Who won the phoney war of the independence referendum?

So, who won the referendum phoney war? There was an air of quiet satisfaction among senior Tories at their conference in Birmingham recently.   “Wily” Alex Salmond had been put back in his box, I was told. Forced to drop his devious plan to turn the ballot on Scottish independence into an each way bet in a two horse race that he couldn't lose.

But three hundred miles north, members of the Yes Scotland campaign were also expressing quiet satisfaction. They claim to be more than content with a single question referendum. Nationalists think that Salmond pulled the wool over the UK government's eyes and that he really wanted a single question all along. They can't both be right.

Actually, this is one of those rare occasions in politics when both sides can claim victory. David Cameron can legitimately say that he insisted on, and got, a single straight in-or-out question and that the Electoral Commission will have a say on the wording. Alex Salmond can say that he has won on the 2014 timetable , giving16 and 17 year olds to vote and on ensuring that the referendum is legally binding. The FM will say that he always favoured a single question himself, but didn't want to be accused of disenfranchising supporters of “devolution max”. Opposition politicians will say: “Aye, right..”

Perhaps the real winners are the people of Scotland, who will not only be given the legal power to secede from the UK state - a power denied only last week to the Catalonian people by the government in Madrid - but will be allowed to give a straight answer to a straight question along the lines of:. “Do you wish Scotland to become an independent country” This is infinitely preferable to the obfuscatory nightmare formulations that were put to the people of Quebec in their 'Neverendums' of the last century.

Tory Muff and Jeff routine. Caring Cameron feels their pain.

The Tories under David Cameron have become the masters of the conference Mutt and Jeff routine. All week ministerial Muttleys put the boot into big families on welfare, batter burglars, threaten referendums on Europe, kick the Liberal Democrats in the goolies by rejecting their wealth tax. This all goes down well; red meat for the conference carnivores.

Then on the last day, along comes Jeff, in the form of compassionate Dave, who is kind to animals and gays, and is talks movingly,  about his late legless Dad and by implication all disadvantaged souls. Oozing empathy. Patron of the Paralympic games. And it has to be said that David Cameron does it very well. This was a hard-headed Thatcherite speech straight from the 1980s but delivered in a 'caring' way. He really does sound like he believes in the NHS. He teared up when talking about his late son Ivan.  Not many politicians can introduce real emotion into such a stage-managed event as a leader's address without it sounding cynical.

And technically this was a much better speech than last week's modern studies lecture from Ed Miliband. Cameron can hit all the notes - poking fun at Ed's attempt to don the mantle of “one nation” Conservatism. “Labour: the party of one notion: more borrowing”. He got his lists right: “We remember who spent our golden legacy, who sold our gold, who busted our banks, who smothered our businesses, who wracked up our debts, wrecked our economy, ruined our reputation and risked our future”. (It was Labour in case you were wondering).

Mostly, the speech - like that passage - said nothing at all, but Cameron said it with real passion. He even managed to get the Tory gathering to applaud foreign aid which he said had paid for the vaccination of 130,000 children since Sunday alone. “You, the Conservative Party helped do that”, he said, daring them not to clap, “and you should be proud of what you've done.” He avoided all the difficult issues - gay marriage, the referendum on Europe, the challenge from Boris, “the zinger on the zipwire”. And he didn't mention his Coalition partners once. But he did mention Alex Salmond and Abu Hamza, who were name-checked as if they were public enemies one and two. He promised to win the Scottish independence referendum and expel radical Muslim clerics.

This was billed as a blood sweat and tears speech, and he didn't try do disguise the seriousness of the situation five years into the Great Recession.  He told us that Britain was living on borrowed time as a great commercial nation. That all those enterprising upstart countries, who were recipients of aid money only the day before yesterday, are now battering at the gates. He condemned the old world countries as “fat, sclerotic, over-regulated, spending money on unaffordable welfare systems, huge pension bills, unreformed public services”. Did he mean us?

Well this is the problem, because in the same breath as condemning sclerotic, “old world” countries like ours, he couldn't resist suggesting that Britain was also booming under the Conservatives. A million new private sector jobs have been created in the last 2 years, he said. Though he didn't say how many of these were full time. The PM said that the rate of new business start ups in Britain was faster than ever before in history, though he didn't say how many of these small businesses are those part timers opting to become self-employed for tax reasons. We make more cars than in the 70s, he said, though the firms are foreign owned. and we are “number one in the world for offshore wind”. Somehow these sunny uplands didn't quite hang together.

Of course, all politicians try to have it both ways – it's what they do. But there is more than a danger that this will backfire on Cameron. He knows that the economic policy isn't working; and we know that the economic policy isn't working. And he knows that we know. Take borrowing. It's going up under the Tories as fast as under Labour, in large part because of the failure of growth policies. Those millions of new business start ups aren't delivering real jobs. They are delivering frothy, here-today-gone-tomorrow jobs at the disposable end of the labour market. These aren't the kind of businesses that are going to take on the Chinese or the South Koreans. And they aren't the kind of jobs that are going to restore Britain as a great manufacturing nation.

Austerity isn't enough. This isn't the 1980s. Governments can't just curb employment rights, cut taxes and public spending and expect business to do the rest – unless you want a poundland Britain sinking into post-industrial mediocrity. 21^st Century governments are condemned to be interventionist – just as they have been in those upstart nations. Does anyone seriously believe that the Chinese state banks sit back and leave it all to the market?  Is that how they built 25,000kms of motorway, an entire high speed rail network and the five longest bridges in the world all in the last four years?

I'm not suggesting we concrete over Britain, but growth doesn't happen by itself any more. If we are to exploit Britain's – Scotland's – renewable energy potential, government needs to get behind green energy. And someone needs to tell the Chancellor, George Osborne, who seems more interested in backing shale gas and nuclear power stations that are too expensive to build.   The Conservatives need to realise that Europe isn't going to go away, and that the EU remains the destination for half of Britain's exports. The abortive EADS/BAE Systems defence deal shows that you can't do business at this level without government being heavily involvedl. 

    Margaret Thatcher's vision of a Britain of self-employed Essex tradesmen, owning their homes and getting ahead, is as much a part of folk history as the Winter of Discontent and union barons. Truth is, most of them are in negative equity and struggling to afford their next white van. Cameron commiserated with 33 year old “strivers” who can't afford their first house house, but he insisted that the Tories were still the party of the aspirant middle class - the “Aspiration Nation” as he put it, in a sound-bite that sounded like it came from “The Thick Of It”.  Cameron risks being a prisoner of the past, a Little Britain Thatcherite who is a clever speaker, but without a lot to say.   

Why do the Tories think they've lost already?

  There has been an unmistakeable air of defeatism hanging over this Tory conference. “Cameron in Free Fall” declares the cover story on the conference issue of The Spectator magazine, home journal of the British Right. Inside, its editor, Fraser Nelson, does not mince his words. “By now”, he writes, “it will be clear even to David Cameron that he is on course to lose the next general election”. The economic recovery Nelson says is ”evaporating” and Labour, having discovered that it has a leader is “cruising to power”. Nelson is echoing the views of a sizeable chunk of the Tory party, including former heavyweights like the former defence secretary, Liam Fox, who will be putting the boot into Cameron this week.

The Tories give the impression right now of being, if not the Nasty Party, then the Grumpy Party – fed up with immigration, multiculturalism, homosexuals, Europe, public spending, unions, Scotland – especially Scotland, following the Scottish Labour leader, Johann Lamont's, admission that it is the “something for nothing” society. Above all, the they are grumpy about the coalition with the Liberal Democrats, and loathe Nick Clegg and Vince Cable. Many Tories feel there has been too much pandering to Libdem obsessions like constitutional tinkering and gay marriage. They think that their coalition partners are preventing the Tories from introducing deep cuts in public spending and deep cuts in personal taxation.

Now, I've been arguing for some time that the economy is going nowhere and the Coalition is doomed, but I didn't expect the Conservatives to agree so enthusiastically. I now find myself in the curious position of being somewhat less pessimistic than the Spectator about David Cameron's electoral prospects. I mean, are things really going that badly for him right now? Labour has a ten point lead in the opinion polls – but that's nothing. It's quite normal for governments to have far worse ratings at this stage in the political cycle and still win come election time.

The Tories have just had a successful Olympics, as we will hear ad nauseam this week, even though it was really Labour who did the ground work when they were in office. The Republican Mitt Romney has given Barack Obama a pasting in the first US presidential debate, showing that Conservatives can still talk a good game even in a financial crisis caused by their friends in the banks.

It's not as if Cameron is all that unpopular either. His ratings are still better than Ed Miliband's on the economy and on who makes the most convincing prime minister - even after the Labour leader 's polling bounce following his conference speech last week. The omnishambles budget, last Spring, certainly did damage to the Tory reputation for competence. The succession of u-turns on the granny tax, the pastie tax and the capping of tax relief on charitable donations was embarrassing, and this week it became the omnishambles-on-wheels as the government had to scrap West Coast rail franchise. However, British voters are well used to shambolic behaviour from governments - we kind of expect it - and they don't appear to think that Ed Miliband would do very much better.

So, again: why do the Tories seem so down in the dumps? Well, I think it has something to do with the fact that the Conservative movement as a whole is feeling  uncomfortable with itself right now. The Tory blogs are full of comments from long-standing party members who resent the “metrosexual” approach of the current leadership, and don't like David Cameron's promotion of “gay marriage”. Many Tories have felt locked out of their own party because of the leadership's determination to turn them into a touchy-feely, New Age Tory party that likes windmills, celebrates multiculturalism and hugs hoodies. Remember, the typical Conservative member is eligible for those bus passes that Johann Lamont wants to scrap.

Then there is Europe – the most divisive issue for the Tory Party since the Corn Laws. It is still causing trouble, even though the prospect of Britain adopting the euro is about as remote as Norman Tebbit entering a civil partnership with Abu Hamza. But the Tories simply cannot let the issue go. Cameron is constantly being urged to reflect this hostility to Europe in some way, perhaps through a referendum, though it is never quite clear what this referendum should be about. The Justice Secretary Chris Grayling, said last week that Cameron needs to make “symbolic statements between now and the next election” about Europe, though it's not clear what he has in mind.

This week, the former Tory Defence Secretary, Liam Fox is expected to come out and call for a referendum on Britain's continued membership of Europe. The official government line is that any significant change in Britain's relationship to Europe should be put to a referendum. But since that relationship is going nowhere, there is no need to have one. The bottom line is that many Tory eurosceptics want out of Europe, but they don't really know how to do it.

No one outside the United Kingdom Independence Party – which is now worrying Tory candidates in a number of English constitutionalities - seriously believes that Britain should withdraw from the EU, which remains the destination for half of Britain's exports.  British voters certainly don't want to leave, though they are no great enthusiasts for Brussels bureaucrats. It is not even clear HOW Britain would leave the EU, since of course, the Maastricht Treaty was supposed to be for keeps.

This is the worst kind of issue to divide a party – a problem with no obvious resolution, an itch they cannot stop scratching even though they know it makes it worse. This narrow obsession with Europe only confirms the extent to which the Conservatives are out of touch with the real issues. It prevents them addressing the struggling voters – the “suspicious strivers” identified in a huge opinion survey unveiled by the Conservative chairman, Lord Ashcroft last week – who feel that this government isn't on their side.

Cutting the top rate of tax from 50% to 45% made little economic difference, but has done serious damage to Cameron, because it confirms the suspicions of many hard pressed families he is only concerned with rewarding his rich friends. The tax issue has given Ed Miliband a lifeline – a policy that not only unites Labour, but connects with the views of the vast majority of voters, who are appalled by the behaviour of rich bankers.

So, the Tories are turning in on themselves, and losing touch with the concerns of ordinary voters. It is as if they are falling victim to the Labour disease of the 70s and 80s. This is good news certainly for Ed Miliband, who is leading a party that is more united and at ease with itself than at any time since its election victory in 1997. I don't really believe that he is “cruising to power” as the Spectator puts it, but he's certainly up and running. If the Tories continue to stumble, the Geek might actually make it to Number Ten.

Scotland: the "something for nothing" society. Johann Lamont joins the Tories.

   The "something for nothing" society.  That's how Johann Lamont characterised  Scotland under the SNP in her first serious policy speech as leader of the Scottish Labour Party last week.  A land where greedy and ignorant voters have been seduced by Alex Salmond's electoral bribes on free personal care, tuition fees, bus passes, prescriptions.  The fact that these were Labour policies as recently as last year's Holyrood election doesn't appear to trouble Ms Lamont.  It should.  I've heard this described as "courageous";  I think it's just daft politics.  

   Free personal care was introduced under the Labour First Minister, Jack McConnell, as was the abolition of upfront tuition fees in 2001. Concessionary bus passes for pensioners was also a Labour policy and their health spokeswoman, Jackie Baillie, claimed credit for the abolition of prescription charges as recently as the 2011 election campaign.  In that same campaign, Iain Gray, Lamont's predecessor as Labour leader, promised not to reintroduce university tuition fees, up front or post grad. As for the council tax freeze, Labour claimed credit for this policy in the local election campaign in Glasgow only months ago and promised to maintain the freeze for five years. 

   

  The Lamont List is an astonishing act of political self-harm, comparable to Gordon Brown's scrapping of the 10p tax band in 2008.  Only that was one own goal - Lamont's List represents a whole tournament of own goals delivered in one speech. You just can't do politics like this, as if you have ideological amnesia,  and don't even attempt to explain why policies that you commended to the electorate only a year ago have suddenly become unsustainable.  Perhaps if the Scottish government had plunged itself into financial crisis, but it hasn't.  The SNP has been running balanced budgets for years while paying for these "unaffordable" policies.  

  This is Nick Clegg without the apology.It is very rare for a politician to promise cuts BEFORE they reach office. Normally the name of the game is to attract voters, not alienate them by promising to axe popular policies. .  Even if you do intend to review these "freebie" policies (which of course are not free) the time to do it is when you are in government.  Promising, in opposition, to take away a whole range of universal benefits only hands ammunition to Alex Salmond, who will use this in every speech from now till the next Scottish elections.  

How many nations was that Ed?

     How many nations was that, exactly? Ed Miliband borrowed the tailcoat of Benjamin Disraeli this week to pronounce his faith in “one nation”. Constitutional pedants (like me) might have pointed out that there are actually two nations in the United Kingdom, Scotland and England. Oh, and one of them might be about to leave.

Everyone in Manchester, from the leader down, now believes that a deal will be announced in the next couple of weeks on holding a single question, 'in or out' referendum on Scottish independence in October 2014. “The dots have all been crossed”, as one insider put it.

We've been living with the technicalities of this plebiscite for so long that we've tended to forget the significance of it. In a couple years, the 300 year old United Kingdom - one of he most successful unions in history - could cease to exist. This referendum represents a huge gamble by David Cameron - one that the Spanish premier, for example, is not prepared to take by giving Catalonia a referendum on secession.

But I'm still not entirely sure Labour fully appreciate the job they've taken on. You see, David Cameron was responsible for agreeing the referendum on independence after the 2011 election, but it is Ed Miliband's Labour party that has the responsibility of winning it, because the Tories are too unpopular in Scotland. Buttonholing Labour politicians in the Manchester conference centre, I did not get the impression that this is occupying their waking thoughts. Many seem remarkably complacent about the outcome of the referendum, believing that now Alex Salmond has been “put in his box” by the denial of his “second best” second question, the job is largely done. Few seem to realise yet that this single question has long been part of Yes Scotland's game plan.

Labour puts factionalism before nationalism.

 Biff, bash, bosh. The Scottish Labour Party is engaged in its favourite pursuit: personal infighting. Better together? Speaking together would be a start. As so often at key moments in modern Scottish history, what we hear from Labour is  muffled yells from within the organisation as factions fight it out on North/South lines, or on East/West, or Right/Left lines - any lines you care to mention

Better Together, the Labour-led campaign against independence should be capitalising on its best month yet. The Olympics have breathed belated life into the idea of a United Kingdom; the EC President, Jose Manuel Barroso, has torpedoed the SNP's policy on EU membership; Alex Salmond has threatened to break up the BBC; Iain Duncan-Smith is imposing controversial welfare reforms on Scotland while the SNP government seems obsessed with the wording of a referendum question that won't be put for two years and which the majority of Scots appear to think is an irrelevance. Alex Salmond has been booed in public, for heaven's sake.

Doesn't take a genius to realise that the SNP government is finally experiencing that “mid-term” unpopularity that afflicts all governments eventually. Yet, Labour seems determined to divert attention from all this by indulging in organisational civil war. Forget The Thick of It - they should make a black comedy out of the life and times of John Smith House.

Nicola Sturgeon. The Yes minister. But does she 'do' the constitution?

    It was the June 2004. Nicola Sturgeon was preparing to set out her stall for the SNP leadership election following the resignation of John Swinney after that month's disastrous European election results. Everyone expected her to win.

   That was until the shock news came in that Alex Salmond had decided to return from his self-imposed, exiled in Westminster to stand again as leader, despite having said that:'if nominate I'll decline; if drafted I'll defer; and if elected I'll resign”    It was a mark of Nicola Sturgeon's humility, and her political nous, that without hesitation she stepped aside to allow the return of the Big Man – to the dismay of feminists who thought she should do nothing of the kind. But Sturgeon knows the value of that most important quality politics: the ability to bide your time.

Now, after five years as Health Secretary and Deputy First Minister, she is to taking on responsibility for the constitution and the referendum following last week's cabinet reshuffle. Sturgeon is now the minister for National Destiny; her place in history assured as the woman who won - or perhaps lost - the battle for Scotland. She also takes over the infrastructure and growth brief making her the minister for “Plan Mc B”. Her task is to deliver independence and turn the economy round. So, not much pressure then.

It is a tribute to Nicola Sturgeon that no one is saying she's taken on mission impossible, even though the opinion polls suggest that it is precisely that. The Scottish Labour leader, Johan Lamont's main criticism of the appointment seemed to be that she was too good to waste on the constitution and should be sticking with the national health service. Nicola Sturgeon is certainly no one's token woman, having worked her way to the top of the greasy poll through a legendary capacity for political focus and sheer hard work.

She has been around politics longer than she looks. Sturgeon made her name as an SNP youth organiser after joining the party in 1986, and was acting as a solicitor for Drumchapel Law Centre in 1992 when she first stood as a candidate for parliament in Glasgow Schettleston. A fierce debater, the “Nippy Sweetie” as some call her, is well used to fighting the nationalist cause deep with enemy lines in Labour West Central Scotland. After entering Holyrood on the Glasgow list in 1999 she rapidly became a leading force in opposition and took the health brief after the SNP's historic Holyrood victory in 2007. She survived that graveyard of political ambitions unscathed, and with her prestige enhanced having abolished prescriptions, seen off bird flu and legionaries disease, and successfully promoted minimum alcohol pricing.

By putting his best ministerial asset in charge of the referendum, Alex Salmond is telling us two things: that he takes this referendum seriously and that modern nationalism has changed. Sturgeon will be the face of the independence campaign in 2014 during the seven hundredth anniversary of Bannockburn. Instead of kilted hairies waving rubber claymores in the celebration of Robert the Bruce's defeat of the English, it will be this diminutive woman who, in her smart suits and pearls, looks more like the head teacher of an Ayrshire comprehensive than William Wallace.

Sturgeon personifies the new SNP: competent, technocratic, left-wing, female, middle class. Alex Salmond would like Scots to compare and contrast with David Cameron's cabinet in Westminster, which is increasingly male, pale, upper class and, well, Tory following last week's reshuffle. Nicola Sturgeon likes to compare herself to the founder of the NHS, Aneurin Bevan, and it is hoped that she will give non-nationalists a reason to vote for independence, if only to halt Tory rule north of the border. She represents the difference between what Westminster politics is like today and what the SNP say Scottish politics could be like after independence.

All very well. But what about the referendum. How, with opinion polls consistently suggesting that only a third of Scots actually favour independence, will she deliver a yes? Can she deliver? How will she persuade the 40% of Scots who want more powers for Holyrood but don't want to leave the United Kingdom that they should vote yes to independence? The task looks daunting.   She will be working in parallel with the Yes Scotland campaign, led by the former BBC news supremo, Blair Jenkins.  And even with the help of her trusted special adviser, Noel Dolan, and with Alex Salmond's former communications director, Kevin Pringle, also working on independence strategy, she faces an uphill struggle.

Sturgeon's competence is not in doubt, but it has to be said that abstract debate on constitutional reform, and the finer points of post-independence financial policy, are not her natural ground. She is more comfortable speaking passionately on social issues like health inequality or same sex marriage than debating the Clarity Acts, the West Lothian Question or the rights of regions to secede. She is a sleeve-rolled-up politician rather than an armchair constitutionalist, and has shown little interest in the metaphysics of devolution max, independence lite, federalism or confederalism. Independence, in her universe, is a simple matter of giving Holyrood the “normal” powers of an independent country. End of.

Except that it won't be. There are many complex issues to do with the mechanics of separation and the future of an independent Scotland that she will have to address whether she likes it or not. Yes, Scotland could, in theory, become like Norway or Denmark, a prosperous small nation in Europe. But how do you get there without constitutional upheaval, without a lot of expensive reorganisation; without institutional duplication? What about the currency, the relationship to Europe, the future of the BBC, the army, the National Health Service, pensions.. What about the emotional ties that bind; what about the future of cross-border UK companies; what about corporation tax; what about splitting oil revenues.  Scotland already has a parliament, so what is to be gained from withdrawing from Westminster?

The Chancellor, George Osborne, last week challenged her to explain how an independent Scotland could pursue its own economic policy when interest rates and currency issues continue to be decided by the Bank of England. The crisis in the eurozone, said the Chancellor, shows that a currency union is not possible without a political union. So will Scotland end up like Greece? Nicola Sturgeon has tended to avoid answering questions like this on the grounds that they are part of a “scare-mongering” agenda that talks Scotland down. Of course, Scotland can keep the pound, she says, and remain in Europe as a succession state. And have representation on the monetary policy committee of the Bank of England. Well, maybe. But she has not sounded comfortable on these issues.

Her immediate challenge is to ensure that a binding referendum happens at all, for right now there is no guarantee that it will. David Cameron has said he will only agree to a so called Section 30 order, giving the plebiscite constitutional legitimacy, if Alex Salmond drops his call for there to be a second,”devolution max” question on the ballot paper. Now, as it happens, Nicola Sturgeon is widely believed to have favoured a single question referendum all along. Like many in the SNP she believed that having a second question would only ensure that independence loses. Scots are gradualists and, according to countless opinion polls, would prefer a parliament with greater powers but within the broad United Kingdom.

Anyway, there is no settled will in Scotland on what the second question would actually say. Would it be full scale federalism with a separation of powers? would it be full fiscal freedom within the UK? would it be devolution plus, as suggested by the think tank Reform Scotland, with Holyrood most taxation powers, including oil revenues, but leaving VAT and National Insurance with Westminster? To a straight down the line nationalist like Sturgeon, these all seem like unnecessary complications.

After her :”productive” meeting with the junior Scottish Office minister, David Mundell, last week, there was widespread speculation that a deal is effectively done. There will be a single question. It will be along the lines of the one proposed by the SNP, namely “Do you agree that Scotland should be an independent country” - though the Electoral Commission will have a say on the precise wording. In exchange, the UK government will permit a Section 30 order which gives Holyrood the power to hold a binding constitutional referendum in October 2014. 16 and 17 year olds will also probably get the vote. This will be presented as a reasoned compromise in which everyone can claim victory. Alex Salmond gets his binding referendum while David Cameron can say that he forced Salmond to ask a straight question with no 'second best' options on the ballot.

Assuming the deal is struck within the next couple of weeks, when Alex Salmond meets David Cameron, it will be game on. The Yes Scotland campaign chief, Blair Jenkins, is absolutely confident that Scotland will say yes. That many of the 40% who support more powers will finally opt for independence. By denying a second question, David Cameron risks being accused of disenfranchising the majority of Scots who support neither independence nor the status quo. Nicola Sturgeon will spend the next two years calming Scottish fears about independence, insisting that the United Kingdom will continue, albeit in different form, and that Scots will still be able to call themselves British while seizing control of their own destiny.

Thus far, she has had a pretty easy ride, since the No campaign, called Better Together, is nowhere to be seen. It has so far failed to capitalise on the renewed sense of “Britishness” that was supposed to have emerged from the Olympic Games. It is not entirely clear how the No campaign will even function since it is a coalition of very diverse unionist parties – Tory, Liberal Democrat, Labour – who all have differing views about the constitution. Labour in particular will be leery of appearing on platforms with the Tories, who remain political pariah's in Scotland.

The SNP believe that the Better Together campaign will disintegrate as the recession deepens and the Conservative led Coalition in Westminster pushes through draconian welfare reforms and spending cuts. Well, maybe. Equally, an economic depression might make Scots less willing to take the radical step of leaving the security of the UK. Independence might seem a needless distraction when people are losing their livelihoods. This contest is genuinely open, and no one can predict the outcome. All we know for certain is that, with Nicola Sturgeon in command, the battle for Scotland's future really has begun.  

Wealth tax. Just because Nick Clegg proposed it doesn't mean its a bad idea.

    “Don't strangle the goose that laid the golden egg”, pleaded the Tory MP, Bernard Jenkin yesterday after the Liberal Democrat leader, Nick Clegg, called for a wealth tax. Now, where exactly is this golden egg, I wonder? Could it be in the City of London, where some very wealthy people laid an egg of another kind recently that brought the country to its knees. Perhaps it is in British manufacturing, which has dwindled to 11% of GDP. Or have the golden eggs perhaps been deposited in feathered nests abroad?

It is astonishing that anyone still subscribes to the myth that the enrichment of the few leads to the prosperity of the many. It just doesn't happen. Wealth does not “trickle down” to the rest of society from the troughs of the very rich – if anything the reverse is the case. It is sucked up through the concentrations of asset wealth held by the top 1% in property, shares, bonds. The story of the last three decades is that the wealthy have become immensely, shockingly, incomprehensibly richer while the middle has been squeezed and the poor remain pretty much as they always have – at the bottom of the heap struggling to hold their lives together.

Free personal care pays for itself. Cut council bureaucrats instead.

Free personal care is again being condemned by local authority officials and newspaper editorials as a luxury "the country cannot afford'.  The reverse is true:  we can't afford not to provide medical and nursing care to older people.   The policy, introduced by the Labour First Minister, Henry McLeish in 2001,  has helped tens of thousands to remain independent, living with dignity in their own homes instead of lingering in a hospital bed at the cost to the taxpayer of £1500 a week. As the economist, Professor David Bell has pointed out, since  2002 bed blocking in the NHS has become virtually non existent, saving a large chunk of the £342m that the policy costs.

And FPC isn't just a way of allowing older people to avoid having to sell their homes. It is a myth that free personal care covers care home costs. It doesn't, and care home residents still have to pay the net £22,000 pa cost, unless they own less than £23,000. That's a means test in anyone's language. Councillors and local authority bureaucrats like to focus on free personal care because it diverts public attention from officials earning six figure salaries and getting extravagant final salary pensions. The cost of local authority pensions is equivalent to a quarter of council tax revenue. How about looking at that before destroying the security and dignity of older people. 

There ain't gonna be a second question.

  Alex Salmond has been accused of jiggery pokery, collusion, manipulation and dishonesty over his offer to include a second “devo max” question in the independence referendum. The Scottish Affairs Select Committee in Westminster declared that Salmond only wants this as “an insurance policy against the verdict of the Scottish electorate.”   The leader of the Scottish Liberal Democrats, Willie Rennie, then accused Salmond of using the Scottish Council for Voluntary Organisations as a “front organisation”, after a leaked email suggested that the SNP leader's aides were trying to prompt the SCVO leader, Martin Sime, into coming up with the wording of a second question.        With support for independence falling, Salmond is, we are told, desperately looking for a way to snatch a kind of victory from the jaws of defeat by ensuring that he gets his “second best” option on the ballot paper.

Mind you, I'm not sure this is what the Yes campaign believe is happening. It may surprise you to learn that leading figures in the independence movement are privately expecting, indeed banking, on there being only one question. The trouble with the second question on devolution max is that a lot of Scottish nationalists think, and have always thought, that it is a very bad idea. This is because it will all but guarantee that independence loses, since the vast majority of Scottish voters favour a parliament with greater economic powers. So why hold a referendum that you can't win?

Team GB: is it game over for Scottish independence?

   And there is scarcely a dry eye in the house as Sir Chris Hoy, laden with medals, says goodbye to the fans who have followed him so ecstatically through these games. A final victory lap, wearing the Saltire of Scotland,  a true national hero retires to take his place in the pantheon of sporting fame. Promising to dedicate himself to promoting Scottish cycling as patron of the Sir Chris Hoy velodrome in Glasgow...And here comes Alex Salmond now, jogging alongside Sir Chris, weeping openly, as the crowd goes wild at these Commonwealth Games, which many are saying have ignited a new and positive sense of Scottish national identity, a New Patriotism...

Well, in your dreams, Alex. Such are the sentiments that Scottish National Party romantics hope to hear from the commentary box at the Commonwealth Games in Glasgow. They want the “friendly games” to deliver a sporting boost to Scottish nationalism in 2014, just as the London Olympics are being credited with giving birth in 2012 to a “New Patriotism” in Britain, as the New Statesman put it last week. “A soft and benign patriotism,” said the left wing journal, “quite different from the hard, defensive patriotism of the Eurosceptic right or any number of Little Englanders or some Scottish nationalists.” Mo Farah, an asylum seeker from Somalia, winning the 10,000 metres and wearing the union flag is the multicultural pin up for the New Britain.  B

Same sex marriage. We've been here before.

 The First Minister is in a dither about it; the cabinet is split over it; church figures call for a referendum as gay rights activists take to the streets. No, not Tuesday's aborted cabinet decision on same-sex marriage, but the Labour-Liberal Democrat cabinet in 2000 during the row over the abolition of Section 2A on the teaching of homosexuality in schools. It is remarkable that the first real split faced by the SNP First Minister, Alex Salmond, is over homosexual equality, just as it was for the late Donald Dewar.

I recall that episode very well, not least because I was close, perhaps too close, to the ministers, led by the former Communities Minister, Wendy Alexander, who were leading the campaign to abolish Section 2A. The ferocity of the response took them by surprise. They thought Scotland was a tolerant nation and that abolishing the clause would be a foregone conclusion. Then came Brian Souter, Cardinal Winning and Keep the Clause. Donald Dewar, a conservative liberal, if that isn't a contradiction in terms, found it an almost impossible conundrum.

And so, it appears, does Alex Salmond. Roll on 12 years and the SNP First Minister is caught between liberals in the cabinet led by the Health Secretary, Nicola Sturgeon who believe that homosexuals should have equal rights, and Catholic ministers like Roseanna Cunningham, who think that gay marriage might be an equality too far. Salmond clearly hasn't made up his mind and since nothing happens without his say so, the government seems paralysed.

Catalonia. Bankrupt. Scotland next?

    Scottish nationalists could be forgiven for cursing fate this week. Both Ireland and the autonomous Spanish region of Catalonia, the two most admired constitutional role models for a post-union Scotland, are sinking under the weight of their debts. Today, Ireland's voters are expected to vote reluctantly for an EU financial austerity package that could condemn them to economic depression for a decade or more. Meanwhile, the Catalonian President, Artur Mas, says Catalonia may “not be able to pay its bills at the end of the month”. The region has already restored prescription charges, introduced tourism and fuel taxes and cut spending on infrastructure projects.

There but for the grace of god goes Scotland say unionists. What price independence if it means going cap in hand either to Madrid or the ECB for bailouts? Scotland's much safer in the UK which is big enough to withstand these economic shocks. Well, maybe. The troubles in these once prosperous corners of Europe are undoubtedly a problem for Alex Salmond, who has just launched the SNP's Yes Campaign for the 2014 independence referendum. The negative headlines from Dublin and Barcelona will discourage many Scottish voters from signing the pledge.

However they are not necessarily arguments against independence as such. Catalonia and Ireland have been plunged into crisis, not by their constitutions, but by their banks and by Europe's relentless sovereign debt crisis, now morphing into an economic depression. Neither Catalonia nor Ireland see relinquishing independence as a solution to their financial difficulties - though they are beginning to see Europe as part of the problem

Five years since Northern Rock - and no end yet to financial crisis

  Five years ago this week, on the 9^th of August 2007, the world changed. That was day the banks suddenly stopped lending to each other, causing the collapse of Northern Rock and plunging the world economy into a slump from which it has yet to recover. Indeed, last week's manufacturing figures suggest that we are heading into a new worldwide manufacturing recession, though you could be forgiven for not having noticed that we had come out of the previous one.

So what have we learned in the past five years? Well, not a lot, as the latest revelations about the behaviour of loss-making Royal Bank of Scotland confirm. The global financial crisis has simply become worse in precisely the way that many foresaw. Since 2008, governments have thrown ever greater sums of public money at delinquent financial institutions in the hope that they would mend their ways and become what banks should be: engines of credit that allow industry to expand rather than vehicles for personal self-enrichment.

The economic living dead: misery of the middle earners.

Where is the anger?  Where is the resistance? Five years into the worst economic crisis since the 1930s and earnings – apart from those of the top ten percent - have fallen year on year. A raft of studies has shown that ordinary families in Britain are suffering the longest squeeze in living memory, yet the streets are quiet, there are no barricades, no factory occupations. People have been voting, if they vote at all, for the established political parties. The Left and even the far Right have never been more marginal, at least in Britain..

Ed Miliband isn't offering any radical alternative to austerity, just slightly slower cuts. Francois Hollande, the new socialist President in France, who calls himself “Mr Normal”, is actually promising greater austerity. He says he will legislate for a balanced budget in France by 2017, in a country that hasn't had a balanced budget since the 1960s. Here in Scotland, the Scottish National Party is promising oil-fuelled growth and better public services but its leader, Alex Salmond, is behaving increasingly like an economic conservative.

As for popular resistance, all we have seen so far are token stoppages like the rather damp demonstration by civil service workers in defence of their pensions – pensions which of course are denied to the vast majority of workers in the private sector. But closing a few libraries and museums isn't exactly a red revolution. Last year, the Occupy movement, inspired by the Arab Spring, seemed to be building some kind of international movement against global capitalism, but the tented communities that sprang up in Wall Street, St Paul's and in Edinburgh's financial district have moved on.

But the inequalities of wealth that motivated Occupy – the 99% as they called themselves - are as real as ever. According to the Sunday Times Rich List, published last week, the top 1,000 wealthiest people in Britain now own a combined £414 billion, equal to a third of the National Debt. The top 1% of earners in Britain syphon 15% of national income, a figure that has doubled in 30 years thanks to lower income tax. Down at the other end of the salary scale, the bottom ten percent 10% saw their real earnings fall by 4.1% last year, according to an analysis last week by the TUC. This is because inflation is worse for those on the margins. The rate of inflation in essentials like foods and fuel is around 6%, whereas if you're buying flat screen televisions, computers or air travel prices are actually falling. Whoopee!

Pound, euro, groat - what currency for Scotland?

Whatever happened to Braveheart?  Time was when the debate about Scottish independence was all about heroic issues like freedom, national destiny, culture. Even the mild-mannered former leader of the SNP, Gordon Wilson, used to talk of it being a “revolutionary” party.  Not any more. Nowadays the independence debate seems to be all about the small change, literally, of national liberation - the currency.

   Right now, the biggest issue in the referendum campaign is whether or not Scotland should keep the pound.. Arguments about  North Sea Oil,  the armed forces, Trident etc have  been eclipsed by a row over whether or not Scotland could, or should remain in monetary union with England, as the SNP wish.    The former Labour Chancellor, Alistair Darling, who will be launching the anti-independence Better Together campaign on Monday, claims that Scotland would suffer “economic serfdom” if it retained sterling after independence. And anyway, he says, England wouldn’t allow an independent Scotland to keep the pound. 

  Nonsense, say the Nationalists.  Wha’s to stop us keeping the bonny pound?   Scotland will prosper in a new Britain as Scots and English share a common monetary destiny.  At least for the time being.  Not everyone thinks this is plausible.   Professor John Kay, a former member of Alex Salmond’s council of economic advisers, suggested this week that Scotland might have to consider setting up its own currency, like Norway or Denmark, rather than remain under the heel of the Bank of England    Nobody seems to talk about joining the euro any more, for obvious reasons, which is unfortunate because there is an argument that, if EMU survives, Scotland could benefit from being in it.

Lost in London during Boris's games.

   Driving back from Dover from holiday, we decided to let the satnav do the job of getting us round London. Yes, I know – you just head north on the M25, but we'd heard it was jammed because of the Olympics. Anyway, the satnav lady, in her digital wisdom, decided to take us straight into central London on the A2 and, before we knew it, we were in the middle of the Olympic Games complex and panicking in case we never got out again. But we did. In fact, we sailed through central London with uncanny speed because there was practically nothing on the roads. I have never seen London so quiet. It was like the sequel to 28 Days.

What has this got to do with the political prospects of Boris Johnson, who added to his buffoonish reputation yesterday by being left dangling from a zip wire during a photo-opportunity in London's Victoria park? Well, the success of London's traffic management during the Games is being seen as both another feather in the cap of the London Mayor and another nail in the coffin of David Cameron. The lack ot traffic congestion in central London, though an administrative achievement, is apparently helping to plunge Britain into what is being called a “triple dip recession”, presumably because economic activity has been damaged by people staying at home and watching British athletes failing to win anything. And Cameron will get the blame. 

British debt is much worse than Spain's. And more is on the way.

  Can it really be that, only seven years ago this month, a quarter of a million people, all dressed in white, encircled Edinburgh in the campaign to Drop the Debt of developing nations? It seems like a different world, now that countries like Britain are drowning in their own debts - which make the debts of African countries look like small change.

While Bob Geldoff was hurling expletives at the G8, Britain was indulging on the greatest borrowing binge in history. This wasn't just government borrowing, which rose to an unsustainable £155bn per annum in 2010. The real big spenders were you and me, the households of Britain, who embraced debt as no generation has ever done before. Household debt in Britain is now off the scale, at 150% of GDP – heading towards £2 trillion. There is no precedent for this in British economic history.

If you add in the debts of British banks, unfunded public sector pensions and PFI deals the debt mountain rises to 507% of GDP, according to analysts McKinsey and this has actually risen since 2008. Spain's total debt by the same measure is only 385% of GDP.  But here's the really scary thing: many economists say the only way to get out from under this massive debt burden is by spending more in the hope that this will revive the economy. And they are probably right.

Epitaph for the Age of Irresponsibility

     “An epitaph for an age of irresponsibility”, is how the Chancellor, George Osborne, described the Barclay's Libor-fixing scandal in the Commons last week. It was, he went on: “symptomatic of a financial system that elevated greed above all other concerns and brought our economy to its knees”. If even a Tory Chancellor has finally got it, can we expect real action to sort out Britain's banks? Don't hold your breath.

The manipulation of Libor – the London Inter-Bank Offered Rate - has been common knowledge in financial circles for years. The Economist has been writing about it at least since 2008. The idea that the British Bankers Association didn't know what has been going on is laughable. Every barrow-boy in the City knew the banks had been fiddling their borrowing costs in order to disguise their distress after Lehman Brother's crashed in 2008 and interbank lending almost froze. By manipulating their borrowing costs, banks like Barclays were able to convey the impression that they were in less financial stress than they actually were.

Lords reform could be the missing link to devolution max

The SNP said this year's rebellion by Tory MPs on reform of the House of Lords was confirmation that “Westminster cannot be trusted on constitutional reform”. The only way Scots can ensure that the unelected Upper House has no say on Scottish affairs, they say, is to vote Yes to independence in 2014. Oh, and don't listen to all those promises from David Cameron and Alistair Darling that, if Scots are good boys and girls and vote No, Holyrood will be given more tax raising powers and many other goodies. Like Lords reform, this is destined for the long grass of legislative oblivion.

However, it's not entirely true to say that Westminster can't be trusted to deliver constitutional reform – it delivered the Scottish Parliament after all, and has recently passed the Scotland Bill giving Holyrood a share of income taxes, though few economists seem to think this scheme is workable. And with a bit of imagination in Westminster about the Lords, and its place in the shifting sands of the Union, they might be able to kill two constitutional birds with one stone: salvage the UK and give the Upper House a real role in life as an elected Senate.