" ones "flipped" their homes so that they changed the main residence when about to sell one of their houses, thereby avoiding CGT. Darling "flipped" his home four times in four years, as cynical and despicable a use of the rules as it gets. His only defence was, "the claims were made within the House of Commons rules." 

If some Scots really are concerned about the potential financial costs of independence, if £500 in their pocket is sufficient to persuade them to vote for their country to be a nation state again, they would do well to take little or no heed of anything that is said, any warning they are given by Messrs Brown, Darling, et al. The economic record of the Blair regime, packed as it was with Scots MPs, is nothing to be proud of and if we are to learn anything from it, it is to avoid taking advice from those responsible for it.

Monday, 12 March 2012

More Of The Same?

My frequent return to the topic of an independent Scotland's currency, is invariably prompted by the attempts by the SNP to persuade the people of Scotland that retaining sterling would have no adverse effects on either Scotland's economy, or our independence of action, as we are forced to address whatever economic circumstances we face. Within the space of approximately seven days, the First Minister Alex Salmond, has been questioned by both Andrew Neil and Isobel Fraser of the BBC about the inconsistencies in the party's policy on the currency. On each occasion, the First Minister has insisted, that not only would a currency union with sterling, with the Bank of England as the bank of last resort, have no impact on our fiscal policy but that control of fiscal policy, "really is independence in the modern world." In a previous world, Alex Salmond was a professional economist with the RBS, therefore I find it difficult to accept that he actualy believes that. If he does, his naivete is quite astonishing and, if he doesn't, he is deliberately trying to mislead the Scottish people. What I find equally mystifying is that none of his advisers take him aside and have a wee word in his ear.

In each interview, he has attempted to explain the current failure of the euro zone in terms of the attempts by the ECB to devise a system of interest rates which would accommodate "productivity rates as diverse as those in the German Rhur and the Southern tip of Greece". He then claimed that productivity rates in the UK are so similar, that a currrency union which included the countries of the British Isles would pose absolutely no problems for an independent Scotland. Both statements beg a number of questions but they are not the only statements by Mr Salmond that have played fast and loose with the facts. Unfortunately neither Andrew Neil nor Isobel Fraser saw fit to ask any of the more obvious questions that were begging to be asked. Mr Salmond has used the line for some time now, that control of fiscal policy is what matters "in the modern world"; suggesting that it matters little which central bank controls Scotland's monetary policy. He has also claimed on one occasion, that "67 countries in the rest of the world have currency unions "more or less the same" as the one he is proposing with sterling, although he had to rectify that statement within 48 hours.

If we look at the policy positions adopted by the SNP over the years, the inconsistencies become very obvious. For many years the SNP argued that London's control of Scotland's monetary policy rarely worked to Scotland's advantage, insisting an indpendent Scotland must "have control of its own money and interest rates". It then switched to supporting the Exchange Rate Mechanism (ERM) although that was simply a tighter version of the old Bretton Woods Agreement and did not involve surrendering control of the currency. However, on the setting up of the euro, the party quickly changed policy to support joining the new currency, despite the obvious contradictions. If London control of the Scottish interest rates was unsuitable, when only three countries and a province were involved, how could it be argued that interest rates set by the European Central Bank (ECB), would possibly be suitable, particularly when it had to consider 17 different and diverse economies? The SNP's rather tame explanation was that "we would have a seat at the top table". Salmond's explanation for the failure of the euro viz. the different productivity rates between the German Rhur and the Southern tip of Greece (nonsense) were just as obvious when the euro was set up in 1999 as they are now. Why did he and the SNP not notice that fact in 1999, or did they simply not understand the implications? Plenty of others did and were not slow to tell the party. Alternatively,  is Salmond's current explanation just another attempt to fob off his questioners?

If similar productivity levels will ensure the success of a currency union with sterling, what is Salmond's explanation for the unsuitability of monetary policy in Scotland for much of the post war period and why was the SNP traditonally so hostile to London's control, but were quite happy to accept Brussel's control despite the productivity levels being so diverse? The only reasonable conclusion is that the change in policy was dictated by political rather than economic considerations - Brussels was not London. Otherwise, his explanations just do not stand up to examination because they do not make sense. There are 192 nations as members of the United Nations, many of them established since the end of the Second World War and the fall of the Soviet Union. If, as Salmond has claimed, "control of fiscal policy is really independence in the modern world," why are there only 67 countries out of 192 in some form of currency union, and some of those unions are of an "informal" nature? Why do small countries like Norway, Switzerland and New Zealand persevere with their own currencies, if the same or similar results could be achieved by joining the euro or, in the case of New Zealand, having a currency union with Australia, a much larger country?

Salmond continues to insist that the Bank of England is independent of the Treasury, that it would not control Scotland's fiscal policy and, that any agreement to which Scotland would have to adhere would be no more restrictive than a responsible country would impose in any case. The Bank of England's "independence" can be overstated as the government sets inflation targets and, if those targets are not met, the Bank is compelled to provide the government with an explanation. The Bank of England is a creature of the UK government, with its various powers and responsibilities within the gift of government as evidenced by the granting of its "independence" and removal of its control of the banks by Gordon Brown, control which is shortly to be returned by David Cameron.

As I have pointed out several times on this blog, the euro is driven by politics rather than economics and when we see what has happened in Greece, in terms of the cuts which have been imposed and in Italy, which, along with Greece has had its very government imposed, it must be obvious to any observer that there is no limit - at least none that has been reached - to the level of austerity measures which transgressing members will be required to bear in order to prop up a currency union which has already failed. The history of the currency union in the EU is one of failure, with the euro being simply the last in a line of failures. When the Bretton Woods agreement, set up after the War, failed and the major countries switched to floating exchange rates in 1971, the Common Market, as it was then, established the "Snake in the Tunnel" as its first attempt to keep the fluctuations of the various currencies within a band of 2.5% either side of par. That lasted only two years until 1973, when the US dollar was allowed to float freely. The European Monetary Zone (EMS) foloowed but that had also collapsed by 1977, by which time the D Mark had become the dominant currency, with only the Belgian and Luxembourg francs remaining tied. Then there was the ill-fated Exchange Rate Mechanism (ERM) from which the UK was forced to withdraw in September 1992, followed a day later by Italy, a fact which is rarely if ever even noticed, although the entire system of the ERM collapsed when the currencies were allowed to float 15% either side of par only 18 months later.

The Stability & Growth Pact was set up in order to avoid the kind of debacle which has brought the euro to its knees. The Germans insisted it be established because it did not trust its southern European member colleagues to be as fiscally prudent as it was and it contained the provisions which Salmond has suggested any responsible country would wish to follow. He is perfectly correct and, in ideal situations the vast majority of countries would be quite happy to comply, but how often is any country faced with ideal economic conditions? The Pact required countries to have annual budget deficits of no more than 3% of GDP, with National Debt no more than 60% of GDP but there is not a single member state is anywhere near complying to that extent. It is now well known that countries such as Greece, Italy, Spain and Portugal could not meet those requirements when they joined but neither could Belgium and the Netherlands. Both Germany and France have run substantial deficits for years and we all know the critical situation faced by Greece et al. In other words, politics has always determined both the nature and direction of the euro and it will continue to do so.

In his research paper "Deja V-Euro - The history of Previous Currency Unions" Sam Vaknin records the failure of currency unions throughout history, pointing out that 120 years ago, Walter Bagehot predicted, "Before long, all Europe, save England, will have one money" at a time when there was heated deabte about whether there should be a single European currency. There is a long history of discussions, debates, attempts to establish and even short term successes in establishing currency unions. The very few which have survived always entail the complete surrender of monetary policy and, according to Vaknin, "a sizeable chunk of national sovereignty". In my many spats with the cybernats and my debates with SNP members on the question of the euro and the suitability of maintaining sterling, invariably I have been asked, "Are you saying that Germany and France are not independent?" That is exactly what I was saying - twenty years ago, but it has needed the current crises to concentrate minds on just how much sovereignty is surrendered in a currency union such as the euro and, the one proposed by the SNP with Sterling. Is it going to take another crisis before the party finally admits the reality, makes some effort to look further ahead than the next council elections and asks the most obvious question of all - why is the SNP so opposed to Scotland having its own currency?

Friday, 9 March 2012

So, Where Do We Go From Here?

The latest YouGov poll is said to be good news for Alex Salmond and the SNP strategy of playing down the level of separation from the rUK that Scottish independence would mean, and a bit of a kick in the teeth for the so-called "fundamentalists". Perhaps, if we take some of the findings in the poll at face value and, give each question equal weight in terms of importance to the meaning of independence, there might be some truth in what "they" say. However, as is well established by now, "weight" will be given by each side in accordance with what each actually wants the poll to say and not what it actually says. The poll drew comparisons between the answers given to the same group of questions in July 2008 and between 22 and 24 February 2012, by a random sample of 1,053 Scots.

What the poll seems to say, is that since the SNP came to power, Scots have become "more British" in their outlook, as expressed by their preference for British institutions. This is hardly the kind of responses that even the "wettest" of SNP supporters is likely to welcome, never mind the hard line "fundies" both inside and outwith the party. I doubt there will be many SNP members who will relish the thought that after five years of SNP government, where the party is alleged to have pushed the idea of "independence" and displayed enough competance in office, to persuade even their hardest critics that there is enough talent in the party to make a decent fist of governing an independent Scotland, the party has made the prospect of independence more remote. They have certainly done their best to take the "scariness" out of the possibility of independence, by arguing that not a lot will change.

Perhaps one of the consequences of such a strategy, has in fact been to persuade Scots that keeping the pound sterling is perfectly feasable, even although a majority of Scots say they want complete control of our finances or taxation at the same time. It is not just worth while but obligatory, to examine in some detail, how the various arguments are being presented to the Scottish electorate, as the presentation of those arguments will undoubtedly have an enormous effect on the outcome of the vote. For example, the latest GERS report shows that Scotland is in better shape than the UK but is that how it was reported? Not quite, at least by the Daily Mail, which heads its take on the matter, "£11 billion wake-up call for Salmond - Economy plunges deep into the red." In contrast The Scotsman, not exactly a fan of either the SNP or Alex Salmond, took a slightly different line, "Scotland better off than the UK with 'only' £10.7bn overdraft." The Mail made not a single mention of the more precarious position of the UK, where the budget deficit for 2010-11 was 9.2% as opposed to Scotland's 7.4%. We can expect no less for the next two years, as the Unionist camp spin and lie to their hearts' content, while demanding guarantees from the SNP and the National Movement as a whole. Unfortunately, The Mail is the most popular paper in Scotland while the circulation of The Scotsman is dropping.

For a number of years I wrote a regular column for the Scots Independent and in the August 1986 edition I wrote, "Unless Scots can be persuaded to look at Scotland as something more than just a meal ticket, then freedom from the suffocating Union with England will forever remain a dream. The Scottish dimension must include an awareness, and more importantly a recognition, of a distinct Scottish culture, of Scottish institutions and of Scottish history - both political and economic. Above all there must be a desire that the spiritual and territorial integrity of the Scottish nation should remain intact." After 26 years I still believe that to be true but according to the YouGov poll, there is less concern for Scottish institutions now and more concern about Scotland's ability to "afford independence". Is that true or is that just one interpretation?

The first point to note is that not all the questions will carry the same weight of importance, either in peoples' minds or for the success or failure of independence. For example, whether or not we can actually be allowed to screen Coronation Street, is hardly likely to determine whether independence is feasible, but the currency most definitely will. Membership of the EU, out or in, is rather more important than what we should do about our football league. On the other hand, having the monarchy would make no difference to whether or not Scotland could make a success of independence, but it matters a great deal to many Scots, to such an extent it could determine the direction of their vote. The second point is that the nature of the questions themselves, are couched in terms that favour a UK or British preference and thirdly, do the respondents actually understand the contradictions in some of the answers? For example, what is the difference between "Status quo" favoured by 33% and "Tax and spending powers but as part of the UK", favoured by 36%?

On the question of the currency, in 2008, 20% of respondents wanted to join the euro but that figure has dropped to less than 5%, while those who want to keep the pound sterling has gone up from 67% in 2008 to over 80% in 2012. That is hardly surprising given the debacle in the euro zone and the sheer weight of media attention it has attracted. Equally, it is hardly surprising that support for a Scottish currency has gone up, but to a paltry 10% as it is never mentioned as an alternative. But do the respondents understand that keeping the pound sterling and an independent fiscal policy, with no funding from Westminster, will be at best problematic and in a "worst case scenario" could cause serious problems and would inevitably inhibit independent action by the Scottish government, the supposed intention behind the desire for fiscal powers?

Commentators have opined that the responses to the poll explain the "softly, softly" approach by the SNP and the party's insistence on emphasising the areas of "no change" even if Scots vote "yes" in the referendum. The consensus of opinion is that the party is making use of its own polling agents and focus groups, tapping into the fears and preferences of the electorate, so that it can present a programme for independence which will give assurances that the Queen, the currency, the social union, and even Corrie and East Enders will remain as part of the "independent Scottish state". I have no doubt that there is more than a grain of truth in that but it means that SNP policy is the product of opinion poll findings and focus group preferences, rather than principle. It may bring the party electoral success but will it bring Scotland independence?

Monday, 5 March 2012

Oh What a Tangled Web We Weave

For Nationalists and other referendum watchers, it has been some weekend. It can't be often that Scotland has had the setting up of two seperate Commissions to examine our relationship with the rest of the UK plus, a TV interview with Scotland's First Minister, to allegedly discuss the same topic. It meant watching a fair bit of TV, for those not directly involved, and there was always the welcome diversion of the fitba. For all the wind and other stuff that has been generated by the Unonist parties over the question of the independence referendum, with increasingly hysterical demands for more detail from the SNP, the party conferences highlighted the significant fact, that none of them has a clue what they have to offer as an alternative. There have been plenty of threats - the usual answer to independence - of all the ills that will befall the Scottish people, if ever they dare to dip even a toe in the turbulent waters of, what other nations see as a natural state of affairs - freedom and independence.

There have been mixed reviews of the performance by Johann Lamont, leader of the Labour Party in Scotland but, her interview with Isobel Fraser on Sunday will have done little to enhance her reputation for being able to think on her feet. She found it difficult to argue why Scotland should not have control of corporation tax, other than to contend that London, because of its size and financial clout, would provide too much competition and it would not be in Scotland's interests to become involved in such a competition, to see which part of the UK could have the lowest taxes. Her answer to any question which delved into the alternatives to independence the Labour Party might offer, was "a Commission" chaired by herself. This would look at the relationships between Scotland and the rest of the UK and report - some time. The same solution, it might even end up as the same Commission, is offered by the Lib/Dems, although in the original, this version is to be chaired by Ming Campbell. All of a sudden, parties that have been calling for a resolution to the referendum question, which have been very quick to say "the SNP can't tell us what it means by independence" can offer no answer to the question, "what are you offering as an alternative?" other than the favourite of all parties and governments which want to get rid of a bothersome item, a Commission and some very, very long grass.

I was looking forward to Andrew Neil's interview with Alex Salmond because I thought that if there is anyone who would pin Salmond down on the important issues, such as currency, it would be Neil. Unfortunately, the modern media obviously has no time to wait for answers to one question, before it is demanding an answer to the next and the next and the next, so that we never get an answer to any question. I have no idea what producers think is achieved, other than the frustration of the listeners and viewers, at least some of whom actually want to know the answers. Is it better to have a Paxman ask the same question fourteen times, and know the politician on the receiving end is evasive, or have him ask six questions, get an answer to none of them and be left with the impression the politician is evasive? There were several questions I would have liked to see Neil develop with Salmond, not least the one about legal advice, more of which below, but the First Minister was let off the hook - again, on both the currency and the legal advice the SNP has been given.

If Scotland is to be independent, I hope it will be a particular type of independent country, as will everyone else, not all of whom with the same aspirations. I also believe that there will be one thing that very few Nationalists want to see - and that is that the government of an independent Scotland is a smaller version of Westminster, with many of the same faults. I firmly believe that the Scottish people should not be "conned" into independence, that they are allowed to embark on that journey with their eyes wide open, prepared to face whatever is in front of them. Alex Salmond is now being asked some of the questions on Scotland's currency that he and the SNP, should have been asked a long time ago, but his answers still contain a great deal of evasion and "non-answers". Andrew Neil put it to Alex that the SNP had argued for years that London's setting of Scottish interest rates, was not to Scotland's advantage. Salmond's response that times had changed and the levels of interest being charged were not as onerous, was completely devoid of the principles involved or what would happen if interest rates increased. His comparison of the currency union between Luxembourg and Belgium, as some form of validation for having a currency union between Scotland and London begged so many questions, it was a classic non-answer. When it was pointed out to him that the euro was found to have failed because it lacked the fiscal control necessary, his response was to assert, "I disagree, the euro tried to mould the Rhur with the southern tip of Greece, where productivity levels are so different." Does he think the productivity levels in London are the same as those in Caithness? Both that question and Salmond's response had little to do with the failure of the eurozone, but this type of flippant throw-away respnse is what has passed for serious discussion and unless the SNP comes up with some better answers to topics such as the currency question, they are going to come a cropper. More importantly, so will the campaign for independence.

 I was suprised that several tweeters, who are supporters of independence, took issue with my assertion that the SNP should come clean about the legal advice they have received anent an independent Scotland's right to automatic membership of the EU, if Scots decide they want to be independent. I have a number of reasons for taking this view, not least my opposition to the secrecy with which governments in this country have conducted their business, frequently to the detriment of the rest of us and, my opposition to the government of an independent Scotland acting in the same way. I find it quite astonishing that Nationalists should argue that governments should not be asked/forced to divulge their legal advice and its source because "lawyers would not give advice in the future". The source of government advice is generally the government's own lawyers and as such, are government employees and, will do as the government tells them. Before looking at the more detailed reasons for my opposition, a general overview of the current situation might help.

The SNP strategy is to sell the idea of independence as something which will change almost nothing, thereby making it sound not just easy to attain but, in the eyes of some, hardly worth attaining. Thus, an "independent" Scotland _ SNP style - would retain the Queen, the currency, share army bases, be a member of the Commonwealth, be a member of the EU and generally, keep as much of the existing arrangements as it is possible to keep. The Unionists want to make independence sound as difficult as possible, hence every day brings another scare story from the ludicrous "we might not get Eastenders" to the threatening "the rUK will not build navy ships in a foreign country". One of the threatening variety is that an independent Scotland would not be given automatic membership of the EU therefore, according to Unionists "thousands of jobs will be lost, no one will speak to us, we will need to show passports at Berwick" and so on. The SNP's rejoinder is that Scotland would be given automatic membership AND - they have the legal advice to prove it BUT not only will they not give its source, they won't say what it is. Westminster has said what the advice is, but won't give its source, beyond saying it came from its own lawyers. Both positions are equally ludicrous and should be totally unacceptable.

For a start, there is no precedent in the EU for the legal situation that would be faced, if Scotland decides to become independent. The UK government advice, published in October 2011, states, "Scotland is only part of the EU by virtue of the UK's membership. If Scotland were to leave, it would not automatically assume membership of the EU. Treaties (on which EU is based) do not provide for an increase in the number of states, other than by Treaty amendment". Since the advice came from the government's own lawyers, it is hardly surprising that this was the advice, but the government will not say whether it came from the Attorney General (also an MP) the Treasury Solicitor (most senior lawyer) or the Foreign and Commonwealth lawyers, who are experts on international law. Salmond's argument to Neil that governments do not give their sources just does not wash, it is nonsense and gives governments the "right" to withold information right across the board and, given the occasions in this country where secrecy has been shown to be harmful to the interests of the UK or Scotland, I am surprised that any nationalist would argue in favour of retaining it. It would make more sense to argue the United Kingdom will not exist when Scotland leaves, but those waters have been muddied by the SNP's insistence that it will, in order to argue that an independent Scotland will remain as a monarchy.

When Heath negotiated the UK's entry to the EU, he bargained away the British steel industry (BSC), with devastating consequences for the Scottish steel industry but so determined was he to keep that a secret, he slapped a D Notice on the details of the negotiations, so that they became a "matter of National Security". It took thirty years for those details to come into the public domain but there is little doubt they would have had a serious effect on his campaign for UK membership if the British public had known about them at the time. Then, there is the Dodgy Dossier and the equally dodgy Lord Goldsmith and his advice to take the UK into the invasion of Iraq.  As Attorney General, he was "persuaded" to change his mind, which rather knocks on the head any argument that lawyers will not give advice in the future, if their advice is made public. It should also be remembered that Elizabeth Wilmshurst of the Foreign Office, took the honourable way out and resigned in protest at the war in Iraq. Of course the example of government secrecy that no Nationalist should ever forget, is the McCrone Report which, like the sell-out of BSC by Heath, took thirty years to surface.

Those issues have been so enormous that they impacted on all of us, first by membership of the Common Market and the consequences of same, the unbroken string of lies and the continuous deceit of successive Westminster governments about the size of the oil resources to which an independent Scotland could and still can, lay claim and, the iniquitous war in Iraq with the deaths of countless thousands of Iraq's people. That level of deceit is unforgiveable and those are only three of the examples of many that could be given, but there is a simlar type of deceit that goes on daily and which can, on occasion, have enormous consequences for individuals and families. Anyone who has been falsely accused of a crime, who has been the victim of a miscarriage of justice and who has tried to get the information which would allow them to prove their innocence, will find out very quickly what government secrecy really means, particularly when it involves the testimony of so-called "expert witnesses". The examples of the "Birmingham Six", Angela Canning, Sally Clark, John Brown are so well known they need no further explanation here, but there are many others where the false allegations have never been resolved and much of the information that could help, is denied the falsely accused, leaving them in a state of limbo. To add to the frustration, those responsible for witholding the information are also immune from prosecution, which ensures their conduct can never be examined. Supporters of independence should be very careful of allowing that system to be imported to an independent Scotland.

Thursday, 1 March 2012

SNP Should Stop Playing Games

Political analysts like Professor James Mitchell and John Curtice, together with political journalists, several years ago used to say the battle between "gradualists" and "fundamentalists" in the SNP, had ended. The terminology, barely accurate when it was first coined, is hardly ever used now but the arguments which it was supposed to represent look as if they are about to be resurrected. As someone who was dubbed "the Godfather of fundamentalism" by Ian Macwhirter, I have a personal interest in making sure that the terminology, if it is to get a new lease of life, is at least half accurate.

Jim Sillars once said that the most useful tactic used by political activists, is to hang a label round an opponent's neck, then everything that is said can be ignored, or the label attacked, rather than the political arguments addressed. I never referred to myself as a "fundamentalist", I was quite happy being a Nationalist but opponents inside the SNP liked to claim that Nationalists who took my particlar stance in the debates on devolution, which bedevilled the party at the time, stood for "Independence or nothing". That was never the case, but that was much easier to attack than "Independence nothing less", which was a much more accurate description of the political stance we adopted. Then, it was claimed "Fundamentalists" were right wing, particularly if they also opposed the EU and the euro (they were invariably said to be anti-European and narrow Nationalists) as opposed to the "left-wing" (and therefore more righteous and "internationalist") "gradualists" and pro-EU and euro, members of the party. Lazy journalists lapped it up and so the myths were born.

The debates, were catagorised as arguments between those who would accept nothing but independence, which had to be achieved in one step by a unilateral declaration of  independence (fundamentalists) and those who wanted to take a step-by-step or gradualist approach. A devolved parliament or assembly would be set up, followed after a period of time in which Scots would "prove themselves" to be capable of looking after their own affairs, by a stronger parliament with more power until one day, in 100 years perhaps, Scotland would be an independent nation state once again. In fact, the debates were about strategy and tactics, not the final destination, which was agreed as being "independence" by the vast majority of the SNP membership at that time. There were always a few who were prepared to settle for less but they were in the minority, although the impression given now, is that there is a far greater proportion of the party membership, including some of the current leaders, who would be prepared to settle for a great deal less than independence. The difficulty the party has in actually defining what it means by independence, its readiness to call every position "independence", no matter how diluted, suggests the final destination is no longer the "restoration of sovereignty" or the establishment of an independent Scottish nation state.

The so-called fundamentalists argued that a Scottish assembly or parliament with limited powers, would never be set up by Westminster, if that was what was campaigned for. Whatever demands were made by the SNP, would be diluted by Westminster, which would grant only as little as they could get away with. It made more sense for those who were prepared to settle for devolution, or who saw devolution as a first step, to campaign hard for independence because if the pressure on Westminster could be maintained and, more importantly, if the Scottish people looked as if they were prepared to vote for independence, Westminster would offer something less, something the devolutionists would find acceptable, as a first step. The rest is history, as they say. Now, it looks as if the debates about the final destination, are a bit more important than they were the last time and that what is being portrayed as a debate about strategy and tactics, is actualy a debate about rather more; in fact a debate about independence itself.

Elsewhere in this blog, I have argued that using sterling after a "Yes" vote in the referendum on independence, would be a mistake. I have also given the reasons why it would be a mistake, reasons which have been amplified by other economic commentators, some who are sympathetic to the cause of independence. I have criticised the SNP's use of "Fiscal autonomy" as a substitute for independence and fortunately, the crisis in the eurozone has highlighted the problems such a policy would create. Elements inside the SNP are very concerned to emphasise that even if Scotland voted "Yes" in the referendum, we would still be British, because we "would share defence bases and the monarchy". Alex Salmond himself, has gone to great lengths to argue there would still be a United Kingdom, of which an "independent Scotland" would remain a part. In fact, a non-SNP member of the electorate might be forgiven for asking, "Why are we having a referendum if so little is to change and independence means so little?"

As fiscal autonomy began to fall out of favour, Devo-Max became the next favourite, although it had to be defined. Now, Devo-Plus, which has been defined to a greater degree, seems to be the next favourite and is depicted as being less than both fiscal autonomy or Devo-Max, but more than the current range of powers enjoyed by the Scottish Parliament. None of this augurs well for what will finally appear on the referendum ballot paper. Both Jim Sillars and Gordon Wilson have made known their opposition to the inclusion of Devo-Plus on the referendum ballot paper, Sillars arguing that it could kill the prospect for independence completely. It is hard to argue against that point of view and we have come full circle with debates within the SNP about the strategy and tactics to be employed in the pursuit of - well what exactly?

Salmond and the SNP leadership is doing its best to promote the idea that the party is in favour of independence and only independence while, at the same time, it is promoting the inclusion of some kind of second question on the ballot paper, but trying to lay the blame on somebody else. However keen Salmond might be to include a second question on the ballot paper, does it make tactical sense for the SNP to argue for its inclusion? An alleged "source" has told The Scotsman the SNP would settle for Devo-Plus if the people of Scotland voted "No". Party activists have attacked "the Hootsman" as usual but no official denial has emanated from the SNP leadership and until it does, we have to assume the "source" is correct. This kind of selective leaking to and use of, the media, is such a well known tactic of the well oiled SNP press office, I have absolutely no doubt it is true. In fact, I have held the opinion for some years that the current leadership of the SNP would be only too happy to settle for a great deal less than the restoration of sovereignty to the Scottish people and an independent Scottish nation state.

That is a personal point of view but I have provided the reasons for holding it on a number of web sites and in a number of newspaper articles. Unfortunately, the closer we get to the time when the referendum will have to be held, the more convinced I become that my fears are well-founded. Cameron has already promised, for what it is worth, greater powers for the Scottish Parliament if Scots vote "No" in the referendum. Since he has declined to say what the powers will be, we have no idea if they would be greater or less than Devo-Plus, therefore, is there any good reason why Scots should believe him? There is only one way we will ever find out and that is to give Scots the opportunity to vote for independence. If Scots genuinely want independence, they will vote for it. If, on the other hand, they want something less than independence, if they still need the comfort blanket, they will vote "No", on the understanding that Cameron will produce more powers for the Scottish parliament. What possible reason can there be therefore, for including any kind of second question on the ballot paper? Why is Salmond and the leadership of the SNP being so coy about the second question?

It is argued that it would be a denial of democracy to deny Scots a choice of alternatives to independence. To my mind, that argument carries little weight in light of the fact that the SNP was elected on a platform of providing an opportunity to vote in a referendum on independence, NOT 57 different varieties of something, anything, less than independence. The raison d'etre of the SNP is supposed to be the restoration of independence and this referendum gives the party an opportunity, as well as the electorate, to fulfil that aim. Scots do not need to have the agreement or the permission of the rest of the UK, to decide whether or not Scotland should be independent; that is a choice for the Scots and only the Scots. However, if the present Devolution Settlement is to be changed in any substantial way, we cannot have a unilateral declaration of increased powers for the Scottish Parliament, that is the preserve of Westminster.

For Salmond to introduce any kind of second question on the ballot paper, must call into question his sincerity in the pusuit of independence, for the simple reason the tactic is wrong and there is no good reason to have a second question. The Scots need to be asked the straightforward question, however it is worded, "Do you want an independent Scotland?" If the answer is "Yes" we can move on from there, if the answer is "No", we then have to discuss the question of more powers. The discipline in the party in the last few years has been quite extraordinary BUT there is a limit to how far the membership will allow itself to be pushed, particularly on an issue as important as this. Salmond really is playing with fire if he tries to pull a fast one.