Saturday, December 24, 2011
Wednesday, December 21, 2011
Turns out that Francois Baroin, the French Finance Minister, wasn't far wrong last week. The most hated man in the City of London said that Britain was in just as bad financial shape as eurozone countries like France, and that the rating agencies should be downgrading British debt. We have higher inflation, lower growth and larger debts than France which is currently on the downgrade 'list of shame'. Now Moodies has put the UK on credit death watch too.
Thursday, December 15, 2011
The clear implication is that Labour at least are no longer viewing the Calman Commisson report, and the Scotland Bill it inspired, as the last word on Scottish home rule. Or rather, Labour is no longer prepared to go into the Scottish referendum allowing Alex Salmond to have an each way bet on the result, by supporting devolution max and independence. Alexander is unspecific about exactly how far he is prepared to go down the road towards "devolution max" but there is no doubt that Labour is now resolved not to go die in the last ditch defending the status quo, while the SNP adopt the mantle of devolution. I talked with him in the BBC studios on Saturday, and his irritation at the way the SNP have claimed credit for home rule, and made the Scottish parliament their own, even though they boycotted the Scottish Constitutional Convention, is very clear.
If there is a better devolution available, Labour will sponsor it.
This is an astonishing moment. The ground is moving under our feet. If Labour is now contemplating fiscal independence, and though Alexander has not said this, I believe that is what he means, then we are on the verge of a constitutional revolution. Let me explain: the Calman Commission was, in a sense, unionism's last throw of the dice. Professor Calman made what I argued at the time was a compelling argument for the Scottish parliament to have tax raising powers. A grown up parliament must take on the responsibility of raising the money it spends, he said. It must be accountable for its actions, transparent, fair, efficient. However, the Calman solution, a fifty fifty split of income tax, was never very coherent and had all the hallmarks of a Whitehall fudge. Even its supporters have difficulty explaining how it would work, or be an improvement on the present arrangements of a bloc grant from Westminster.
The only way forward from Calman is a form of fiscal autonomy where the Scottish parliament raises the vast majority of the money it spends. This has the advantage of moral clarity, and fiscal transparency. There is no jiggery pokery with revised Barnett Formulas, no deflationary fiscal devices. There will be tax sharing, as there is in all federal arrangements, but the fundamental principle that parliament should be accountable is upheld. Scots would no longer, under fiscal autonomy, be able to blame Westminster for "fiddling the figures". The responsibility falls on the Scottish parliament to balance its books, pay its way, tax as well as spend. Make the hard choices. And they are hard. Fiscal autonomy is no easy ride for the SNP because it's main propaganda message - 'it's all London's fault' - is whipped from under them.
No wonder Douglas Alexander/s namesake, Danny - the Treasury (?) is sounding increasingly desperate. The unionist coalition built around the Scotland Bill has fallen apart. But this is only a recognition of reality. Calman was a victim of the May election, when the SNP won an absolute majority in the Scottish Parliamentary elections. Alex Salmond can do exactly what he wants in Holyrood, and he has made clear he is not going to vote through the Scotland Bill in its present form. Since the passage of the bill requires the consent of the Scottish parliament this has killed the bill because the SNP will simply it. What is Westminster going to do? Impose a radical new tax regime which has been rejected by the Scottish Parliament? Hardly.
Douglas Alexander is a gifted political strategist and he saw the meaning of May long before his Scottish party had woken up from their post election hangovers. It changed everything. Not just the balance of power in Holyrood, but the whole trajectory of Scottish, and British politics. His sister, Wendy Alexander, may have set up Calman but that was in a different age. Labour now faced the danger of being left out of the new order - forced to go down with a bill that has been moved by the hated Liberal-Tory coalition. Labour had no option but to change course, as he tried to tell them in October when he reminded them that they had been "gubbed". If Labour go into the independence referendum chained to a Tory bill they will be gubbed for good.
Wednesday, December 14, 2011
Tuesday, December 13, 2011
David Cameron's decision to take the UK out of Europe will take Scotland out of the UK. The Prime Minister's use of the veto against the EU treaty on budgetary reform looks like the game-changer that the SNP leader Alex Salmond has been waiting for. Attachment to the Union in Scotland is likely to evaporate as Scots realise that they have become an appendage to an essentially isolationist England with a sceptic media saturated with an ugly chauvinism. The hostility shown towards European nations is like a bad version of the hostility that old school Scottish nationalists used to show towards England. Only they grew out of it.
David Cameron's narrow nationalism, putting the interests of the City of London above those of resolving the EU budget crisis, has fatally undermined the moral case for sticking with Britain. If the UK is now a Banker's Union, dedicated to protecting the privileges a delinquent financial elite, what price internationalism, democracy, social welfare or any of the values that were supposed to define the common British project?
The SNP has suffered greatly in the past from accusations that it is a "separatist" party, seeking selfishly to divide the UK, and pit nation against nation. But who are the separatists now?
The argument for sticking with Britain was always that this gave Scotland representation at the highest levels of decision-making in Europe. This is clearly no longer the case. The UK is marginalised in Europe, whatever the Prime Minister may say - a "union" of one against 26. This isolation is the culmination of decades of revanchist anti-Europeanism, which has coincided with the decline in popular attachment to the symbols of Britishness on both sides of the border.
As England turns in on itself, lapsing into a financial parochialism, Scotland turns out - seeking to rediscover in Europe the communitarian values that it believed underpinned the UK. The SNP used to be criticised for demanding "Scotland's Oil", for seeking to grasp the nation's natural resources for itself. Well, Scotland gave the oil away, and now finds that it was used, not for the common good, but to build an evil empire of greed. It surely won't get fooled again.
Tuesday, December 06, 2011
Friday, December 02, 2011
The basic state pension in Britain is worth only 17% of earnings the lowest in Europe, £102 pw for a single person, or just over £5,000 a year. The average in Europe is 57% of average earnings, around £14,000. Even in the Netherlands, the second lowest, pensions are worth twice what they are here. Hardly luxury, but at least it is just about possible to live on it. The UK pension simply isn't enough to live on.
People here are expected to save for their retirement. But the iniquitous means testing that is applied to the pension credit actually discourages people from saving. Which is why so many don't. The average private sector pension is only worth around £20 a week, and yet this can disqualify a pensioner from receiving the pension credit which bumps the state pension from a £102 to £137 for a singe person. And to add insult to injury, this is classed as taxable income - unlike tax credits or interest on an ISA. Britain has the most complicated pensions system in the world, and many people who are eligible for the pension credit don't manage to complete the pages and pages of form filling.
Let the public sector workers keep their pensions - but only if the rest of the working classes are given similar security. The danger is that the majority of workers, who are not employed by the state, and who cannot afford any pensions, will refuse to continue to pay, through their taxes, for the relatively generous pensions of public sector workers. There has to be some kind of equity here.