Derek’s Deckchair Dispositions

Our Finance Minister Derek Mackay  may be new to his job but the boyish looks deceive; he is no rookie. Bred in the rough-and-tumble West Central politics of Renfrewshire Council, he built the SNP Group there into  formidable opponents of Labour;s hegemony. His reward was leading the fist-ever SNP administration there 2007-11. That was followed by election as an MSP, with ministerial posts soon after before taking over the hot potato of Finance from John Swinney’s legendary ‘safe pair of hands’.

So, How Did Our Boy Do?

In his first budget on December 15th, his hands did not fumble. Faced with predictable “no-taxes!” cries from the Tories and “more-taxes!” cries from Labour, he dominated the centre ground with a budget that should appeal to Scottish voters, most of whom are in the middle these days. But alienating both main opposition parties does not exclude either of the minor parties from supporting his budget after a little horse-trading.

Nicola should give him high marks for continuing John’s safe pair of hands. Going beyond ‘steady-as-she-goes’ Derek contrived a number of items that received little attention. Amonng these are:

  • £340m more for the NHS, which is a real £120m increase over inflation
  • £200m in capital to help provide more affordable homes
  • £140m in capital to extend the home insulation programme
  • £100m to speed up the rollout of fast broadband and communications
  • Extending to 100,000 the number of small businesses paying no rates
  • £60m for the police budget which at least keeps pace with inflation

He deserved more praise for these. But since even his opponents agree these are good ideas, the Scottish media ignores harmony to fixate on controversial or tabloidesque gossip as juicier reading. Even leaving tax thresholds alone earned scant coverage.

Does That Mean Our Boy Done Good?

Erm…not quite. As a stratagem to flatfoot the opposition, please his boss and stay popular among SNP MSPs, the answer is ‘yes’—a slicj fiscal elastoplast for the short term that raises little ire. But the UK struggling with a devalued currency on the brink of recession. Add in Scotland trailing England by over 1% in economic growth and that needs decisive action that wasn’t there.

Despite being given tax levers for the first time, scant use was made of them to re-stimulate Scotland’s economy. Indeed, by draining a third  of Scottish Enterprise’s £450m budget (richly though they deserved it), it could be argued he did more harm than good to growth.

Throwing more money at the NHS and schools and even rail passengers are popular with voters. But they do little to increase or distribute wealth. There was, however, one area where smoke and mirrors were deployed extensively: local government. His budget only got mealy-mouthed when it got to his. press release (published verbatim in the Hootsmon) said: “Councils to get £240m funding boost“.

Keeping Councils Quiet

Given council elections due next May, he had to boost the chances of  1,200 SNP candidates hoping to become councillors. After a decade of austerity and five years of real-term cuts of 9%, warm words don’t cut it in the teeth of cold number any more. Let’s look closer at that £240m ‘boost’.

Ever since John Swinney’s 2007 ‘Parity of Esteem’ turned out to be code for central control, the SNP government has treated local colleagues of all parties as subservient. Although Derek was local government minister for three years (2011-14) his main effort was to keep councillors docile before passing them on to the equally comatose  Marco Biagi. Derek is smart enough to know local government underpins party political strength. So May must offer good reasons why the SNP should run schools, refuse, etc. Derek offered|

  • £107m to further fund integration of local NHS with social work
  • £120m direct to head teachers for attainment in deprived areas
  • £100m stepped increases in council tax rates for bands E, F, G & H
  • Assumed £70m from 3% increase in council tax now freeze is lifted

Sounds more like £400m than the £240m he cites. But the money for NHS integration and school heads is ‘ring-fenced’ and can be spent only on those items, Inflation and pay rises alone would require £300m more to provide the same services as this year. That looks more like a £160m shortfall.

Bottom Line

Councils  will be forced to raise council tax by 3% AND levy the increased tax from high-end property owners—and get pelters for it while Derek smiles and claims he raised no taxes taxes.  Meanwhile, councils will have only half the increase they need. For all his warm words and council experience, this leaves Derek’s council colleagues rather in the lurch as they face budget setting this February.

It will take  special loyalty and bravery among would-be SNP councillors who face voters so poorly furnished with fiscal arguments without giving Derek a choice piece of their mind at the very next opportunity..

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Phoenix: Rising Fast…but Then Ashes?

Jet-lagged and shocked by temperature differentials, this may not be cohesive. especially after a 3-month hiatus in writing this blog. A month in the capital of Arizona is a real experience of the American Dream writ large. At 4.3m people in its metropolitan area, it is the largest of all US state capitals in both people and area, at 2,969 sq km. That’s seven times the population of Edinburgh spread over twelve times its area.

And, unlike Edinburgh, Phoenix and its surrounding suburban cities of Tempe, Mesa, Glendale, Scottsdale, etc have virtually no historic centres or convoluted existing street layouts to preserve. Although founded in 1881, it was a small agriculture-based town until after WW2. Powered by the same aerospace and tech boom that stimulated Los Angeles and Silicon Valley, development of air conditioning and the flat desert landscape allowed the booming city to be laid out in a classic grid pattern impeded only by chapparal scrub, saguaro cactus and the need to pipe water in.

Whereas most booming US cities are hemmed in by mountains, sea or agriculture, Phoenix has no such restriction. It laid out numbered N/S avenues to the West and Streets to the East of Central and squared them off with named E/W roads at regular intervals, starting with Baseline in the very South. Even supposedly autonomous cities like Glendale fit into this pattern. All of them are laid out in a generous pattern of two lanes in each direction with protected turning lanes in the median and a forest of traffic lights at each main intersection.

PhoenixMap.png

This grid is fed by the major E/W 8-lane freeway of Interstate 10 and similar N/S 8-lane freeway of Interstate 17, augmented by orbital 8-lane State freeways like 51, 101, and 220. At no point in this 50-mile-by-50-mile metropolis are you more than three miles from a freeway—built ahead of the streets and settlements they serve, not after.

azhiway101

Arizona State Hiway 101 at 59th Avenue Looking West (White lines delineate carpool lanes)

What this allows is an amazingly (and confusingly) regular mixture of tract homes and industrial sites with gas stations and retail malls at major intersections. It also allows a diffuse development that makes LA look dense by comparison. Large tracts of untouched desert still with tall cacti and palo verde trees intersperse settlements. especially near the periphery. Make no mistake: this is a thriving city, averaging 4% growth for the last 40 years and whose Sky Harbor airport is rated the best in the US.

Most of all, this is a car-based society. Not only are streets wide but distances are huge—as are parking lots and premises; Home Depot is typically 400m long and covers an area of over 50,000 sq m. And that’s without the 0.2 sq km parking lot in front. Pedestrians are, needless to say, a rarity. People think little of driving 30 miles to & from work or go to entertainment or even for a meal. There is a downtown that includes the usual office skyscrapers and cultural hubs like Symphony Hall and the Art Museum but it does not bustle with life and would not be recognised as a city centre by many Europeans.

downtown

Financial Office Buildings in Downtown Phoenix. (The Copper/Sand Colour is Typical)

Developments made recently are the sine qua non refinement of tract housing but are over 20 miles distant from downtown and. Here streets are curved, relatively short, child-friendly and dead-ended, with the pricier lots being laid out around a golf course or a lake. Four-bedroom and swimming pool is standard—with a 3-car garage (3rd slot for a golf cart). Though much of the planting is desert flora, Arizonans are profligate with water, tending lawns and decorating such developments with streams, waterfalls and fountains.

This high-income, affluent lifestyle with plenty menial labour around to support it is pretty much an embodiment of the American Dream. This has put Arizona politically in the Republican camp and the local tendency is not to think globally or about vague futures when there are businesses to be run, families to raise and bills—especially medical and school fees—to pay. As a result, with the exception of the latino population, Trump did well here in the recent election and took all 11 of the state’s delegates.

Phoenix may represent the apogee of Western consumer civilisation—at least for those with the money. But social segregation seems entirely related to salary. The golf-course-and-lake suburbs are pure ‘white bread’. By contrast, although over a quarter of the population, they are seen in such areas working in nearby retails shps, country clubs and restaurants—or driving in/out of those areas as gardeners, pool services, cat-sitters, cleaners, etc. Asians are not unusual but a black face is rare, other than around ASU, downtown or the older neighbourhood along 19th Avenue.

These latter are more apparent on public transport, which does exist. Indeed the Metro Valley Light Rail could teach Edinburgh trams a thing or two. Consider the contrast:

metrotram

Comparison of Metro Valley Light Rail with Edinburgh Trams

Generally, Edinbugh does not come out too well. MVLR uses more flexible 3-segment usnits that can be coupled into trains as long as three, which makes for flexible demand response.A typical station is show below.

camelback

Two MVLR Trams pass at Came;back & Central Station

Virtually all the lines run down centre dividers on main streets so the layout follows a zig-zag pattern through the street grid. This can cause trouble with drivers who are still unaware of just how much damage even a glancing blow from a speeding tram can cause.

truckcrash

Result of a Truck trying to Turn in Front of a MVLR Tram in Tempe AZ; No-one was Hurt

Large trucks such as the damaged Ford F350 shown above are hugely popular, despite their gas-guzzling nature. But, with gasoline at barely $2 a US gallon (40p a litre) there is little demand for fuel efficiencyimpressively better thought the MVLR system may be than what we have achieved so far in Scotland, it serves as small a fraction of the city population as Edinburgh Trams do.

Which means over 90% of all business, shopping and commuting is done entirely by car and over large distances. As long as gas hovers near 40p a litre, such a lifestyle is affordable. But what if there’s another ‘oil shock’ as happened in the 1970’s? Or if the entire American population of 330,000,000 want to have sprawling homes and drive everwhere, this utopia for the few would not be sustainable. Finding jobs near their homes—let alone ones that are walkable/bikeable is unrealistic. Property prices would fall, people strung out on debt would default and the main asset on most people’s ledger—their house—would become a liability.

Good thought their trams are, they counld not provide a network dense enough, let alone afford tp build such a huge extension, to sustain the city. Which would shrink and revert to the desert from which it sprang.

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Britain’s Dinosaur Defence

On a recent visit to the Royal Yacht Britannia, I was struck by two ‘birds-eye’ illustrations hanging in the corridor of the state rooms. One shows the Coronation Naval Review at Spithead in 1953 and the other the similar Silver Jubilee event in 1977. In the first, we had just fought the Korean War, had brush fire wars in Kenya, Aden and Cyprus and needed a serious navy to police the broad oceans that connected a still-intact Empire. The 300 ships there were impressive, including seven carriers and our last battleship Vanguard. By the second, the only remaining pink bits were pinpoints and the residual RN small, mustering just 58 ships—and about to be shown as too small for global operations as it was stretched to breaking over the Falklands.

It’s as well that the Lords of the Admiralty saw sense and scrapped any thoughts of a Golden or Diamond review because either would have been pitiful. Today our entire fleet musters just 22 combat ships. Even the normally gung-ho Torygraph was moved at the time of the former to write:

A serving commander in the Royal Navy, recently returned from operations, says the MoD has made it clear no comment is to be made in public on the subject. “It would have been just too embarrassing,” he says. “There aren’t many ships and those we do have are a long way away. It was just too difficult to mount a spectacle worth having.”

And yet we keep hearing from Westminster that “the UK is a global power” or that “the UK punches above its weight”. Well, I have news for Their Lordships: it ain’t true. Now that the UK deploys more Admirals than ships for them to command, even the Indian Navy is bigger, with a carrier-based naval strike capability the RN no longer owns.

So why does the British public continue to pay through the nose for a defence posture that is clearly not fit for purpose? If we have no credible global clout why are we still pretending we do—and charging the public purse as if it were the case? Not only does the Emperor have no clothes but our Exchequer is paying Saville Row prices for them. Let’s compare the defence costs per head of the biggest European countries, taken as a fraction of per capita GDP (purchasing price parity) so we’re talking comparative financial impact.

DefenceSh1

Note that even the fearsome Russian bear charges its citizens less for its thousands of tanks, aircraft and a navy three times the size of ours. And Ukraine, with Russian troops and sundry militants roaming its territory, isn’t bleeding its citizens dry for defence.

What about the medium-small European countries, among which we would count Scotland, were it ever to assert its independence from the Admiral-heavy British state?

DefenceSh2

Even ‘worst offender’ Norway which shares a frontier with Russia and is the first stop on any foray by their Arctic Fleet makes do with 3/4 of the UK’s level of expenditure. And, given that Scotland has similar military exposure to Ireland, you have to wonder how they can hold their head up spending a quarter of our military cost per head. How come Ireland is the one doing long-range maritime patrols (LRMP) out over the Atlantic on our behalf because we can’t afford any LRMP aircraft ourselves?

Britain’s current defence posture is a joke; we claim global clout but can’t even meet our local NATO commitments. We get away with it because more frugal but better-balanced allies—especially the USA—cover for us. Even if our two aircraft carriers get built and the teething troubles of the F-35 jets to fly from them are ironed out, it will take all RN ships still left afloat to protect them properly at sea. “Do you know what we submariners call aircraft carriers?” the Russian Naval Attache is supposed to have asked at a Whitehall cocktail party. “Targets!

Is it rocket science to work out that Scotland’s current £3.8bn contribution to an overpriced, disjointed military stance, skewed by too many Admirals, unusable nuclear submarines, inadequate ships and ludicrous ambition could be halved? Look at the numbers above. Nobody considers The Netherlands undefended but were we to spend on a balanced military as they do, £1.9bn of Scotland’s supposed deficit would disappear.

Sources: SIPRI Military Expenditure Database 2014; International Monetary Fund World Economic Outlook (October-2014)
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Blowing the Inheritance

Edinburgh deserves its status as a World Heritage Site. Its New Town is—along with Bath—the shining example of magnificent Georgian architecture. Its regular streets of coherent facades are interspersed with circles, squares and gardens and gifted with wide views of the city down to the broad Firth and the green hills of Fife beyond.

No wonder it is the second biggest tourist attraction in Britain, after London. With over 1.3m overseas visitors and ten times that in domestic visits, visitor spending pumped £1.2bn into the city economy last year; this figure has been growing at 10% each year and now employs 12% of the city’s workforce—not far off the city’s 15% in financial services. Throw in the various festivals scattered through the year and you have a world-class tourist magnet and a major asset in the Scottish economy.

Shame, then, that Edinburgh City Council (ECC) demonstrate little appreciation for this golden goose but rather demonstrate a perverse resolution to kill it off. Leave aside ECC’s corporate incompetence that led to the tram fiasco that tore up the city centre for a decade. Leave aside the natural incompetence of bureaucrats when it comes to the broader picture and not just securing their jobs. Leave aside myopic self-interest of major corporate bodies like Lothian NHS or the University of Edinburgh who have other priorities than wowing the tourists and the story remains a sorry one.

It was a fortuitous fluke that preserved the Old Town intact when the New was laid out elsewhere in the late 18th © and that riches flowing from the booming industrial revolution and British Empire were crafted by inspired architects into such magnificent townscapes. Even after the Georgian fashion passed, the Victorian heritage of the Caledonian, Scotsman, Carlton and Balmoral hotels, of Jenners, of spectaculat schools like Heriots, the Royal, Fettes or Stewarts Melville, of the leafy villas in Newington, Morningside, Ravelston and Trinity, of  solid ashlar tenements in Bruntsfield or Marchmont, all contributed definitive heritage elements to the city. Even alterations to the Old Town, like the bustling curves of Victoria Street or Cockburn Street with their turrets and  crow-step gables, added new interest to the warren of pends off the Royal Mile. Every building in Chambers Street is magnificent. The draining of the Nor’ Loch and ‘hiding’ Scotland’s main station out of sight was a stroke of Victorian engineering genius.

But, as the pragmatist says: “What have you done for me lately?”

For the story of the last half-century is a truly sorry one, with ECC—and especially its planning department—appearing to lose the World Heritage plot entirely. With partisan single-mindedness towards Edinburgh Corporation Transport buses that would have done Soviet planners proud, ECC shut down a tram network that dwarfed the current single line. They also successfully lobbied to have every suburban train service withdrawn so that Porty or St John’s Road or Clerk Street or Shandwick Place or Leith Street are permanently clogged with herds of double-deckers vying for access to a myriad of stops. Even if the locals know which stop and to have correct change, tourists stay away in droves.

But the real damage started in the 1950’s. The Midlothian County Council building’s intrusion into the Royal Mile, the University’s barbarism at George Square and Potterrow and the carbuncle that is the St James Centre came straight out of Mies van der Rohe’s minimalist playbook. Developers loved it because repetitive prefab units were cheap to make and could be sold off at high prices as ‘modern’.

And so the half-baked attempt to convert Princes Street to a two-level  modernist shopping precinct, started west of Hanover St but pursued lamely, resulted in a free-for-all that makes the view of the castle from Princes Street so much better than the reverse. It matters little that the schemes of Lochend or Pilton or Craigmiller suffered the same misguided ’60’s social engineering that failed and need pulling down; none of that was visible (although whoever dreamed up Dumbiedykes has a lot to answer for). Even though the recent apartment block wastelands of Macdonald Road or Gorgie or Western Harbour will soon fray in a way solid-built tenements never will, most tourists will never find them. But they will find the more visible ‘improvements’—and find them shameful.

Whether it is the ugly modernist jumble on the south side of the Grassmarket that looks across at the historic (much more attractive) jumble on the north or the newly bleak glass-and-concrete canyon of the Cowgate or simply the tatty state of South Bridge, none of this meets creative planning—let alone World Heritage—standards. Whereas some effort was made to make the modern Radisson blend into its Royal Mile context, we lost the horrendous Midlothian building only to find the modernist anachronism that is the G&V Hotel, right across from the 1613 Gladstone’s Land.

Two hundred years ago, impoverished though people were, they managed to produce Ramsay Gardens. Patrick Geddes’ contribution to the cityscape was no pastiche, nor did it pay much homage to the traditional Old Town tenement architecture. But few would argue that it did not improve, if not become the jewel in, the view from the gardens below.

Are the present city fathers so in the packet of developers, so impoverished by their ill-found forays into trams and EARL, so browbeaten by their bureaucrat jobsworths that they cannot rise—as their predecessors did—to improve and enhance their magnificent city, rather than simply do more damage by default than the Luftwaffe ever did?

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Dunkirk Spirit Doesn’t Age Well

During the last decade or so, arguments that Scotland’s future rest within the union have revolved around two key points: 1) economic advantages of being an integral part of a ‘large’ country; 2) the glorious history that nations of the British Isles have forged together down the centuries. This blog addresses the latter.

Scotland’s first difficulty with the Union started in the same century it was forged. Though some attempt was made to instigate a genuine balance within a ‘British’ context, in effect little changed in the English hegemony. Whereas some effort was made to re-badge Scotland as ‘North Britain’, ‘South Britain’ remained stillborn. A hundred years after the union, Nelson admonishes his sailors the “England expects every man to do his duty”.

In truth, whether it was subduing unruly Pathans, Boers, Zulus or Irish, it was to ensure that mills of Lancashire, the mines of Yorkshire, the shipowners of Bristol or the underwriters of the City had ready and profitable markets. That the Scots managed to dominate the tobacco and shipbuilding trade can be attributed to the wilier of us seeing the bandwagon of empire rolling and jumping aboard.

The Scottish Enlightenment of the late 18th © was quickly subsumed into a broader English culture where the public (i.e. private) school was adopted by the more ambitious of Edinburgh and Glasgow, reinforced by received pronunciation indistinguishable from Oxbridge graduates. This found its more garish aping in Morningside/Milngavie accents, whose ambition was conscious that precious few Writers of the Signet or Honourable Company of Edinburgh Archers spoke anything recognisably Scottish, let alone with any burr or accent.

It may be argued that all benefited from this; up to the heyday of empire in Edwardian times, few would argue the point. But such began to be seen as cultural colonialism once two world wars, Suez and the 1960’s put Britain firmly in its place as a second-rate country with a fraction of the political and economic clout it once exercised. People across Scotland started querying why even local BBC news readers all spoke ‘posh’, with an accent that was not theirs.

Such cultural resurgence was understandably delayed by two World Wars. Prior to 1914, Britain saw Europe as a source of war and invasion, while on the wide ocean, the Royal Navy wove the sinews that bound us closer to the other side of the world than the other side of the Channel. Both the Kaiser and Hitler reinforced this and there is no gainsaying that the spirit of plucky Britain defiant in the face of Nazi hegemony on the Continent could indeed be described as ‘Our Finest Hour’.

In that June of 1940, many threads came together: the obsolescent strategy of our French ally, the efficient modernity of the Wehrmacht; the solidarity of empire to the ‘mother country’ in her time of need; cultural cohesion in British society both sides of the border (upper class aplomb backed by middle class loyalty, all underpinned by working class phlegmatic humour in dealing with their lot). The idea of the modest Brit—slow to anger but resolute in adversity—found its most cogent symbol in the rescuing of 1/3rd of a million soldiers from the debacle that was Dunkirk, followed by repelling the until-then-all-conquering Luftwaffe.

Glorious days, all the more so because both were  essential to Britain’s survival and unexpected by most informed observers at the time.  All Britons have a right to be proud of such achievements. But they are no longer relevant, any more than similarly ancient historical facts: that we used to run slave plantations and a slave trade to support them; that we invented concentration camps to tame the Boers; that we started several wars with China so British merchants (including plenty Scots like Jardine Matheson) could continue selling them opium.

The point is: how relevant is any of it to the 21st © and the present needs of  peoples who inhabit these British Isles? Given that empire is now pink specks in distant oceans, that ‘our’ Dominions look to the USA far more than the UK for trade, defence and friendship these days, it is high time that we shelved historical distrust of our nearer neighbours and stopped kidding ourselves we still have a global role to play.

From the mutterings of various government ministers in London, it seems misplaced delusions of grandeur still clutter their thoughts. From the surprisingly large Brexit vote in former industrial areas, deeply-rooted mistrust of Johnny Foreigner in any guise dominates John Bull. That is England’s prerogative. But, claiming our three hundred years of a union demands it continues, irrespective of the clear wishes of one of the partners is not only short-sighted but arrogant. It rides rough-shod over the principle that any partnership must be to the mutual benefit of all partners in the first place.

That England cannot see any of this simply underscores the need for Scotland to seek a path more suited to its own needs than to England’s, to which it has subscribed for entirely too long.

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Chiels That Winna Ding?

In the midst of a Twitter storm this week, I realised that the bulk of the 3,000+ responses to a chart I published were from unionists, almost all of whom appeared to insist that the only debate that could be had over independence for Scotland was for the nats to present cast-iron evidence of the exact fiscal circumstances that would follow upon independence.

While no-one serious about their country’s future should airily ignore sensible projections, this storm was much more than about prudent consideration. Many of the responses insisted that the argument must be couched in crisp numeric terms and that GERS and IFS projections pretty much scuppered any rosy future for an independent Scotland before it was out of the traps.

Now there are plenty of nationalists with passion so fervent that they get heatedly irrational should anyone question their goal. But I contend this is not helpful. The other 55% not yet convinced will not change their mind under pressure of blind fanaticism. What might sway them is a rational discussion of what most neutral observers might agree were facts—or as close as we’re likely to get in the woolly world of economic projections.

Let’s start with this year’s IFS evaluation of the Scottish deficit, shown in their paper of March 2016. The columns are for the years 2014 through to 2021.

IMFprojn

This is an even gloomier picture than the previous take. The main explanation:

“Oil revenues are expected to be negative: -£0.8 billion a year, on average, between 2015-16 and 2019-20, compared to +£0.7 billion a year in last year’s forecasts. The OBR’s forecasts assume an oil price of $35.50.

Clearly such low prices continuing would vaporise any oil revenues, as well as having a knock-on effect in prosperity and jobs in dependent industries. North Sea revenue fell from more than £10.9 billion in 2011-12 to less than £4.8 billion in 2013-14, before dropping to £2.25 billion last year. This was driven by a price for a barrel of Brent Crude dropping from $110 through $82 to $45 in that time.

So, were oil prices to remain in the toilet, revenues from oil would stay negative and Scotland’s budget deficit would require heroic growth from other industries to pull it out of such doldrums as enumerated above. But what if there were some evidence all this was not a foregone conclusion. What if some major financial institution were to project some other scenario. Would that not be as likely a future? Let’s take, say, the World Bank, as weighty a voice as you could wish and one unlikely to be swayed by nats. Or, for that matter, by HM Treasury.

OilPriceProj

Taking this scenario, instead of a £0.7bn annual hit, the Scottish balance would see close to a £3bn boost from oil by next year, rising to £4.4bn by 2020. In that year, even assuming no improvement in the rest of the economy, GERS figures should then show a Scottish deficit for 2020 of around £8.5bn—a full third lower than the current projected figures.

Though this, in itself, does not erase Scotland’s fiscal deficit, it does show that  OBR projections, which drive both IFS analyses and UK government GERS, are not facts after all. They are, at best, educated guesses and, at worst, political bias.

Which is why unionists, gleefully using them to belittle their country, should ca’ canny throwing them about as if they were gospel.

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Not Brexit; Engleave

Three weeks on and the reverberations of June 23rd continue to cloud any clarity of the political future for Britain. The now headless Brexiter movement has slid from media view and left a new government under Theresa May to sort out the mess they caused. It is still not clear how or when EU discussions to leave under their Article 50 will take place.

One thing that seems perfectly clear: a whole range of Westminster politicians from May on down believe:

  1. A democratic decision has been made and cannot be reversed
  2. This decision applies to all parts of Britain
  3. There is no way that any part/nation of the UK can remain in the EU

On the July 17th Marr Show, Labour (at the time) leader hopeful Angela Eagle showed typical bias: London and Liverpool voted to stay, as Scotland did, she said, but this decision was made by the entire UK as a unity. In this, she echoes hard-line Brexiters like Reese-Mogg and Redwood, as well as UKIP. There appears to be a cross-party front that there is no room to maneuver.

While perfectly democratic for an English majority to want a simple, fast and painless dissolution of their ties to Europe, that does not entitle them to ignore the desire of other countries of the United Kingdom to seek a deal best suited to them. Unfortunately, so far, the London establishment, backed up by a loyal media, claims a clean, fast, total exit is best for all. This is simplistic: we are no longer a unitary state, no matter how much easier that might make things.

Consider relevant local arrangements made by the UK in the past. They have sat  comfortably as status quo for some time (some are even seen as giving advantages to both parties):

  1. The Duchy of Normandy once included vast territories of the Angevin Empire. But after the loss of Calais in Elizabethan times, it was reduced to the Channel Islands. These British Crown Dependencies are NOT part of the United Kingdom, but no passport controls are in operation between the UK and the Channel Islands (i.e.free movement). They exercise their own laws (especially on tax), which is generally regarded as beneficial to both sides.
  2. The Isle of Man is not part of the United Kingdom or the European Union, but is a possession of the British Crown and its inhabitants are British citizens. The island came under the feudal lordship of the English Crown in 1399 and revested into the British Crown in 1765, but the island never became part of the United Kingdom. It similarly remains an internally self-governing Crown dependency and no passport controls operate (again, free movement).
  3. The Republic of Ireland was granted full independence in 1922 and joined the EU in 1973 (same time as Britain). But there are no border signposts notifying travelers they are entering a different jurisdiction. Both states are outside the European Union’s Schengen Area but share a Common Travel Area, resulting in an essentially open border (again, free movement).

So what does all this mean for Brexit? For a start, some latitude for adjustment for Northern Ireland and Scotland’s clear desire to continue to have access to the EU’s single market even if they remain part of the United Kingdom. A complete UK Brexit would have to deal with a 300-mile long EU border with Eire within the Common Travel Area. Any clamp down on that border would be hugely expensive, as well as damaging to the Irish economy on both sides of the border.

But a more sensible arrangement could be achieved by the following:

  • Both Northern Ireland and Scotland remain in the EU
  • The EU border with rUK becomes the 100-mile long Scottish border. It should be as open as the present Irish but a lot easier to monitor, if ever required
  • All Irish, Scottish and other British citizens (including Crown Dependencies like Man) accorded equivalent reciprocal rights and entitlements within a Common Travel Area, much as already exists.
  • As with the Channel Islands and Man, defence and foreign relations could be administered by rUK while further devolution leads to a comparable degree of autonomy.
  • An EU “Celtic Bloc” of three countries with 11.8m people (twice the size of the Baltic States combined) would provide a trading critical mass for negotiations with rUK and possible new members of the Nordic Council as horizons broadened.

NordicCouncil

Though further steps would require considerable research into operational detail and diplomatic negotiation how this might work, the devolution of powers to Scotland could make even this semi-independence do Scotland favours, such as:

  • Development of Scotland’s already strong finance sector to persuade London’s financial services players to invest there, rather than move to secondary finance centres like Paris or Frankfurt just to stay within the EU.
  • Adoption of a currency independent of the £UK, adopting the Swiss and Singaporean regional finance centre growth, combined with a pitch for the Jersey/Man/Cayman/etc offshore investment business practiced similarly under the protection of the British Crown.
  • Development of specialist manufacture within the EU. Oil services and related engineering (e.g. high pressure pumps) are already established, to which renewables equipment (especially wave and tidal) and further high quality food and drink would add export income, especially as the new currency became more competitive against the £UKL.
  • Cruise ships are already opening up links between the putative Celtic Bloc and Scandinavia. A common tourism strategy to capitalise on our unique landscapes and wildlife could distinguish this Celtic Bloc from city-based tourism of London and the Continent, making Dublin/Edinburgh a primary Transatlantic and Asian tourist destination, not a side-trip from London.

CelticBloc

It is not clear that Brexit has not already damaged the UK economy and placed England in a awkward fiscal dilemma where the freedom of release from EU compliance and funding is largely squandered in protectionist world. Scotland is no more immune than our English cousins to this chill wind of reality.

The reason all this might be feasible is that Theresa May and her English support will need to negotiate a deal with the EU. But, unlike the English, the Scots appear to have gained considerable popularity among our continental cousins by voting to stay part of the family. If Ms Sturgeon plays her cards right (and her handling of tough questions around this matter on today’s Marr Show suggests that she will), then there is every chance that Scotland can negotiate something along the above lines and even become a trusted interlocutor in Article 50 discussions.

Using precedences already set with corners of the British Isles (outlined above), pushing hard to negotiate a half-way house position for Scotland that would also ease Northern Ireland’s dilemma and calm Irish concerns about a more rigid border, Scotland could benefit from this and actually prosper.

If we Scots just sit on our hands and let serially xenophobic Tories further cow us with immigration scare stories thsat make little sense to us, then we will share in their accelerated fiscal decline and get short budget shrift out of London for doing so. But if we play the go-between, become the understanding broker who can speak to both sides, not only will Scotland get a boost in international trade and profile but our dynamic economy on the EU/rUK boundary will even help revive England’s fortunes for the tough times that now lie ahead for them.

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Why Bait the Bear?

A recent NATO summit in Warsaw agreed to deploy four multi-national battalions (from USA, UK, Germany and Canada) to Estonia, Latvia, Lithuania and Poland. The British are to be in overall charge and the contingent is to consist of a 500-man infantry battalion to Estonia and 150 support troops to Poland. UK Defence Secretary Michael Fallon said

“It aims to deter Russia from any further aggression. Eastern NATO countries feel enormous pressure from Russia doing large exercises on the border, flying over their airspace and so on.”

If a prize were offered for military misjudgement, Fallon would be clear favourite to receive it. One of the consequences of the EU having given Europe a half century of peace—the longest it has ever known—seems to have warped our government’s sense of proportion, not to mention this country’s abilities.

Both Suez and the Falklands War proved that the UK was no longer a real global power. While both could be argued a military victory, Suez was one of the worst blows to British prestige ever suffered and, despite pluck and heroism from the (weak) forces engaged, a few more properly fused Argentinian bombs would have turned the Falklands campaign into a disaster.

Since then, British forces have only ever been asked to fight local brush-fire wars (Sierra Leone; Serbia) or alongside the US’s well documented “shock and awe” juggernaut. Not since 1919 have British troops fought the Russians and that was against a fledgling Red regime with support from the Whites.

Ever since the Cold War and the disintegration of the USSR, there have been rumblings all along Russia’s southern borders. On the back of Russia seizing  Crimea and its key naval base of Sevastopol, disputes regarding the Russian majority in eastern Ukraine erupted into open war that still continues. This, plus Russia’s historic habit of annexing chunks of Eastern Europe when opportunity arose has made both former Soviet republics and former Warsaw Pact allies understandably nervous, especially when a sabre-rattling president like Putin is in office and clearly needs to prove something.

Now Russia has been proved a giant with feet of clay before. Its massive numbers of men and tanks did not prove much worth in 1941 when a far more professional Wehrmacht came close to overwhelming the entire country. Nor in the aftermath of the fall of communism was the apparently powerful Russian Army really the force it appeared, riddled with poor morale, rigid command structure and obsolete weaponry. Dramatic pictures from the First Gulf War showing the hundreds of burning Russian T-72s of Hussein’s Republican Guard underscored this latter.

But the NATO general who imagines four battalions deployed along Lake Peipus and the Byelorussian border have any military significance beyond provocation needs to be sent homeward to think again. For, while the Russians may be a great and important people, they are neither Western, nor are they pliant. Like many other great nations, they are passionate and proud. And, given seventy years of total isolation, followed by thirty with a controlled press, most of the 142,423,773 of them harbour deep suspicions about a West still gloating that “they won” the Cold War.

We seem to still be locked in that Cold War attitude of Russia as the aggressor. Certainly they don’t think like the West. But if we had a folk memory stretching back centuries that included invasion by Mongols and Tartars from one side and Swedes, French and Germans from the other, we’d be rather more paranoid. The dominant Russian objective has long been to secure its frontiers. Its main tactic to do so has been to absorb and/or control weaker near neighbours. Recent aggression in Georgia, Chechnya or Ukraine is all part of this.

But, in an echo of the discredited American ‘domino theory’ that took them into the morass that was Vietnam “because all of South-East Asia could fall to the Commies“, Russian forces massing on the Dneipr does not necessary lead to them massing on the Rhine, or even the Channel. Even Putin remembers the entrenched hostility of Budapest in ’56, Prague in ’67, Solidarity in the eighties and their own Vietnam when they had their nose bloodied at the hands of the Mujahideen in Afghanistan in the ’80s.

Many Russians have a strong memories of the Great Patriotic War when they lost some 8.7m soldiers and 17.9m civilians during the Wehrmacht‘s visit. Add in a stolid constitution born of centuries of surviving in a harsh climate of extremes and a taste for strong rulers (of which Putin is only the most recent example), we have a potent recipe for what was coined in the film Cool Hand Luke as “a failure to communicate”. Massing forces on their frontier just makes them nervous.

Four battalions are a gesture, a brigade-sized force of only 3,000 men. They only make military sense if they were shoring up a credible front line. Pivot of that front line is Poland, which has 120,000 troops and 1,000 tanks on active service. Good though those four NATO units may be, they are spread along a 1,500-mile frontier and represent just a 2% augmentation of the defence north of the Pripyat.

Consider what would happen if Russia were to start a frontier war, as it did in Ukraine. But this time, NATO forces (against everyone’s better judgement) gets involved. Of all countries, Britain is least able to escalate: we have cut our forces to the bone, scattered them globally and neither aircraft carriers nor Trident subs cut much ice in supporting troops locked in inland combat around Pskov.

Especially as that combat could be very one-sided. Since receiving rough handling in Georgia in 2004, Putin has been working diligently to weed out incompetence, train for modern warfare (not just Red Square parades) and boost professionalism. In short, they are no Ruritanian pushover, no Iraqi conscripts in a Kuwaiti desert.

Under Defence Minister Anatoliy Serdyukov, major structural re-organisation began in 2009. Key elements of the reforms included reducing the armed forces to a strength of one million by 2018, organised into five armoured, forty mechanised infantry and nine special forces brigades (roughly 160 active battalions).These are equipped with 15,398 tanks, 31,298 AFVs, 5,972 SPGs and almost 9,000 other artillery pieces. There are also 2.4m trained reserves.

In contrast, today’s British Army strength stands at 87,000, currently organised as 31 infantry and 9 armoured active battalions with support troops. These are equipped with 407 tanks, 5,948 AFVs, 89 SPGs and 180 other artillery pieces. The army reserve stands at 29,000.

Taking nothing away from the high quality, the courage and the professionalism of British troops, deploying an isolated battalion to defend Estonia from an aggressive Russia could be considered military insanity. Let’s assume the rest of the British Army was not over-committed elsewhere and its entire strength could be deployed, supplied and supported behind Lake Peipus, it would still be:

  • outnumbered four to one in infantry
  • outnumbered 38 to one in tanks
  • outnumbered 55 to one in artillery

Given that over 80% of casualties in ground warfare are caused by artillery fire, it would seem that even having the entire British Army defend Estonia against a determined Russian assault should also be considered military insanity.

So, questions that demand answers in this situation are:

  1. “How can deploying a single battalion in Estonia make any sense at all in military terms?”
  2. “Given how outraged we would be if the Russians deployed an equivalent force in Eire, why is this not considered unjustified provocation?”
  3. “If the border brush fire currently burning in Eastern Ukraine leaps all diplomatic firebreaks and starts burning in the Baltics or Byelorussia, given the above stats, is NATO daft enough to start another European war over it?”

This whole affair appears to be yet another example of Britain ‘proving’ it “can sit at the top table” or that it “punches above its weight“. In reality, it shows as much judgement as a child playing with fireworks in a petrol dump.

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Foreignacy

Opinionated though it may be, it’s not often that this blog has the temerity to launch a new word into the already crowded seas of English vocabulary. But the second decade of the 21st century, the world appears to be moving into an new era of politics. After centuries of fixation with internal political wrangling within the nation-state, leading countries across the globe are finding international politics plays as large, if not larger, role in their welfare.

Von Clausewitz was simply citing what every nation-state at the time accepted as self-evident—that “War is simply diplomacy, carried on by other means“. In the aftermath of the World War (Parts I and II) and with the advent of nuclear-tipped standoffs, local attempts to solve differences at bayonet-point like the Franco-Prussian, Third Balkan or Gran Chaco wars have become (thankfully) passé. Certainly, there are skirmishes. But these are mostly in the Third World. As demonstrated in either Iraq War, few can afford the cost, let alone withstand the effect, of ‘Shock and Awe’ being applied by a superpower.

A hundred years ago, wars were usually ignited by commercial interests, wrapped up as imperial ego and executed by jingoistic enthusiasts. This worked because few traveled far and fewer had experience of other cultures. let alone understood their point of view. So the ‘Hun’ and the ‘Bosche’ were limned as barbarians nailing babies to the doors of Belgian churches. Little conscience was attached to mowing them down in droves any more than the Mahdi’s masses at Omdurman.

Thankfully, one of the few benefits of the nuclear age has been a readiness to leave the sabres in the scabbard and, flawed thought they may be, use talking shops like the United Nations and European Union to iron things out. Of all the arguments deployed over the last few months pro- and contra-Brexit, the fact that the second half of the 20th century cost less than 0.01% of lives in war compared to the first half seems largely to have been overlooked.

Because, at its root, wars are based on ignorance—ignorance by the young men who typically fight them about the pain, hardship and cruelty involved and by the civilisations on either side of the divide who must de-personalise the enemy and can only do that if they are seen as barbaric, inferior, insufferable or in some way deserving of defeat. In short, war depends on ignorance about the other side.

When few traveled and fewer spoke other languages, such ignorance was easy to harness and channel into aggression. The English and Scots through most of their history were good examples of this. But by intermixing and the joint project of empire over the last quarter millennium has overcome most of that and channeled much of the rest into high emotions surrounding sports fixtures. We have become, to coin a phrase, foreignate with one another.

But that is less true as regards Britain and Europe. Though we have passed the point of arming another British Expeditionary Force to follow in the footsteps of Henry V, Marlborough, Wellington and the Old Contemptibles, nonetheless, the average Brit’s experience of Europe is Ibiza (if under 30) or Lanzarote (if not). Our British education may make us Literate and even Numerate. But it does little to make us Foreignate. We indulge in little cultural (as opposed to sun-seeking) foreign travel. We are uniformly poor at languages. Only recently has our cuisine moved past greasy spoon cafes serving ” baby’s ‘ead an’ two veg”.

Compare our travelers to the Dutch, most of whom speak English to a degree that embarrasses us. Or to the Swiss, who have made suave foreignacy into an art form through their multilingual culture and reputation for peaceful prosperity that is the envy of the world. The Singaporeans are rapidly developing into an East Asian version and prospering as a result. Given the Brexit vote, it remains to be seen whether the inforeignate Leavers will turn back time to when Pefidious Albion stood aloof or whether saner voices can salvage the open, close working with neighbours (i.e. the EU) that gave us a half century of peace and prosperity so far.

But a lack of foreignacy worse even than Britain’s (and likely to have an even bigger drag on world progress) is the United States. Not only do they practice a culture almost as self-referential as North Korea but their collective ignorance about the rest of the planet means that many still think like von Clausewitz.

A great nation like the USA can call on an immense reserve of well educated—and therefore largely foreignate—people to help run the country. Even when their  narrow two-party democratic machine produced populist rather than capable presidents (Truman, Reagan, Dubya) their staff and the political nomenklatura smooth the way and cushion the effect of simplistic thinking that led to invading Grenada or other throwbacks to gunboat thinking.

But, just as the Brexit vote was swung by inforeignate denizens of Labour’s disintegrating post-industrial heartlands, so inforeignate thinking now dominating post-industrial areas of the States (e.g. Detroit; Cleveland; Pittsburgh) is being fired up by the least foreignate figure to ever come this close to the White House—Donald Trump. Steeped in the self-referential worlds of development and entertainment in the US, this man augers ill for everyone, not just Americans.

His life is too rarified for him to grasp any vision into Joe Public. His entire upbringing and personal experience is so enclosed he exhibits no foreignacy at all. But, worst of all, his ego will not allow him to gather advisers (as opposed to yes-men) the way former presidents have done to compensate for such fundamental shortcomings.

How Trump will crash and burn is not yet clear. But when analysts pick through the resulting wreckage, they will find an abject lack of foreignacy to have been the cause.

 

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This Scuppered Isle

Three days on and the enormity of what happened on June 23rd still has not registered in all its implications either with me or the population at large. The jubilation shown by Brexiteers at counting stations appears to have evaporated overnight. More importantly, the architects of this seismic shift in Britain’s future seemed equally overawed by what they have done. Boris and Gove are boys who laced school dinners with laxative—laying low, hoping their wheeze won’t have serious repercussions but realising only now they hadn’t thought things through.

Apart from a weak pound and markets, ructions at the top of both UK parties and considerable outrage among 16m people (plus a fair few among the other 17m), long-term effects are only now becoming clearer. Within the EU, the northern bloc of ‘reasonable’ countries who should have been our allies are peeved that we  pulled out and left them to deal with what everyone agrees is a dis-functional Europe project. At the same time the southern reprobates realise there will be even less money than they thought to bale them out of their spendthrift ways .

Demanding to leave the EU instead of staying and throwing ourselves into making it better is myopic. Divorce is not the only viable solution to a marriage spat.

And yet, it is not as if Britain can really move to pastures new. Geography—give or take a continental nanometric drift or two—is not changed one whit by political decisions. Even Brexiteers concede that our biggest trading partner should still be there right across the Channel.

But how can it be as now?

By unilaterally throwing our collective toys out of the pram and abdicating any hope of influencing future EU decisions, Britain has just irritated the very people with whom we wish to negotiate. And this much is clear; if we want absolute control of immigration we cannot be part of the single market. And, as if that were not enough, by leaving, we undermine the stability of that bloc such that its economic future may become uncertain. Our best customer may now become poorer and so less able to buy our stuff—even with our now-discounted £.

And who will be doing the negotiating from this side? By siding with Cameron, the bulk of the Cabinet is disqualified. By siding with Corbyn, so is the Shadow Cabinet. The media are talking up Boris as a front-runner and you have to credit him with the nous to play the populist amiable idiot as if he were born to it. But if popular, folksy philosopher is all the qualification needed, Homer Simpson ought to make as good a PM as Boris.

The man has no depth. He has consciously cultivated popularity since he went to Eton. But he is a total weathervane on policy, failing to exhibit detectable backbone of principle within his ample body. As a Prime Minister, he would be a Sarkozy—a toom tabard living on charm, or Tsipras, Syriza’s pliant leader who looks good but is effectively disabled—buried under events beyond his control.

But, if not Boris, things go downhill even steeper. Gove is as credible as a shandy at a whisky-tasting. The other Brexit ‘leaders’ may make cogent arguments but are all non-starters because they come across as prats— Redwood? Fabricant? Rees-Mogg?—their mothers and their backwoods constituents may love them but they are as popular with the English public as a series of farts in a spacesuit. In Scotland, they are alien as Martians.

Whoever it winds up being, the PM’s job is now a poisoned chalice. As the Grauniad said over the weekend: “All that remains is for someone to have the guts to stand up and say that Brexit is unachievable in reality without an enormous amount of pain and destruction, that cannot be borne.” Because this is one doozy of an abyss Britain is now staring into. Consider these factors over the 2+ years it will take for Article 50 to be implemented:

  • Minimum 28 months of market uncertainty when much of UK wealth comes from financial services in both London and Edinburgh
  • Exodus of workers to EU as companies adjust to upcoming border restrictions (Barclays has already announced 1,000 staff moving from London to Paris so they can continue to operate within the EU
  • Huge dislocation of 2m Britons currently resident in EU who will soon need work permits or different health provision or pension arrangements
  • Difficult and public wrangling over terms of trade and co-operation because there was scant love left for British stroppiness within the EU even before they were dropped into this additional hassle.
  • Undermining of NATO, especially if Trump gets anywhere near the White House, with a consequent rise in sabre-rattling from Putin et al.
  • Backlash from the Hartlepools and Halesowens and Huddersfields whose blue-collar votes tipped the decision because they hoped funds would flow to them instead of Brussels when they find factors (see above) result in there being less.
  • Backlash in London and other major cities when the flow of immigrants does not abate with the EU’s ‘free movement of labour’ because most of the UK’s 300,000 immigrants weren’t EU citizens in the first place.
  • Major disruption to the NHS as free movement of labour that has allowed thousands of staff from the EU to be employed becomes blocked
  • Serious disruption in farming, with knock-on to its supply side, as the entire CAP subsidy system disappears
  • Difficulty maintaining the current standard of living because a weaker £ will make the 80% of manufactured goods we import (especially from China) dearer—and even make a holiday in the sun proportionally dearer.
  • Perhaps most telling (given Tory thundering how Brexit would let us take charge of our future) a diminished role in the world because Britain will no longer have backing from 300m+ in the world’s biggest economic bloc.

Even assuming there isn’t an emergency budget declared this summer, all of Osbornes flawed calculations regarding turning the debt around are now out the window. There must be such a budget under whatever new PM emerges by October. It must cope with knock-on effects of Moodies down-rating the UK economy, not least of which will be a consequent rise in interest rates, loading even more of a burden onto interest payments, already at £30bn per annum, not to mention mortgage payments rising and property sagging.

By the New Year (except among Farage, his UKIP hardliners and the usual Tory Little Englander suspects) expect widespread regret at this huge self-inflicted wound in our welfare. And that’s when the wheels will really come off. With the English economy on its worst slide in years, the counsel of caution why Scotland cannot go it alone will weaken. And, as English Labour follows their Scottish brethren into the wilderness, voices against independence will be increasingly stilled and Nicola praised for her foresight in preparing for indyref2.

Most of the unionist arguments deployed in 2014 will then ring hollow amidst an economic downturn that will be austerity on steroids. Oil prices rising back towards former levels would be all the economic confirmation Scots would need to make their escape. With the October 2018-ish deadline for final Brexit looming, a Spring 2018 referendum YES decision could keep Scotland—long more popular abroad than our stand-offish English cousins—in the EU.

And, if that happened, the likelihood of a similarly discomfited Northern Ireland with its growing proportion of Catholic voters seizing similar opportunity moves from the fantastic to the possible. Joining with Eire they would stay in the EU, the Troubles would at last be over and the wrongs of 1922 righted a century late.

All of which might give tresolutely narrow-minded, living-in-the-past, almost-all-English Brexit politicians left looking at what they had wrought some food for thought—not least contemplating their sputtering, isolated English economy, surrounded by annoying affluent resilience of a revitalised EU.

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