Conservative Apocalypse – the Meaning of the 2015 Result for the UK

It was the best of times, it was the worst of times.

As much as we can celebrate such a wholesale rejection of Labour in Scotland, by a people consistently a second (at best) priority in the plans of the Labour Project, we can only look with dismay south of the border at the party’s failure to win the favour of an electorate that was absolutely its priority to win. The striking yellow of hope clothing one electoral map, the striking blue of despair cloaking the other.

This contrast was brought into sharp focus by my return to FaceBook on the morning of the results, where so many of my friends were bemoaning the Conservative majority. Lots of people are criticising the supposed ‘polls failure’ – with no real reason, as they were showing the result within the margins of error on the average of the last 25 polls. From the stats, Miliband was never perceived as convincing prime ministerial material, and the contrast between his and Cameron’s ratings told that story for years, even when Labour’s lead in the polls was double digits. Perhaps this ultimately explains the reluctance (or paucity of numbers?) of the English left to support Miliband – because he was less convincing than Blair had been as a prospective statesman: that Conservative-incubus looked ministerial, at least, before the Scooby Doo reveal of his true nature.

One friend in particular commented about how many selfish people there were in the country – and I know that she was not talking about Scotland voting for an anti-austerity agenda en masse.  People like to talk about that ‘shy Tory’ phenomenon – perhaps ‘ashamed Tory’ would be more accurate this time around – with people reluctant to divulge their true voting preference when asked…and one can easily imagine that in a time of economic pressure, the incentive to seriously place yourself and your family’s direct financial interests first might well be much greater. So, in the same way as likelihood to commit crimes increases with poverty and economic threats to one’s family, perhaps – if one really buys into the vanishing myth of Conservative fiscal prudency with their current ideologically-motivated incompetence – one also is more likely to commit as similarly selfish and destructive an act as voting Conservative.

Certainly, according to Ashcroft’s post-election poll, 49% of Conservative voters believe they are already feeling the benefits of an economic recovery. Most LibDem voters said they weren’t feeling an economic recovery yet, but were expecting to…and then we have voters of all the other parties. The majority of Labour, UKIP, Green and SNP voters all declared they were not feeling any sign of the economic recovery, and were not expecting to do so – and that is hardly surprising: in the last year, in Edinburgh alone, the referrals to foodbanks have increased from 35 a month to 350 a month. That threat is increasingly present within people’s circle of experience, and likely to be an influence – yet something seemed to speak louder than accelerating social decline to those that returned a majority Conservative government last week.

One wonders if there is a darker reason – maybe in some of the lashing out of Scottish Labour after Thursday’s rejection by their taken-for-granted electorate. Perhaps this is predictable: despite the SNP offering to be a genuine force for social justice and moral conscience for a Labour Party with a track record of being rather good at losing its way once in government, there have been attempts by the remnants of Scottish Labour to blame the SNP for Labour failing to get enough seats to form the government. A first cursory analysis dismisses this argument – even if all 59 seats in Scotland had gone to Labour, they would still only have had 291, still far away from the required majority, or even capable of making a significant coalition with anyone else. But there is another narrative that argues for the rise in the Scottish bloc vote as a repellant to Labour voters in England.

Put simply, is the decline in the Labour vote in England since 2010 a direct response to ‘anti-Scottish xenophobia’? That was the language that The Venerable Gordon Brown used to condemn Cameron’s campaign in the last two weeks. In that time the SNP was compared to the Third Reich, Salmond presented on giant posters as the stereotypical Scot pickpocketing an English voter… One important point is that criticising the SNP surge without evidence that they have actually lied to the electorate (because a clearly deceived electorate – as we were with Blair in 1997 – is not culpable) means directly criticising the electorate that is planning to vote for them, rather than the party itself. At the best of times, this is a dangerous move for any politician, as exemplified by Farage attacking one of his studio audiences during the debates – but a Scottish audience is likely to react even more contrarily to such an attack. ‘Thrawn’, as they say. ‘Oh, you bluddy think so, do ye?’ as Billy Connolly puts it.

It is true that this may simply have been a strategy by Cameron for immediate post-election gain: as Lesley Riddoch noted on polling day “English voters are being primed to overreact hysterically should Labour try to form a minority government on Friday – whether it’s a formal deal that includes the SNP, discreet dialogue or semaphore signals at dusk.” But the Conservative-supporting press campaigned to vilify the people of Scotland (by virtue of their electoral choice), making clear that when the Conservatives talk about ‘OneNation Britain’, we now know exactly which ‘one nation’ they are talking about. It is unclear whether this campaign had traction by bringing underlying chauvinisms to the surface, or created those chauvinisms anew, but one reporter from Nuneaton made clear that benefits claimants, immigrants and Scots were now seen as the three undesirables – perhaps because Scots fulfil stereotypes of the first two groups perfectly adequately down in the shires…

Paul Kavanagh neatly summed up the inherent genius of Labour embracing this strategy on results day: “Labour blames the SNP for its defeat. The Unionist parties went around screaming to anyone who would listen – which would be the BBC and Fleet Street – that the SNP would eat your babies. Labour smiled indulgently on the antics of Ian Smart when he called the SNP fascists and supporters of the Nazis. Labour looked upon a mildly left of centre social democratic party and it saw a scary monster. Then they blamed the SNP because voters in England were afraid of the imaginary monster that Labour had invented.”So Scottish Labour contends that even the possibility of SNP influence was sufficient to scare voters in England from Labour – and if that is the case, then perhaps the Union is more finished in the hearts of England than we previously thought. As Ian Bell put it yesterday: “If true, what does it mean? That Scottish voters should have declined the choice of a lawful party and declared themselves subordinate to the prejudices of English voters? If that’s the case, there’s no place for us within the UK. Does it mean, equally that voters in England will simply not countenance the participation of properly elected Scottish MPs within a government they regard as theirs alone? If so, the road is the same and it leads in one direction only.”

That Labour failed to contest the narrative of a ‘threat’ from Scotland, thereby falling neatly into a Conservative trap, is perhaps the saddest aspect of this. It is not hard to dismantle the argument of the ‘Scottish threat’: England has 82% of the MPs, therefore an automatic veto with a ‘majority’ of 533 votes. This was an obfuscation of a constitutional issue/problem as a political issue/problem: English MPs have total control of Parliament, and always have had – no vote counter to that would happen without 219 MPs in England choosing to vote with Scottish, Welsh and Northern Irish MPs. One of the very reasons why there is such widespread support for English Votes for English Laws in Scotland, is not because of widespread support for Scottish Conservatives (at this general election, despite a strong campaign by Ruth Davidson, their vote share fell to 14.9% – its lowest ever since they were founded in 1965): as Neal Ascherson put it yesterday in The Guardian “I think most Scots feel their MPs should not decide purely English issues. After all, before devolution they had 292 years’ experience of English MPs outvoting the Scots on Scottish issues.” Surely, given his arguments for the Union in the run-up to last September, Miliband could have come out fighting AGAINST the ‘othering’ of Scots, pointing out the basic arithmetic that undermines the portrayal of Scottish electoral choices as an ‘external threat’, and making Labour the party of an actual United Kingdom. During the Referendum campaign we were told ‘Scotland should lead the UK – not leave it’. Apparently that leadership is very much not wanted – and indeed any idea even of influence is to be shunned.

Personally, I prefer not to think that ‘fear of a Scottish vote’ was really a strong motivating force, as I would rather not think that we were so reviled by an electorally significant portion of England. Because if so – why is there still a Union? And – as an equally logical corollary – can we stop referring to it as a Union, and just say it is an Empire? (The definition being, ‘Supreme political power over several countries when exercised by a single authority’. A contentious question for another post, I think…)

As McWhirter put it “the entire post-war edifice of Scottish politics was pulverised into dust” last week. Nor were Labour and the Conservatives the only parties punished in Scotland: with less than 5% of the vote, LibDems paid out £170K due to lost deposits in 340 seats (my sister was apparently one of those candidates, when none of us knew she was even standing: ‘shy LibDem’ syndrome, perhaps?). Ascherson, again: “the meaning of last week is that the SNP has been adopted as ‘Scotland’s party’, not least because it has no strings to London.” If parties were smart, they would reconstruct themselves as autonomous units, in order to produce the required clear water for the electorate in Scotland to trust them again. If they simply don’t care, they won’t. Which will send its own message.

Does this election, as some have said, truly mean the launch of a trajectory towards a federal UK? Unlikely – as noone is interested in federalising England. Is it really so ‘impossible’ that Scotland’s vote for home rule will be ignored? Yes, of course – regardless of how much this vote was a clear mandated call for more powers for the Scottish Parliament than Smith was offering, the arithmetic is clearly on the side of the Conservative government. But such a strategy of turning a blind eye is somewhat fraught, if you truly are intent on preserving that Union, as opposed to consolidating short-term political advantage, creating, as it does, many avenues that fast-track independence.

As Alan Bissett noted, Scotland having to suffer another five years of Conservative-led government is a direct consequence of the ‘No’ vote – I don’t think that is an unfair observation, as one of the most resonant arguments in the Referendum campaign was that independence was the only way that Scotland could guarantee having no more Conservative governments dictating to it from London without a Scottish mandate. With a ‘No’ vote in place, it was only a matter of time before it happened – but what I find particularly distressing is that the left vote seemed to take a vacation in England, when the incumbent government had such a poor record on the economy (massively increasing the debt, failing to get the deficit down to 65% over the time period that it originally said it would completely eliminate it), and was promising to continue its savage cuts to a welfare state that were ideological and irrelevant (if not actively counter-productive) to getting the economy to recover. The positive attributes to what Eddy Robson dubbed “The best crisis since the abdication” were body-swerved in favour of Austerity Max.

A week before the Referendum was lost last year, Robin McAlpine of the Common Weal wrote the following on Bella Caledonia: “A butterfly rebellion is coming close to winning Scotland away from the forces of the British state. I think we’ll do it, but either way, they can’t beat us. We are already half of Scotland and we keep growing. They are weak and we are strong. When the people of Britain see their titans defeated by a rebel army who used infographics and humour, what is there to stop them following? England needs its butterfly rebellion as well.” That conclusion seems hauntingly prescient now, as we ask the question: is there any potent left remaining in England? Labour was hardly a radical left platform at this general election, but if an underlying xenophobia was really more powerful than the prospect of an unleashed Conservative government, indeed was strong enough not just for people to go to the Conservatives but to move straight to UKIP instead of a fundamentally right of centre Labour party, then what hope is there for any longevity for the concept of Britain?

Cameron can be bold – but it is hard to see how anything that he does is going to do other than pass the historical title of ‘Last Prime Minister of the United Kingdom’ to his successor.

 

“For the long dark decades of Tory rule, Scotland was told that getting a government we didn’t vote for was simply the price of the Union. Now the tartan high heels are on the other foot, England might get the government that Scotland votes for. Ed, Davie, Nick and Nige scream that Scotland’s choices are illegitimate and unwelcome. But to no avail, no one in Scotland is listening to the four hoarse men of the Jockalypse.” (Paul Kavanagh, 7/5/2015)

 

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From Holyrood to Hollywood: sitting back and watching the movie of the day unfold, and the distraction of the Yes/No interlude

It starts the same way as September 18th did: good luck wishes coming in from around the world. Fewer than before, and less galvanised by the reflected energy that we emitted to the world last year, less excited, less envious of our moment. I feel similarly: there is a curious, slightly depressed sense of anxiety about today, despite the bright sunny blue sky contrast to last year’s overcast grey day… The feelings of today put me in mind of a Sylvester Stallone film, where he is sent back to Vietnam to rescue US prisoners. Having been given the briefing details (and while still behind prison bars) John Rambo asks: ‘Do we get to win this time?’ I guess that nothing can hope to take the place of a win last September – in practical as well as emotional terms, this election is NOT a rerun of the Referendum.

Because our moment has passed – at least for now. But, surprisingly, it seems that the ones that have the greatest difficulty getting over it are not the ‘Yes’ people. Nicola Sturgeon drew warm applause during the last leaders’ debate, when she pointed out that the people going on about a second (‘Fourth, surely?’ Ed.) referendum were not the SNP, but the Unionist parties – in particular, Labour. And out on the stump, that perspective is replicated: Conservative candidate for Danny Alexander’s Inverness, Nairn, Badenoch & Strathspey constituency, Edward Mountain, says that Inverness and Scotland need to ‘move on’ from the Referendum. Would this be because that was one of the 15 Westminster constituencies that actually voted ‘Yes’, perhaps?

So – as I began my first post, back in July last year…why are we doing this, again?

This reminded me of a truly bizarre letter sent into The National on the eve of Xmas last year, by one Sandy Wilkie. Again, he wanted the world to ‘move on’ from the Referendum, to deal with ‘real issues instead’. To be fair, at the time, Wilkie – although couching his hubris in some pomposity regarding ‘Nicola Sturgeon has yet to reply to my e-mails offering her an olive branch’ – was merely echoing the increasing clamour from those victorious No campaigners, as the polls began to look disturbingly solid for the exchange between Labour and the SNP in terms of polling percentage for Westminster. There was, at the time, a desperation with which people were urged to ‘move on’ as though this was an overnight situation that had suddenly arisen and could be as easily dismissed, like a fire in a flat, that once dowsed could be forgotten about with little consequence…rather than something 60 years in the making.

I read his letter at the time with some disbelief – he simply seemed incapable of grasping that the desire for independence was not a way of putting off discussing solving the problems of the day: that decision for independence came from the long, painful dawning realisation that it was the only way that we were going to GET to address those issues, as the great ‘family of nations’ of the Union was a lie. Change has not come from the Westminster system over many decades – and clearly will not, because Scotland’s problems will never be any kind of priority (electoral arithmetic proves this – just listen how easily the prospect of even a full 59 SNP MPs has been dismissed as ignorable in the last couple of weeks by the two main parties) in the Westminster structure, certainly not to the degree that means it requires attention. Hence independence.

And so the problem that the Referendum was supposed to resolve still exists – indeed, is clearer than ever before. The answer and resolution to the problems that Wilkie cites {dear god he even invoked Braveheart…I’ll bet he calls himself a ‘proud scot’ as well} of foodbanks, poverty, NHS funding, the environment and the democratic process still comes back to what he called ‘Yes/No’ – solved by the natty hashtag #OneScotland, which began to sound suspiciously equivalent to #OneNation Labour. Those individual problems ARE what the collective ‘Yes/No’ was supposed to solve. You can talk about these problems as much as you want – the solution to them is entirely within ‘Yes/No’ – and nowhere else: any other ‘solution’ is merely robbing another part of our society and impoverishing it at the expense of other areas, simply because another solution will not be permitted because of the representational obstacle that ‘Yes/No’ was meant to remove. In case Wilkie hadn’t noticed, the best political and cultural minds in the country already had the conversation – and it was considerably longer than the one day that he reckoned would bring together a ‘unified force’ to deal with these issues – and by and large they came out on the same side for September (clue: not that of the 55%).

Ultimately, I found myself rather sad from reading Wilkie’s letter, as it made me feel that I had personally failed him – the fact that, even after 3 years of the campaign, he still had not noticed exactly what the Referendum was about – as though, maybe, it didn’t go on long enough for him to get it? (How much longer does a campaign need to be??) It made me wonder if at that stage he was simply a Hangover ‘No’ that after 3 months was only at the beginning of understanding the mistake that he had made.

So this General Election is NOT a rerun of the Referendum, and is not ‘rerunning old battles’. As Lesley Riddoch noted 3 weeks ago, rather than this being a Referendum rerun, it looks like GE2015 will be a referendum on Home Rule – and gaining an emphatic ‘Yes’ in the process. A demand for the substance contained in the rhetoric of The Vow, not the homeopathic Emperor Smith’s new tax powers. A calling in of that ‘second chance’ given to the Union.

Labour are keen to say that they are the only ones that have brought the necessary changes in the past to Scotland…but they omit, of course, to mention that having abandoned their Home Rule roots as they were assimilated into the Westminster establishment, they have only made subsequent moves – such as establishing Holyrood – when under the duress of the SNP gaining political ground from them. Even when Labour’s executive have been pushing for change in Scotland, as in 1978, the votes of 34 Labour MPs against their party rendered a devolution vote for Scotland effectively impossible. The ‘Party of Devolution’? Only when they are given no choice.

So the SNP drives that political and constitutional change – as much as Labour have thus far been able to take the credit for something they were being forced into – as a simple strategy to emasculate the support for independence. Which is why the astonishing lack of any serious moves towards further devolution in the wake of the Referendum, as a means to again neuter the rising calls for more powers, is an amazing piece of arrogance. But yet again, it underlines my initial point – the mass move towards independence last year was not based on some romanticised historical whim, but on the modern post-war political reality of Britain, that there is no other way forward any more: if Labour have traditionally been the party of ‘giving Scotland concessions but only under duress’ – and the most they would do this time under Smith after the Referendum is token tax powers and road sign design, then the well is truly dry. This is why ‘DevoMax’ – everything except defense and foreign affairs – is a unicorn that does not exist as an option for Scotland, and never will: they ain’t giving any more. (Perhaps the reality of Michael Forsyth’s recent point in the House of Lords has finally dawned on them.) So the only way forward is self-determination.

The move towards independence was not a flash-in-the-pan, not a distraction from ‘real issues’, but a practical realization that Westminster has no interest whatsoever in the issues affecting Scotland, unless they are so bad that they affect the south of England. And why should we have to wait until that point for this broken system? The Referendum is part of a continuous mounting resistance to the old order, which only stops when that order is gone – ‘Keep Calm & Dismantle the British State’ shall be my t-shirt (we always need a t-shirt – or a nice shiny new campaign badge).

Will the result tonight – even if it WAS the highly unlikely 59 seater ‘wipeout’ – really compensate for losing last September? I remember 1973’s ‘The Sting’, wherein Robert Redford and Paul Newman play two 1930s con artists, avenging themselves on Robert Shaw for killing their con partner Luther Coleman. At the start, Newman warns Redford that he doesn’t want him turning round at the end, having beaten Robert Shaw, and saying ‘it’s not enough’ to make up for Luther’s murder. Sure enough, by the end of the con, Shaw has been beaten – and Redford turns to Newman: ‘You’re right, it’s not enough.’ Then, as Newman’s character tenses for a fight, Redford’s starts to laugh – ‘but it’s close!’ Even though we will probably ‘win’ tonight, I suspect that the revenge will not be enough for what we lost. But this is about more than revenge, and expunging the self-interested that are fraudulently posing as our representatives – we still have to work forward, towards independence.  And wayposts on the way are a solidarity and consensus of argument for more autonomy and powers, with which it can be demonstrated to the Scottish people that we can govern ourselves perfectly well enough to be independent – and perhaps to demonstrate to the rest of the UK that maybe they should be looking to the North for ideas for how to run their patches, too.

 

“Sovereignty in Scotland lies with the people. If Westminster elites say No to a reasonable plan for exercising that sovereignty within a loose federal Union, the people might say Yes to independence next time.” (Dr. W. Elliot Bulmer, author of ‘A Model Constitution for Scotland: Making Democracy work in an Independent State’ (2011) and ‘A Constitution for the Common Good: Strengthening Scottish Democracy after 2014’ (2014))

50 Shades of Austerity: Poles Apart, or an Example of Economic Masochism?

I watched a summary of yesterday’s Sunday Scottish Politics half-hearted Leaders Debate this morning. It was not an entirely wasted experience, however – as much as the broadcast little resembled what I understand buy a ‘debate’, I am informed that the hectoring and interrupting that Murphy so frequently deploys is actually a debating technique, called ‘gish galloping’ (thank you, Patrick Roden…). The ‘technique’ involves lots of small simple questions or accusations regularly being hurled at your opponent while they are speaking, never giving them time to answer. This works particularly well if you know that the answers take time to give a proper answer to – because you can then deny the environment that such an answer can be given in…providing you have a moderator that is not going to switch off your microphone.

One SNP person, with 3 from the Westminster parties ganging up to shout her down and talk over her in a BBC studio, with one behaving like the playground bully – it was somewhat depressingly familiar to what one saw during the Referendum campaign, and highlights the difference when other parties (say, like the Scottish Greens, who are looking somewhat more relevant than the LibDems to Scottish politics right now…) are involved to break the onslaught of establishment dogma, and perhaps also explains why Nicola, Natalie and Leanne did so well during the Leaders’ Debate. But there is much that is different between the Referendum and this General Election, in terms of the coverage – for one thing we now have a newspaper!!! This makes my work very different, as it is less a role of collation of data and extemporising my own viewpoint, compared to largely passing information on to the comparatively few people not reading one or two key sites, or ‘The National’, rather than generating new copy myself.

Another difference is the interaction with polls: in ‘Yes’ we largely ignored the polls, except to look for signs of slow growth over time. By June/early July I know I was a little alarmed when we were not turning the corner of 50:50, as there was not going to be time to deflect counter-propaganda if we did it late, so hoped that we might sneak over that threshold on the day, without any polls to expose our rise. Of course, we had the worst possible scenario – a week to go, YouGov arrives, the propaganda lie of ‘The Vow’ was delivered in response, and we slumped at the last day.

But now the polls have a very different role. From the point of Johann Lamont’s resignation, the SNP has soared in the ratings, making this our General Election to lose. This means we are in the ‘No’ campaign’s starting position, three years ago, but once again with most media outlets turned against us…fortunately with Labour and the Conservatives taking some flak as well. YouGov, which always gave fairly low ratings of ‘Yes’ popularity, have now become our new Best Friends Forever as far as SNP versus Labour support goes. And also – even more unlikely as an ally – Conservative peer Lord Ashcroft’s extensive polling has indicated that dissatisfaction with Labour is greatest in those seats that they hold with the largest majorities.

But, within that, there was one weird statistic of his that made me do a double-take.

In a question on austerity, 57% of those that he polled did not want any more austerity – which does not seem so surprising – but 43% DID. Closer analysis shows that his 57% was made up of 36% yes austerity was needed but no more, and 21% that it was never needed, but, yes, 43% said that more austerity was needed. Say what? I mean, I could understand if it was a class thing, perhaps a poll done in Mayfair or the heart of Kent, but 43% based on national polling? What is, this some sort of inferiority complex, that the government in charge ‘must know better than me’? ‘Punish me – if it hurts, then it must be good for me’, is that it?

Well, let’s take a look and see how that is working out – first looking at the social impacts of austerity, and then at those all-important ‘economic benefits’ – shall we?

David Cameron was recently supported by a letter from 103 businesses in the Telegraph saying that if Labour got in, it would be a disaster. But would it really make such a difference, or is this simply a sign of traditional prejudices? Miliband has pledged to limit zero hours contracts to twelve weeks, rather than letting them run for a year, but (as those of us who have been on renewable contracts know, where employers will end them as the two year mark approached, when you would actually acquire some rights as an employee) that just means the turnover period is faster. Ed Balls, Labour’s Shadow Chancellor, knows all about zero hours contracts: he recently claimed that he would pass legislation to ban zero hours contracts – shortly before it emerged that that was how he employed four of his staff. Ed has committed to spending £800 million in Scotland, but that is somewhat offset by Scotland’s anticipated £2.4 billion share of the forthcoming cuts that he has pledged not to overturn if he gets into office. As one wag correspondent put it on April 1st: “Cracking April Fool’s story on the front page of The Herald today – Ed Balls pledging to ‘end Tory austerity’. Who makes these things up?”
Ed still cuts a more human figure than Ian Duncan Smith, the Secretary of State for Work and Pensions, though. He has planned £12 billion in welfare cuts for Scotland alone over three years of the next parliament, which he claims will be cut from the welfare budget without affecting the poorest in society.

It is fair to say at this time that no one is pointing out the positive aspects of welfare in terms of benefits to the economy, not just for ameliorating inequality, but also through business promotion. A recent US study, demonstrating the impact of welfare dimensions to business development and success, recently showed a dimension that we are missing in the UK. Looking into expanded foodstamps, they found that it provided new businesses with a safety net to fall back on: if business is about risk, or managed risk, then knowing that you will not compromise the security of yourself or any dependents is a key consideration. The research showed that there was an increase of 16%, in other words a greater likelihood for people to start up their own business, if they knew that they could rely on this welfare availability…although most of them never used the facility – that was not the point, it was the idea of managed risk. Similarly, US Government healthcare means people at retirement age are more likely to start their own businesses, as they no longer have to worry about relying on an employer providing health insurance. Those families in the US that qualified for Children’s Health Insurance were 31% more likely to start their own business, than those in the slightly higher income bracket that failed to qualify. Similarly, France continues to pay benefits to long-term unemployed people starting a business, finding that they are 25% more likely to start a business than without.

But the ideological changes driving these Conservative cuts, under the veneer of ‘necessary austerity’ do not allow for that perspective. They do not believe in the state’s role in providing support, and come what may they will try to remove as much of that structure as possible, while they have the pretext of the deficit.

And Scotland will still have limited ability to protect itself from those welfare cuts – again, thanks to Ian Duncan Smith’s last minute intervention before the Smith Commission report was finalised. Only 14% of the total welfare budget is to be devolved, including benefits for disabled people and carers. In 2017, under the Smith proposals (if they ever see the light of an Act of Parliament), the Scottish Government will take over responsibility for the successor to the Disability Living Allowance, called the Personal Independence Payment (PIP), with a 20% cut in the relevant budget. This means that 100,000 working age disabled people will see their benefits reduced, the equivalent of cuts of £300 million a year, a loss of around £1,120 per person affected. Across the UK, this will see a million people affected by 2017/2018.

The policy of ‘sanctioning’ welfare claimants has been a particularly dark ‘costcutter’, with documented cases of suicide resulting: from October 2012 until September 2014, 81,980 Scots experienced 143,671 sanctions (meaning no state benefit for at least 4 weeks), equivalent to £32 million in Scotland in 2014. Over the whole UK it was 355 million, up from a mere 11 million sanctioned in 2009-2010. Former senior Scottish Medical Officer Sir Harry Burns (see NHS Scotland: Always independent, now at the TTIPing Point of Privatisation ) has been highly critical of coalition policies on welfare, chillingly talking about the legacy of the seventies and eighties unameliorated industry cuts in Scotland, which destroyed communities, boosted problems of violence and substance abuse, until Scotland has the worst drugs problem in Europe. He is well worth listening to in conversation on Bateman Broadcasting online as he talks about the causes of ill health from this political legacy, and noting the statistically significant connections between percentages of ‘Yes’ votes and low life expectancy in a given area: these were people who knew the Westminster system is not working, with the evidence of their everyday lives. Burns describes sanctions as “a judgment on the poor”, and those sanctions are only due to increase with the rollout of the Department of Work and Pensions’ new Universal Credit system, which reaches Glasgow just after the General Election.

A pilot scheme for the new Universal Credit system was introduced in Inverness last year, leaving families with only beans on toast for their Xmas dinner, as there was a 5 week gap transferring from JobSeekers Allowance to Universal Credit, with no money in between. The transition of the system – never mind the smaller level of support offered to fewer people – seems to be deliberately creating gaps for people to fall through. Certainly, jobseekers in the UK receive very little help in finding work. compared with other European countries. Alex Neil, Cabinet Secretary for Health and Wellbeing, has argued in the wake of the Smith Commission for immediate legislation to abolish bedroom tax so that the Scottish Government can redirect the £50 million being spent on mitigating the effects of that tax.

Child benefit is now at its lowest point (0.6% of GDP) since 1977 (it reached a high of 1.3% in 1980). In some areas in Glasgow 1 in 3 children are living in poverty, and by the end of the coalition government’s term of office, the value of Child benefit will have fallen by 14%, against a backdrop of increasing costs. Accompanying this, the Scottish Trades Unions Congress highlights that this is the fifth consecutive year of a drop in the median wage in Scotland. Women working part-time have experienced the biggest losses (down 11.6%), but financial sector directors’ salaries went up 23% in last year alone.

This has seen the rise in the phenomenon of ‘the working poor’: Professor Steve Fothergill of Sheffield’s Hallam University recently noted that Scots in work have lost £730 million a year as a result of the coalition’s welfare reforms. 48% of the £1.5 billion (or £440 for every working adult) losses would be met by households with at least one working member, with £960 million of the cuts going on families with young children as well as disabilities and health problems. So, for example, a couple with 2 children on average would be £1480 worse off, single parents with one child £1770 poorer, single parents with 2 or 3 children £1850. Sick and disabled households are losing £600 million a year in total. Although many of the effects of the cuts have been mitigated by the Scottish Government refusing to pass on the 10% cut in council tax benefit payments, and non-implementation of the bedroom tax, the impact is still severe and it drives people further into poverty: 43% of people in poverty live in working households, although the low-paid are better qualified than ever. The UK’s minimum wage level lags behind the level in Luxembourg, Ireland, Belgium, Germany, France, Netherlands, and the Trades Unions’ Congress has highlighted the problems of ‘living wage blackspots’, e.g. Birmingham Northfield, where 53.4% of people earn less than £7.85 per hour, blighting entire areas. This led to the STUC calling on all Scottish parties in the run-up to the General Election, to restore trade union freedoms and collective bargaining, the lack of which prevented them from defending those who suffer most from low pay and insecure work.

Foodbanks first appeared in the UK under the 13 year Labour government, and the disability benefit scheme of Work Capability Assessment was introduced, with its notorious implementation by ATOS to remove as many disabled claimants as possible from benefits. 71,000 people in the oil-rich nation of Scotland now depend on foodbanks (the figure stood at 7,500 four years ago). In December, 10,500 people visited the Trussell Trust’s Scottish foodbanks, a 13% increase on the previous year, and a third of them were on low incomes.

80,000 people in Scotland are working on zero hours contracts, 180,000 on council waiting lists, 820,000 Scots in poverty. The least wealthy 30% of households (half of whom are headed by someone employed) in Scotland have no savings or pensions, and own only 2% of the wealth of the country, property and personal belongings – they are most likely to be single adults or lone parents. But the most wealthy 2% own 17% of the wealth in Scotland.

At the same time, although Scottish rents are rising at their slowest for over two years (1.1%, with inflation becoming zero for the first time since records began in February 2015), the numbers of late rent payments are still increasing. This has all resulted in a predictable rise in personal debt. A PricewaterhouseCoopers report (24/3/2015) states that the average UK household is set to owe close to £10K in debts of personal loans/credit cards/overdrafts by the end of 2016.

The evidence from this blizzard of statistics (which is testament in itself to how endemic the problem is, with the ever-mounting numbers of studies being carried out) is that this is an ‘economic recovery’ based on low wages, rising insecurity for those in and out of work, rising household debt, and a failure to ‘rebalance’ the economy away from the financial sector. Any recovery in living standards is still to be seen, with shockingly weak reforms to the cause of the current crisis, namely the banking sector, and a lack of preparation or actions to prevent a similar crisis in the future.

The UK Government’s budget deficit (the difference between expenditure and revenue raised) peaked at £150 billion, and now stands at £80 billion. The Institute for Fiscal Studies says that eliminating the annual deficit will require departmental cuts of 14% and 750,000 job losses. UK national debt has now trebled since 2008 to £1.4 trillion, because tax receipts plummeted with the collapse of the economy in 2009. This was compounded by the Thatcher-style cuts policy of the 2010 coalition, which increased the downturn of the economy, and thus the welfare bills. The only economic growth is coming from £130 billion of subsidised mortgages, triggering another property market bubble (particularly in London – although the Centre for Economics and Business Research is predicting a fall in London’s house prices this year of 3.6%, after “years of overperformance”), with rising house prices encouraging consumers to borrow again. This, of course, creates a mini consumer boom…which only lasts until interest rates start to go up.

Thus, the coalition government’s economic strategy is short-term, as it is based on a housing bubble, and transferring state debt to households (by 2020, the household debt to income ratio is forecast to be more than 10% above pre-recession levels, according to the Office of Budget Responsibility), and undermining sustainable long-term growth. The Coalition has overseen the weakest recovery for 200 years, where indeed the only factor exerting a positive influence on living standards across the UK is the falling oil price – which is nothing to do with government policy (although their response to it is).
Paul Krugman, 2008 Nobel Prize winning economist, noted recently in the New York Times that although growth resumed in 2013, the income per head of the population is only now reaching pre-crisis level, giving Britain a worse track record than during the Great Depression. He went further, in terms of the evidence that political response by the public to the economy is only based on very short-term perceptions.

In brief, he suggested that for politicians (NOT for the economy) the best strategy would be kind of similar to one that I used to employ in games of SimCity. Your popularity as the leader of your City was dependent on taxation, but your ability to build your City and keep the people happy, was dependent on taxes. So you could keep taxes incredibly low throughout the year, and then just before it came to the end of the financial year, you kicked taxes into the stratosphere to get a massive amount of revenue to compensate for the rest of the year – then dropped taxes way down again straight afterwards. In the game, the public had long-term, rather than short-term, memories, so would ignore the recent pain of the high taxes. What Paul suggested as the best route for political success was an inversion of that approach: as voter memories are only interested in the last couple of quarters, not the longer term picture, a successful strategy to stay in power would be to deliberately impose “a pointless depression on your country for much of your time in office, solely to leave room for a roaring recovery just before voters go to the polls. That’s a pretty good description of what the current British government has done, although it’s not clear it was deliberate.”

He is far from alone in this analysis, as noted by George Kerevan. Foreign investors hold £400 billion (a quarter of the total market), and are selling off their holdings of British Government debt at a rate of knots – a massive £14 billion went in January and February, far faster than during the credit crunch. The usual buyers are refusing to pick it up, as it has become toxic, because Britiain’s current account deficit (borrowing required to pay for imports, when a state does not export enough) reached 5.5% of GDP last year, heading for a record 6% in 2015. Productivity has been falling for many years (which even the International Monetary Fund has raised concern about, as a ‘major risk to growth’), and the only reason the City of London stays afloat is because of its low regulation tax haven status, which allows foreign investors cheap access to the EU market of 500 million customers (usually providing a convenient 2.5% of the UK’s GDP in the process). Except, of course, that this is threatened by the EU exit referendum, which will render London of no interest, next to Paris and Frankfurt, as choices for basing your trade. Uncertainty on the financial markets for a Scottish Referendum? You ain’t seen nothing yet…

And for those of you – evidently into masochism, if you have stuck with me so far – who are still wondering, this is why I am shocked that 43% across the UK could still be saying ‘more austerity is needed’.

Really? Inequality is rising, poverty increasing, which means crime rises too, society becomes less safe – and all because of a strategy that is failing to work, but generating an inflatable model of a recovered economy, relying on a housing bubble. In the age of Christian Grey, this appears to be a population that truly wants to be punished.

Austerity is not a way forward – it never was, and certainly isn’t now, with the reams of stats above. Austerity is an ideological transformation of the British state, while failing to address the economy it purports to be helping, and destroying social cohesion and the fabric of society along the way.

It is time for something different.

 

“Very few British academics (as opposed to economists employed by the financial industry) accept the proposition that austerity has been vindicated. This media orthodoxy has become entrenched despite, not because of, what serious economists had to say.” (Paul Krugman, 2008 Nobel Prize winning economist)

Aberdeen’s Foodbanks, Scotland’s Curse and the Price of an Oil Fund

I remember a conversation with a ‘No’ voter, early in the Referendum campaign. “It’s all about the oil, really, isn’t it?” she grinned. I felt something groan inwardly, deep inside me – a combination of the demoralizing thought of just how much talking I was going to have to do, with so many pieces of information, but full in the knowledge that I probably was still not going to get past that initial, obviously deep-rooted idea. Scottish independence, it is all about greed, a mistaken belief that Scotland would be rich without those ‘broad shoulders’ of Westminster to manage the resource for the child nation to the north…

Of course, it was not about oil – the demonstrations of the strengths of Scotland’s economy without oil being almost directly equivalent to the UK’s, showed that oil was a surplus benefit, and not something that the Scottish economy was hung up or overly dependent on (not like the financial services industry, which has a few percent too much of our overall economy, leaving us slightly vulnerable to the vagaries of that particular market).

And oil does not automatically equate to wealth, despite appearances to the contrary. Just look at the reports of the Aberdeen foodbanks being emptied. A very different picture to when I went to work there in the mid-eighties. I was rooming in an elderly couple’s house (all that I could afford, as I was in part of the oil industry that made the profits pretty much exclusively out of what it charged Shell for staff time), and that first weekend, another guy who was renting another room offered to show me around, and introduce me to his family. I remember we walked over to his brother’s place for lunch, just as his brother pulled up…in a brand new Lotus sports car. I asked what his brother did: “Aw, he just works in fish packing.” This impression of a city of riches only grew when that night, the room-renter confided in me that he had a cocaine habit, but it was ‘not a problem’ – I just was not to tell the elderly couple about it…an elderly couple who had microwave ovens at a time when they were actually pretty rare things.

Thirty years on, and the Silver City is a grimmer place to be, with starker inequality than ever before: 1 in 4 children are born into poverty in the northern half of the city, average house prices have increased by 88% since 2005 (compared with 3.3% in Stirling), and those NOT working in oil and gas are on close to the national average wage, making things difficult as prices increase – you cannot pay £800 pcm when on minimum wage. A recent survey noted that Aberdeen was countering the Scottish rental trends, with a fall in prices, in an attempt to adjust to the changing market with the collapsing oil price – but they are still well above the Scottish average: the average rent of a 2-bedroom property fell 1.2% to £972, with a 3 bedroom on £1,216, down 7.2% on last year, whereas the Scottish average figure for a 2 bedroom property was £654, up 6.8 % this last quarter on last year’s figure. Community worker Ian Armstrong notes the opportunities missed: “When l came to Aberdeen in the first instance the government should have had something in place to protect the city. We have missed the boat on an oil fund.”

And here we have Aberdeen – the oil and gas capital of Europe – with a call by Aberdeen City Council for a summit on the crisis in the oil industry. It starts, of course, with the oil price at around 60 dollars a barrel, when it was averaging 109 dollars a barrel last year ( http://chartsbin.com/view/oau ), the shift down apparently due to a concerted US/Saudi Arabia strategy to hit both Russia and Iran (although Saudi Arabia may also be trying to undermine US fracking expansion). With 90% of UK reserves in Scottish waters, Scotland is the largest oil producer and second largest gas producer in the EU, an industry that supports 200,000 Scottish jobs, so the N-56 group’s mid-March report argued for co-location of policy makers responsible for oil and gas taxation and regulation (i.e. UK government) with the industry, in Aberdeen (instead of London), mirroring Norway’s strategy in Stavanger, to make them more responsive. They also argued for a long-term economic tax approach, rather than unstable short-term tax grabs (which the current coalition government were heavily criticized for, early in their term of office). Although this prompted North Sea-based oil companies to divert their funds into much needed research and development, in order to avoid the new production taxes, critics have observed that the big oil companies had mistakenly invested heavily in new oil exploration such as oil sands, deep water and arctic fields when the price was high, rather than building up reserves, and are now ill-placed to deal with a low oil price – hence the prospective job losses.

However, some people are keen to put a glossy glow on the loss of all those Scottish oil industry jobs: PwC claim that oil prices at 50 dollars a barrel could boost employment across the country by 91,000 over the next 5 years, with GDP rising 1% per year between 2015 and 2020. Their model adjusts the rise in employment figures to 37,000 if the price is $73 a barrel, and only 3,000 if the price is $108 a barrel. Long-term, the price of oil to 2040, as predicted by OPEC, is expected to be $100 per barrel, reflecting a global rise in costs of production.

So, back to that hoary old question: why do we not have an oil fund, to protect those in our oil industry when the price is low? I mean, it is not as though this would be an unusual strategy for oil-producing countries to have: Iraq relies on oil for 90% of its revenues, yet it along with the UK are the only two countries in the world not to have a wealth fund. Another unusual strategy was not to have the oil state-owned: globally, 70% of oil is nationalised, with only 10% of the remainder in the hands of the large companies, as we have in the UK.

What about the practical economics of having such a wealth fund (which Labour like to call a ‘resilience fund’, just so that it sounds different from what the Scottish Government are arguing for)? Would it ever have been feasible to acquire such a thing?

Emphatically, yes – if one subtracts Scotland’s total tax receipts since 1980 from the average for the UK, Scotland has contributed a surplus of £222 billion in today’s prices, an average of £6.73bn per annum. But what about that persistent idea that Scotland has ‘always’ run a deficit, amounting to £15 billion as per the ‘Better Together’ propaganda sheets? It crucially ignores the fact that Scotland only ran a deficit because it was in the UK. Even before you factor in the savings that could have been made if Scotland hadn’t been subject to UK spending decisions (most obviously on defense, getting rid of Trident, never mind supporting needless London infrastructure and vanity projects), independent analysis shows that Scots subsidised the rest of the UK by £222bn over that period.

[This casts the recent hilarious UK Government campaign to post small union flag plaques saying ‘Funded by UK Government’ on a variety of public projects and buildings throughout the UK. At the time, it was widely seen as a response to growing support for Scottish devolution and independence – but perhaps it would have been more accurate to have the plaques say ‘Funded by the Scottish TaxPayer’. 🙂 ]

To continue: the economist Professor Brian Ashcroft (former Scottish Labour leader Wendy Alexander’s husband, and he was a strong advocate for the ‘No’ campaign during the Referendum, so does not exactly go looking for arguments against the Union) found in 2013 that Scotland’s notional deficit was entirely down to having to pay interest on the UK’s debt (much of which was run up by aforementioned vanity projects): over 32 years, the total value of Scottish tax receipts is £1,425 billion, with public spending in and for Scotland at £1,440 billion – there, in that difference, is the figure of £15 billion. “But, Scotland’s share of UK debt interest amounted to £83 billion at 2001-12 prices. Subtracting this from total estimated Scottish spend of £1,440 billion we get a debt interest adjusted estimate of spend of £1,357 billion. This means that Scotland was in overall surplus by about £68 billion (£1425 billion-£1357 billion). A very modest oil fund (assume 3% interest, and then think – again – about the reduced public spending without having to subsidise those London vanity projects) would have protected Scotland for many years. In early 2014, even the Office of Budget Responsibility was predicting that oil revenues for 2016/17 would be just £3.3 billion . If the oil price fell so far that companies made no profit at all, as is currently the case, and therefore no tax revenue accrued to the Scottish Government, that would make only a small dent in even Professor Ashcroft’s worst-case £68 billion fund.

Harold Wilson may be criticized for promising a Scottish oil fund in his election manifesto and then failing to deliver it, but as he appears to have been subject to an attempted coup to put Louis Mountbatten in as an unelected Prime Minister (due to CIA paranoia that ‘socialist’ meant ‘communist’), his spirit might well legitimately argue in his defense that he had a reasonably good excuse for having taken his eye off the ball. Instead, he gave the oil fund to Shetland, who now, consequently, have a higher standard of living than on the Scottish mainland.

Gordon Macintyre-Kemp of Business For Scotland made a fine point at the start of January in an article entitled ‘The Shrugging of those Broad Shoulders’: “Labour argued against the creation of a Scottish oil fund for a generation. They stated that it didn’t make sense to borrow to pay into a fund [while in deficit], but we are still in deficit [when they are suggesting their ‘resilience fund’] so this smacks of a Labour deathbed conversion to SNP policy.”

But – decades on from those early seventies Labour governments, who missed the opportunity to have a state-owned oil industry – here comes Gordon Brown at the start of March…no longer a Labour Chancellor, but now with a wizard idea: the government should step in, to nationalise the unprofitable fields about to be abandoned. Wait… what? This is worse than closing the stable door after the horse has bolted…as one commentator observed, Brown is continuing his policy as Chancellor of nationalising the losses and privatising the profits, just as he took on the Alliance & Leicester’s toxic debts into public ownership and sold off the healthy part to get the worst possible deal for the public. (Come to think of it, is that really such a socialist approach for a Labour Chancellor?) Does this really help anyone, save for possibly saving jobs in a somewhat notional sense with a deflated market? Well, for one thing, it would really help those big oil companies: the decommissioning costs for oil rigs are £60 billion – half of which would be borne by the Westminster Government. Except that, in public ownership, the UK government would be liable for ALL of it – genius!!

My ‘No’ voter did eventually vote ‘Yes’ in the Referendum – sadly not because of any argument that I could bring to bear – but as I have always said, I wish we had never found the oil in the North Sea, as Westminster would have let us go a long time ago. Now we can only dream of the the oil either running out, or prices staying perpetually low (both highly unlikely in the next twenty years), at which point it might finally act as a trigger for them to get rid of us. And perhaps – as a resource that we are unlikely to ever see the real benefits from – that is the real reason why oil is Scotland’s curse.

 

“…And the oil price is dropping so Tony [Blair] thinks independence is a no-no, although he was still opposed last year when oil was riding high. Clearly the price of oil is as relevant as the price of a bag of sugar. The Unionists do keep going on about the plummeting price – the logical corollary is that there must be a price at which independence becomes a moral and economic necessity. Perhaps they should tell us what that is, then?” (Paul Kavanagh, 9/4/2015)