Scotland

Tom Griffin (London, OK): The SNP may not yet have the votes to get their planned independence referendum through the Scottish Parliament next year, but the proposal is certainly creating waves among their political rivals.

The Liberal Democrats announced yesterday that MSP Ross Finnie is to review their opposition to a referendum and report back to a special session of the party's Scottish conference on 30 October. 

Scottish Lib Dem leader Tavish Scott has staunchly opposed a vote up till now, but there was notable pressure for a change of stance from some Scottish activists at the UK Lib Dem conference last month. 

At a time when the eyes of the world have been upon Scotland, its government and Parliament due to the al-Megrahi case, it is an appropriate moment to ask what happened to the Scots tradition of radicalism.

Scotland once had, and still has to an extent, a reputation as a left-wing land, a place of radical politics and possibilities, and is still talked about by some as being a ‘socialist country’.

Yet if this were the case where are the current generation of Scottish radicals who would give vent to such ideas, questioning those in power and vested interests, slaying orthodoxies and complacencies and exposing our silences and omissions from the past and present? Who are today’s radicals, not necessarily of left or even right, but of free spirit and mind?

Who are the modern day equivalents of such titans as Adam Smith and David Hume, Keir Hardie and John Maxton, Patrick Geddes and R.D. Laing? Scottish Labour had an explosion of talent in the 1970s and 1980s, as the old city fathers were challenged by a new generation of talent of the likes of Robin Cook and Gordon Brown. Since then the party has ossified and burnt out with exhaustion on the twin pillars of becoming the Scottish political establishment and twelve years in UK office.

The Nationalists have tapped into a generation of people who would previously have found a natural home in Labour but they have made it their business to be respectable and a party of government. The Scottish Tories are still earning their spurs back after the long shadow of Thatcherism; the Lib Dems are more a collection of individuals. The implosion of the Scottish Socialists lost a whole spectrum of radical opinion a voice, while the Greens are too small and polite to be radical and serious.

The world of politics and history sometimes throws up by complete accident fascinating and revealing coincidences. So it proved on the 70th anniversary of Britain and France reluctantly declaring war on Nazi Germany after Hitler had taken the decision two days previously to unleash his war machine on Poland. On such a day laden with history the SNP administration fired the first official shots in the referendum on Scottish independence. Alex Salmond, First Minister, committed his administration to bring forward a bill to hold a referendum in the next year.

More than the date of September 3rd connects these two separate events for they tell us something profound about the nature of Britain, what it became, the state it is currently in and what fate awaits it in the near-future.

Tom Griffin (London, OK): It's now official. The Scottish Government will bring forward plans for a vote on independence in 2010. Alex Salmond announced the Referendum Bill in Holyrood today as the centrepiece of the SNP's new programme for government.

On the face of it, this was something  of an empty gesture, as Salmond's minority government does not have the votes to get the bill through the Scottish Parliament. Yet wise heads like the BBC's Brian Taylor and Slugger's Brian Walker believe there is more to the story than that.

Even if it falls, the referendum bill is likely to keep the constitutional issue on the agenda until the next Holyrood election.

Tom Griffin (London, OK): Is there a fundamental flaw at the heart of the Calman Commission's  proposals for devolution of tax powers to Scotland?

Economists Jim and Margaret Cuthbert believe the plans would have some perverse effects that could leave Scotland caught in a deflationary trap, as The Scotsman reports: 

the Cuthberts warn that under Calman – set up by Labour, the Conservatives and the Liberal Democrats – growth in Scotland's economy could also disproportionately benefit the Treasury, rather than the Scottish Government, because Holyrood would get to keep only 10p out of every tax band. 

For every 1p cut in income tax, Scotland would need to raise an extra 5 per cent income from the basic tax payer, an extra 7.5 per cent from those in the 40p bracket and an additional 8 per cent from those in the top 50p bracket, which will be brought in next year.

The Herald carries a Labour reaction:

"This is Alice in Wonderland economics. It is right that if the Scottish Parliament used tax-varying powers that would have consequences for the budget of the Scottish Government - that is the point. It's barmy to argue that the Treasury should make up the shortfall."

All the major parties in Scotland would agree that part of the point of devolving tax-raising powers is to strengthen the incentive for the Scottish Government to manage public spending responsibly and to grow the Scottish economy. If the Cuthberts are right, Calman may not achieve this. They foresee circumstances where tax cuts could boost the Scottish economy and swell UK Treasury receipts yet leave Scottish finances worse off. Conversely, they think Holyrood might well be forced to raise taxes at the expense of economic growth to maintain revenues.

The Cuthberts argue that these effects can be avoided if the Scottish Government receives a fixed percentage of all income tax in Scotland, on the model of a revenue-sharing system currently used in Canada.

That would mean that while decisions made at Westminster would continue to affect Holyrood's revenue,  Holyrood's decisions would also start to have an impact on Westminster's revenue from Scotland:

Successful operation of such a system would require that the UK and devolved governments are willing to operate in a collegiate manner – being appreciative of, and respecting, the impact that their own actions will have on the revenues of the other parties. The implication is that a successful tax sharing system would have to involve a more federal way of working than is the current practice in the UK. It would be very unfortunate if the Calman Commission had been forced towards its flawed proposals on tax sharing because it was unwilling to countenance the implication that a proper system of tax sharing would inevitably involve a more federal aspect to the operation of the UK constitution.

The Cuthbert's open letter to the Calman Commission is available as a word file, along with some other very interesting papers, from their website.

Tom Griffin (London, OK): The Calman Commission this week published its long-awaited report on the future of Scottish Devolution. Most attention is likely to focus on its recommendations for taxation, which could create a significant new divergence from the rest of the UK.

The Commission calls for income tax to be reduced by 10p in the pound in Scotland with a commensurate reduction in the block grant from Westminster. The Scottish Government would have the option to make up the difference by setting its own income tax. 

One limitation is that the Scottish variation would apply equally at all rates. Holyrood would not be able to raise the top rate while leaving the standard rate unchanged, or vice-versa. Such a power would threaten the UK's 'social union' according to the Commission.

This is one instance of a general theme in the report, the delicate balancing act between deeper and more accountable devolution, on the one hand, and the continued maintenance of the union on the other.

This has been a packed month of intrigue and shifting sands in UK constitutional politics, starting with news that polls show support for Independence stiffening not collapsing in recession - and culminating in this weeks (conspicuously under-reported) visit of the First Minister to the USA , and today’s strange conversion of all political parties around ‘Devolution Max’ or is it ‘Independence Lite’?

The much traduced Calman Commission has been faced with the
conundrum of being meaningless or being a thorn in the side of Brown’s
attempt to rule Britannia.

Just as the ‘downturn’ – the euphemism we are all still coyly
clinging to - has revealed the relations between us and the banks, the
‘regulators’ (sic) and the State, the ongoing constitutional
disassemblage is revealing the relationship between Labour, the media
and the British Establishment.

Today as Radio 4
reported the meeting between Gordon Brown and the leaders of the
devolved nations, here’s how David Thompson reported the scenario:
“All sides taking part in today’s meeting say it won’t be about banging
tables or banging heads together. But while there may be a desire to
reach consensus, significant divisions do exist. Gordon Brown wants the
UK Govt to make efficiency savings worth £5 billion pounds. The SNP
Govt says that would mean £500 million in Scotlands budget and would be
economic madness. The other devolved administrations are also opposed.
The Scottish Govt is also talking about greater - and ultimately - full
control of Scotland’s finances, a demand rejected by Gordon Brown.
Todays meeting in Downing Street will test whether Welsh, Scottish and
Northern Irish leaders can put party politics to one side and work with
the British Govt to protect the UK as a whole from the global economic
crisis.”

You’ll note that in BBC Editorial analysis the leaders of Wales,
Northern Ireland and Scotland don’t represent the democratically
elected will of their nations but narrow party politics. Britain is the
one and only common arena, and to think otherwise is regressive
parochialism.

It’s worth transcribing in full because it exposes an extraordinary
level of anglocentricity in our notionally ‘national’ media (paid for
by us all). The view given by the Today programme is of course
jaundiced in the extreme, but is also overtaken by events. How will
today’s emerging consenus between all parties in Holyrood square with
this mornings report? As the Scotsmans Political Editor Hamish McDonell
wrote: “Radical changes to the Scottish Parliament – including
the addition of sweeping new financial powers – appeared inevitable
last night, after both Labour and the SNP announced major reviews of
their approach to the devolution settlement.”

The SNP are clearly thinking fiscal autonomy will be further
stepping stones to independence, while the Liberals and the Labour are
presumably assuring themselves it will assuage nationalist fervour.
What does Gordon Brown think, and how will this play with his ongoing
if incoherent Britishness project?

Death of the Scottish Press
The role of the media in all of this is crucial, and not just the
haplessly English Radios 1 through 6 and Televisions equivalent. This
week the Scottish Press, a bastion of Unionism, announced to anyone who
was still interested that it was folding like a discarded Sunday Post.
As Christopher Harvie wrote presciently
in the Guardian not so long ago, “High time to assist the slump in
taking a meat-cleaver to the established media and its daft cults of
celebrity…With any luck, the present downturn will last long enough to
wreck the economics of the conventional press and its ganglions.” Too
true.

Things may get worse not better, as Kevin Williamson points out at The Scottish Patient looking at the new editor of the Scotsman.

This week the Sunday Mail and Daily Record reported job cuts of 70, just after the unthinkable – the merger of the Scotsman and the Herald
was seriously suggested by a former editor of the Edinburgh paper. The
Scottish Press may be suffering the same crisis of the digital age but
it suffers too from having no owner or publisher willing to back the
independence line suported by – at last showing a growing 44% of the
nation.

The Times - to its credit – ran a story last week that exposed one
of the greatest myths of British Politics, that the Labour Party ‘gave’
Scotland devolution. This is a nonsense. The Labour Party and the
British State opposed it since the early 1970s and were forced to
concede devolution by a realist faction within the party and an
overwhelming civic society movement. The story, ‘Secret plan to deprive independent Scotland of North Sea oil fields’ written
by Magnus Linklater and George Rosie exposes documents detailing secret
government plans in the 1970s to prevent Scotland laying claim to North
Sea oil.

The lengths to which the British State and the Labour Government
were to go to prevent the will of the Scottish people being expressed
makes extraordinary reading, for anyone not familiar with this history.
One Treasury official even proposed that a local campaign for
independence in Orkney and Shetland should be encouraged so that
Scotland would be denied access to more than half the North Sea oil.

In a neat contemporary twist, among those advising Labour ministers
was Sir David Walker, who is investigating the banking crisis for the
present Government. As assistant secretary at the Treasury, he wrote in
May 1975 that “progress toward devolution should be delayed for as long
as possible”.

The Times story about the UK Governments plot to derail the SNP’s
“It’s Scotland’s Oil” campaign during the 1970s - actually appeared
first on BBC Alba. ‘Dìomhair’ (Secret), produced by independent TV
production company, Caledonia TV, was written by George Rosie. Dìomhair
revealed how, for more than half a century, successive Conservative and
Labour Governments set aside their antipathy to share a common agenda:
stopping the march to independence.

As one nationalist commentator wrote: “If you missed it first time
around, you can see it again on BBC Alba, (if you can receive it) on
March 6th at 9PM. What chance Newsnight Scotland doing their own
special investigation, like the one they did recently about the rise of
Anti Englishness? Don’t hold your breath.” The point he is making is
that BBC Alba, Scotland’s Gaelic channel, isn’t available on Freeview,
unlike such cultural necessities as Smile TV, Heat and QVC.

Plus ca change. Dirty Tricks are more subtle these days.

* Secret

Tom Griffin (London, OK): Breaking news from Holyrood:

The SNP's £33bn plans fell on the casting vote of the presiding officer after being tied at 64 votes to 64.

The government won the support of the Tories but the two Green MSPs withdrew their backing shortly before the vote.

Finance Secretary John Swinney said he would bring the Budget Bill back to parliament "within days".

Labour and the Liberal Democrats voted against the spending plans, saying they were inadequate to see Scotland through the economic downturn.

The Tories, who won a £60m concession for their town centre regeneration scheme initiative, backed the budget - and blamed Labour for its rejection.

Independent MSP Margo MacDonald also voted against the budget.

High drama, but given the close margin the Scottish Government will surely be able to get an extra vote from somewhere in the coming days.

Tom Griffin (London, OK): An interesting situation is developing in Scotland, where the SNP minority government is trying to get its budget through the Holyrood parliament. Last year's spending plans got through because of Labour abstentions, but that may be less likely this time around.

Finance Minister John Swinney has said the government would have to resign if the budget falls. That would give Labour the opportunity to put forward its own leader Iain Gray as First Minister. However, it might mean an election if he could not secure a majority. As The Scotsman notes, that prospect may hold fewer fears for Labour than it did during the SNP's honeymoon last year. 

Tom Griffin (London, OK): Over at Unlock Democracy, Deputy Director Alexandra Runswick warns the Calman Commission against considering Scottish devolution in isolation from the wider UK constitutional settlement.

Sadly the First Report suggests this may well happen. For example, it warns against greater financial autonomy on the grounds that it would lead to less ’shared social citizenship.’ That may be true in Scotland but the experience suggests that, if anything, the lack of financial autonomy is causing resentment in England and goes to the heart of Tam Dalyell’s West Lothian Question. Fundamentally, we believe this to be a false dichotomy; a fairer and more transparent financial settlement will be good for Anglo-Scottish relations on both sides of the border.

The BBC's Brian Taylor suggests that Calman's concept of 'shared social citizenship' is at the heart of an intellectual defence of the union.

Tom Griffin (London, OK): The Calman Commission on the future of  Scottish devolution has today published its first report. It's very much a provisional exercise, but it provides some important indications of the Commission's thinking.

The maintenance of the union was always going to be a key principle for the Commission, which is backed by the three main unionist parties in Scotland and boycotted by the SNP.  However, even within the unionist spectrum, it has become increasingly clear that Calman is headed for a much more cautious set of proposals than the fiscal autonomy advocated by the Lib Dem Steel Commission. 

Today's report states:

our consideration of finance follows from our discussion of the nature of the Union. As well as being an economic Union, the UK has a shared social citizenship. Greater tax devolution would be associated with less shared social citizenship, while high dependence on grant funding implies some common expectations about the need for welfare services like health and education. We have not reached a view on the appropriate point in what is a spectrum of possibilities, but we do recognise that this must reflect the expectations of the Scottish population. In the next phase of our work, with further help from the Independent Expert Group, we will identify the possible combinations of the funding mechanisms and their implications for the nature of the Union.

Tom Griffin (London, OK): The Calman Commission on Scottish devolution today received a report on the future of taxation and public spending from its economic advisors. 

The report's contents have been heavily spun over the past couple of days. Several members of the expert group told Scotland on Sunday that it would favour greater powers for Holyrood.

Tom Griffin (London, OK): The Calman Commission, which is taking evidence on the case for more powers for the Scottish Parliament, has today published a submission from the British Government. As Gareth Young notes, it is thin stuff for the most part, largely consisting of a rehearsal of the status quo and the case for maintaining it by each Whitehall department. The Treasury, for example, notes how "Scotland benefits from the Government’s successful macroeconomic policies set out in successive Budgets," although whether it was wise to mention the Government's two fiscal rules must be debateable at this stage.

Mike Small (Fife, Bella Caledonia): What's a more motivating force, fear or hope? Across the pond Obama has inspired a generation, re-inspired another and put 9 million people on the electoral register. Here a halving of the Labour Partys majority has been represented as a historic victory. Here it was politics as usual, and bitter negative politics at that. Labour have successfuly played on peoples fears of economic collapse. But can Britain be held together by fear? Where is a credible positive agenda emerging from London? It's not going to be the Olympics or the sight of a UK football team emerging at Hampden comprising 11 Englishmen.

There is no doubt that Labour ran a very successful campaign, but that's not why they won. The SNP ran a great campaign but chose a candidate that made them the incumbent (Peter Grant is the Head of the SNP Council), but that's not why they lost.

There are three reasons why Labour won.

Tom Griffin (London, OK): A remarkable upset means the Brown bounce continues:

Labour, which had a majority of 10,664 in 2005, held the seat with 19,946 votes, while the SNP came second with 13,209. The Tories came third.

Voter turnout at the by-election was 52.37%, compared to 56.1% in the 2005 General Election.

 

Tom Griffin (London, OK): The ongoing saga over the fate of HBOS continues to highlight the new faultlines in Scottish politics. The recently appointed Scottish Secretary Jim Murphy is facing criticism after leaking details of talks with Jim Spowart about an alternative to the Downing Street-backed Lloyds-TSB takeover.

The Sunday Herald reports:

Alex Neil, the SNP MSP who has been campaigning for HBOS jobs to be saved, accused Murphy of trying to spike the second bid.

He said: "This is a resigning matter. Jim Murphy has shown that he can't really be trusted to keep confidential matters to himself. This is market-sensitive information. This is really underhand and mischievous behaviour to try and spike any chance of another bid."

David Mundell, the shadow Scottish secretary, said: "If there is any suggestion that any politician has got embroiled or broken any confidences then that is a very serious situation and must be investigated."

Tavish Scott, the leader of the Scottish Liberal Democrats, said: "This is really dirty tricks to save Labour's neck. This is purely because Gordon Brown cannot be seen to change his mind after waving the Lloyds TSB and HBOS deal to go through."

 Tom Griffin (London, OK):The Scottish Government's plans to replace council tax moved centre-stage in the Glenrothes by-election yesterday. On a visit to the Fife constituency, Chancellor Alistair Darling condemned the SNP's local income tax proposal as a "ridiculous idea."

In the past few days, SNP Ministers have announced significant changes to the policy, with councils being given the power to set their own income tax rate of up to 3p in the pound. This could prove crucial in winning the support of the Liberal Democrats, who have long called for a local income tax that is truly local. Without Liberal Democrat support, the SNP minority government stands little chance of getting its proposals through the Scottish Parliament.

The revamped proposals seem to have got a fair wind from Lib Dem blogger Stephen Glenn. If his colleagues at Holyrood feel similarly, council tax could yet be on the way out north of the border.

Tom Griffin (London, OK):Most commentators may see it as a straight fight between Labour and the SNP, but that didn't stop David Cameron making his presence felt in the Glenrothes by-election yesterday: 

"I think it is better for all of us to be in the United Kingdom. However, we won't solve it by frightening the Scots that they cannot make it on their own. I do not believe that. It won't win the argument. One of the first things I will do as Prime Minister is arrange to meet with the First Minister, whoever that may be, and work to further the benefits of the Union for people in Scotland."

Cameron has shown in recent months that he is determined that the Tories should be more than an English party. One aspect of this strategy has been to offset weakness in Scotland through a new relationship with the Ulster Unionists. There are signs that plan may be unravelling.

Tom Griffin (London, OK): Could victory in the Glenrothes by-election set the seal on Gordon Brown's political comeback? Labour pollsters have told the Prime Minister that they will win on the back of his handling of the banking crisis, according to the BBC.

As the Sunday Times noted at the weekend, the credit crunch has prompted a reassessment of the viability of Scottish independence. Brown himself has not been afraid to make the argument, citing the UK bailout of HBOS and Royal Bank of Scotland:

"We were able to act decisively with £37bn. That would not have been possible for a Scottish administration.

"We've seen the problems in Iceland, we've seen the problems in Ireland, we were able to put the whole strength of the United Kingdom's resources behind these two banks and I think it's important because I value the Scottish banking tradition, I think that everybody does." 

Whether it is Brown's interests to preserve the Scottish banking tradition is open to question. Many now believe that the Downing Street-arranged merger of HBOS with Lloyds-TSB is unnecessary. The deal will inevitably weaken Edinburgh's status as a financial centre, and thereby, incidentally, the case for Scottish independence. One cannot help but wonder whether this was a factor in Brown's pursuit of this option.

Tom Griffin (London, OK): Today's Scotsman reports on the dramatic impact which the credit crunch is having in Edinburgh:

Morale is said to have fallen to an "all-time low" among the city's 31,000 finance workers as they wait to find out whether their jobs will survive the upheaval.

And as house prices fall, and the dole queue lengthens, there were fresh warnings today that the city council will have to deal with a rise in homelessness in the near future.

One reason for the gloomy outlook is the expected merger of HBOS with London-based Lloyds.That move is now being questioned by the Liberal Democrats in the light of today's huge bailout of the entire banking sector.

Commenting on the rescue package, Scottish Lib Dem leader Tavish Scott urged the government to help keep HBOS as an independent bank.

He added: "This is a massive package of money for banks. Market and banking circumstances have changed enormously since the proposed Lloyds/HBOS merger was announced.

"The government are now in direct negotiations with banks so they could make this happen.

"Keeping HBOS as an independent bank while strengthening RBS through this package would be positive economic news for Scotland. I urge the government to make this happen."