Sturgeon’s dishonesty on the costs of independence is counterproductive

LAST MONTH the campaign group Scottish Business UK set out the costs of independence to the Scottish economy. It didn’t say anything particularly new, except to point out how much more damaging this was than Brexit (eight times worse than the very ‘hardest’ form) by looking at comparable figures. It was something that had been said but not yet quantified in such detail.

If anything, the report erred on the side of caution because most of its findings were based on Scottish Government or SNP figures. The conclusion was that independence today would cost at least fifteen per cent of economic output.

Nationalists have, at one time or another, accepted all of the individual elements of this. The £10bn ‘fiscal gap’ (or Union Dividend) is calculated every year by Scottish Government statisticians. The SNP themselves have estimated the start-up costs of setting up new government departments. The Scottish Government – at the SNP’s behest – has also analysed the economic costs of disruptions to trade. And the SNP’s Growth Commission tacitly admitted that abandoning Sterling would have major implications for the financial sector, borrowing costs and inflation.

In short, Nicola Sturgeon and her team must know (and privately accept) that independence is not economically viable. The situation is much less favourable even than at the time of the 2014 referendum when the fiscal gap had (briefly) been eliminated by the oil price surge.

Yet the nationalists persist in trying to hide the overall picture with specious waffle – the worst of which is the pretence that independence would somehow be a viable alternative to Brexit, when obviously it would make the situation much, much worse. An SNP spokesman called the SBUK figures ‘ludicrous’, itself a ludicrous statement given the origins of the data.

Ms Sturgeon is not an idiot and, one assumes, she is not trying deliberately to cause mass unemployment and tip Scotland into a new depression. Instead, as we witnessed the annual brouhaha of the SNP conference and the various intimidatory marches organised by uber-nats, we must assume that she is stuck in some macabre internal political dance with the blow-hards in her own party who would push to break up the UK whatever the cost.

She faces the perennial conundrum of how to seem enthusiastic about the cause while putting off any new vote indefinitely. This indeed was the approach she and her ministers adopted at the SNP conference. But this is fundamentally dishonest and, in the end, nationalists must surely confront the truth that independence just is not viable in the current circumstances.

The only plausible approach is to answer the hard questions and deal with Scotland’s economic challenges – including closing the ‘fiscal gap’ – within the UK. In other words, to try to grow the economy and take on the inevitable austerity involved while being supported by the monetary framework of Sterling and with full access to the UK single market.

The SNP is taking the opposite approach: its economic policies are resulting in ever-slower growth, an ever-growing ‘fiscal gap’ and, therefore, ever diminishing prospects for independence.

A version of this article appeared in The Times on 9th November

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Borders towns have a bright future if we play to our strengths

Napoleon called us a nation of shopkeepers. But a nation of shoppers might have put it better. Britain’s appetite for retail therapy is as voracious as it is long standing. But the way we shop changes, and things are changing faster than ever just now.

The move to supermarkets, and out-of-town shopping centres has been under way for years. And now you don’t have to visit a shop to be a shopper. Britain is Europe’s top Internet shopper with one in six purchases made online.

This poses an enormous challenge to the traditional High Street.  The news is awash with famous name is in trouble, from Homebase to House of Fraser. The same trends affect small shops too, not least here in the Borders.

Does this mean our town centres are doomed to a dusty death of tumbleweed and ‘for sale/let’ signs?

Not a bit of it.

The modern economy is characterised by mobility – people choosing where to live, work and invest. The internet then, is also a golden opportunity because it allows more people to work and live away from big cities. There is no more attractive place to do both than the Borders.

Our towns have extraordinary potential because of their superb architecture and their role at the centre of Borders life. Hawick, with its magnificent High Street, Kelso and Duns, with their Netherlandish squares and the historic centres of Jedburgh, Gala, Peebles and Selkirk – unchanged in concept since the days of David I – can all act as magnets of economic vitality and public life.

The future lies in our towns becoming destinations for a broader mix of activities: eating and drinking, leisure, culture, services, specialist shopping and small business.

Our task, then, is to preserve and enhance the attractiveness of our towns while encouraging them to adapt to changing economic patterns.

This month the Council agreed sweeping changes to the planning rules to make it easier for different kinds of business to invest in town centres. At the same time we’re working with property owners and heritage agencies to fund improvements to historic buildings there.

Meanwhile we have set up task forces to exploit economic opportunities in Hawick and Eyemouth, and we are working with government on three separate regional growth deals to encourage investment and innovation across our region.

The Council doesn’t have a magic wand. Government, whether local or national, can’t create wealth on its own. But if we embrace change while playing to our strengths the future is bright.

A version of this article appeared in the Southern Reporter on 26th July

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We need to see off the SNP’s new rural tax

The Scottish Government is planning a multi million pound money grab from rural Scotland – this time by charging for work undertaken by local councils on big wind farm applications.

It is something I raised in the Scottish Borders Council Chamber last Thursday. The move is hidden in proposals to change the fees charged for major planning applications, and could remove millions of pounds from the Borders and elsewhere. Officials have calculated that the net cost to the Borders over the last 5 years would have been about £1.25m if these measures had been in place.

The new measures would divert more than a hundred thousand pounds for every application away from the Borders and into Scottish Government coffers. This is a quite unjustified money grab when most of the work on these big applications is done by the local council.

Currently the fees charged for ‘section 36’ planning applications – a category of major projects that covers larger wind farms – are capped at £18,000, of which £12,000 goes to the local authority – an effective subsidy for wind farms since these amounts do not cover the substantial amount of work that goes into assessing the applications. The Scottish Government is planning to increase fees to £190,000, but will keep the  £12,000 cap on the portion going to the local council, even though council does the bulk of the work.

Scottish Borders Council has already responded to the proposal calling it “unreasonable, unfair and ill-judged”.

My concerns were raised in the media this week, but we need to continue to press the SNP to abandoned what is in effect a new tax on rural Scotland.

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The Growth Commission tries to hide the Big Lie with some small truths

IN the political drama House of Cards, the scheming Vice President played by Kevin Spacey explains how to conceal a big lie by telling a partial truth. This is the tactic used by the SNP’s Sustainable Growth Commission report.

It admits to some of the economic truths of independence – that Scotland’s deficit will be large, that oil won’t cover it, and that the banks will flee south with ‘sterlingisation’ followed by a new currency.

The report’s author, Andrew Wilson, clearly hopes that this partial candour, mixed with some specious assumptions about future growth, will hoodwink the middle class Scots who rejected independence last time.

In doing so he hides the brutal realities of a newly independent Scotland. In fact, anyone who claims that Brexit is economically damaging but independence isn’t is peddling dishonesty because the arguments are analogous. Brexit raises berries to trade, but independence does so many times more. Scotland is a net contributor to the EU and so can expect modest savings from Brexit. But we are massive financial beneficiaries from the UK and so would face a huge hole in our public finances on independence.

It is on this matter that the SNP’s opponents must surely focus now.

At the time of the 2014 referendum we were at the peak of an oil price boom, and so it looked briefly as if Scotland was more or less in balance. Salmond timed it well in that respect. Better Together therefore focussed on the currency issue, creating a sense of uncertainly over the monetary mess that would arise from Salmond’s plans. Wilson’s currency plans are just as problematic as before, but the nationalists can hope to obscure its weaknesses behind the technical complexities of monetary economics.

But they are fighting the wrong battle. This time it must be all about the deficit and the Union Dividend.

The Tories have already calculated that the Growth Commission implies nearly £30 billion less money for Scotland over the next decade. And that is obviously a highly optimistic gloss on the real impact of losing the £8bn-a-year Union dividend, which, as business group SBUK has pointed out, is a ‘recipe for recession’ that would greatly exacerbate the fiscal problem.

If I were an opposition party leader I would ask Nicola Sturgeon again and again if she agreed with the report that independence was worth £30bn of cuts to public services. This would force her either to repudiate the report or admit that she thought this was a price to pay to realise her nationalistic dreams.

There are already signs that Leonard, Davidson and Rennie are on to this. They need to stick to this trail and hound the SNP into confessing the Big Lie.

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Hunt is on for the best new Borders Building

This week sees the launch of this year’s Borders Building Design Awards.

The aim is to encourage top architectural design in the Borders, whether it’s traditional in style, modern or innovative. Different awards go to conversions, houses, non-residential buildings, and there is also an award for the best setting for a new building.

Quite apart from the aesthetic value of beautiful, well placed buildings, maintaining and enhancing our surroundings is of crucial economic importance the Borders. Our future prosperity relies on attracting skilled workers and investment,, and they’re not going to come here because of the big local market or the region’s communication links.

Instead, investors and people choose the Borders for two main reasons. It’s cheap and / or it’s a wonderful place to live. If we’re going to increase wages, productivity and average incomes (currently among the lowest in Scotland) we need to ensure that investment and relocation decisions are primarily for the latter reason rather than the former.

That means looking after our surroundings and a big part of that is ensuring the best possible design in new developments.

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Council Tax and the Borders Budget

Yesterday, Scottish Borders Council passed the administration’s budget for 2018/19 and I was happy to vote in favour. Of course, the ideal would have been lower council tax and even better targeted spending, but given the circumstances it was a good start by the new administration in very difficult circumstances.

The Council has been subjected to years of cuts by the SNP run Scottish Government. At the same time we are having to cope with the ongoing erosion of public services: an education system that is in decline relative both to other comparable OECD countries and the rest of the UK; health outcomes that are persistently below other parts of the UK and most of Europe. A police service that has been centralized and politicized. All of this despite the fact  that the Scottish Government is one of the most generously funded tiers of government in Europe (thanks to the broad shoulders of the UK taxpayer).

Meanwhile the economy in Scotland teeters on the brink of recession, performing worse again than the rest of the UK and other comparable countries, with businesses reluctant to invest under the shadow of continuing threats of a second independence referendum.

It’s fair to say that the nationalist government must be the most inept administration that Scotland has experienced since the 1970’s.

So our budget endeavoured to plug the gap left by the nationalists by prioritising roads, education, policing and care for the most vulnerable.

Unfortunately the administration felt it necessary to raise council tax by 3% to try to repair the damage done to council services in previous years. In other words the failures of the nationalist administration are having to be paid for by Borders council tax payers.

With the economy so fragile, to take £1.6 million out of the productive sector of the economy at this stage is highly risky, so this is not ideal from my point of view.

More tangibly, households in the Borders already have the lowest average incomes in Scotland. So we are asking hard-working people across our region – who often are scraping by and struggle to afford the essentials, let along the pleasures of life – to pay for this failure.

I’ve heard it said that the amounts taken in council tax are trivial. This point of view is utterly complacent because council tax is taken at the margins of people’s budgets. It may be a small proportion of total income, but it’s a big slice of whatever is left after the absolute essentials. It could be the Christmas budget for some, the heating or phone bills for others, the marginal difference between debt and modest savings for still more.

Also, as people have less to spend, this is money that will in turn be taken away from small businesses across the Borders  – the lifeblood of our communities. And while the council strives to help the most needy, often the best way to do that is to let people keep more of their own money and decide for themselves how to spend it. We should not raise taxes on Borders people lightly.

So over the next four years we are going to have to think radically about how to deliver the same quality of local services at better value for money for the citizens paying for them.

The good news is that the budget promises much more modest increases in council tax that could, with luck, stay in line with household incomes. The administration has committed itself to a ceiling of 1.5% council tax increase until the next election, so long as nationalists cuts do not exceed 2%. That’s something that is worthy of support.

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Playing with numbers SNP style

Glancing through the Scottish Government’s latest analysis of the impact of Brexit on Scotland (Scotland’s Place in Europe: People, Jobs and Investment) it’s difficult to believe that this has been produced by supposedly impartial civil servants.

The language is highly misleading, the calculations questionable and the assumptions make Mr Fantastic from the Fantastic 4 look as stretchy as me when I’m tying my shoelaces. Luckily it’s so implausible that it’ll do the nationalist cause more harm than good given their track record on these kinds of economic forecasts. Continue reading

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