Sunday, April 27, 2008

It's not the end of the world, Gordon. Or is it?

Come on Gordon, lighten up. It isn’t the end of the world. So, the Tories are 18% ahead in the latest YouGov poll; there is a summer of industrial discontent looming; you have backbench revolts over tax bands and detention without trial; the economy is heading for recession; inflation has returned with a vengance; people are about to lose their homes; oil has reached nearly $120 dollars a barrel; and the North Sea oil lifeline is about to be cut off by the Grangemouth dispute... Ok, perhaps it is the end of the world after all.

But look on the bright side - at least there aren’t any challengers waiting in the wings. So few serious rivals are there for the top Labour job right now that even the Mogadon Man redux, the Chancellor, Alistair Darling, is being talked about as a possible successor if Gordon is taken off to the funny farm - though, far be it for me to recycle Blairite smears about Gordon Brown’s alleged “psychological flaws”.

That description of Brown’s mental state was famously fed to the Observer columnist, Andrew Rawnsely, for his book “Servants of the People” by someone Rawnsley described as having “an extremely good claim to know the mind of the prime minister”. Many believed Rawnsley had direct access to the frontal lobes of Tony Blair himself. And ever since there has been no shortage of Labour politicians prepared privately to question the location of Gordon’s marbles.

Right now there is a mini boom in rumours about the prime minister’s psychological condition. He’s variously said to have taken a wobbly after the election-that-never-was, plunged into depression over Christmas, and brought in the New Year by kicking chairs across the room. A Labour MP told the London Evening Standard recently that Brown has “recently got through three mobile phones in one week by hurling them against the wall in anger”. Phone hurling may of course be a perfectly natural response to a series of events which has conspired to undermine Brown’s government.

When things go wrong in politics, they have a tendency to all go wrong together, but rarely on this scale. This time last year Gordon Brown was being hailed as finest Chancellor of the Exchequer in over a hundred years. A financial genius, who had managed to deliver an unprecedented run of eleven years of continuous growth, and had negotiated the rapids of the 2000 stock-market crash, globalisation and the collapse of British manufacturing. Super Brown had restored full employment, introduced the national minimum wage, saved Africa and redistributed wealth to the working poor of Britain. This man could do no wrong.

Now, twelve months on he is being accused of economic mismanagement on an epic scale. Brown is blamed for keeping interest rates artificially low, for promoting an unsustainable boom in house prices; for allowing hedge-fund managers pay less tax than their cleaners; for allowing banks to lend as if there was no tomorrow to people with no future. He has broken his own fiscal rules by spending his way into a downturn and standing idly by while most of Britain’s more productive assets were sold off to foreigners. It came as a shock to many people to learn that the British Airports Authority - of Terminal 5 is now owned by a Spanish company that doesn’t really care what the government or the British public thinks.

Brown’s progress from hero to zero has mirrored the astonishing turnaround in the state of the British economy. Reading the know-it-all financial pundits today you would scarcely believe that most of them were saying only a few months ago that this was the most stable and positive economic environment Britain had ever experienced. Economic commentators seriously believed that house prices would rise forever; that you could replace manufacturing with ‘financial services’; that inflation had been conquered and that full employment was now the norm. Then Northern Rock happened.

It’s hardly surprising then that Gordon Brown is throwing phones around. It is almost as if Tony Blair had waited just long enough to see out the good times before he finally tossed the keys to Gordon with a knowing smirk. Brown thought he was living the new economic paradigm until, like Life on Mars, he discovere that he has been returned to the 1970s. The eruption of trades union militancy is the most remarkable echo of that decade. Last week English teachers went on strike, Grangemouth was shut down, 10,000 Scottish civil servants were joined by coast guards in a 24 hour walk out. Millions of local authorities workers, health workers and civil servants are to be balloted on strike action in the coming weeks.

This change in the climate of UK industrial relations has happened almost over night. Only last December, the Bank of England’s labour market expert, Professor David Blanchflower, said “wage pressure int eh UK is benign and likely to remain so” because “immigration and fear of unemployment” had reduced the bargaining position of British workers. It was a cynical and nasty banker’s view - and it seriously underestimated the determination of workers to defend their living standards.

Now, apparently from nowhere, militant trades unions leaders like Mark Serwotka of the public service union PCS are back on the TV screens and his members are out on the streets. And it’s not hard to understand why. In the last year the cost of food has risen by 15% ; energy bills have risen by a quarter; petrol is at 110p a litre. The official CPI inflation figure of 2.5% has been utterly discredited.

Brown is suddenly standing in roughly the position of the Labour Prime Minister Jim Callaghan in 1978, before the ‘Winter of Discontent’. Callaghan also faced trouble from the SNP, who helped finally to bring him down in 1979. All we need now is for Brown to say “crisis what crisis” and the picture would be complete.

But Gordon Brown isn’t the avuncular and bucolic “Farmer” Jim Callaghan. He is altogether more brittle and - in a political sense at least - neurotic in his relentless micromanagement and attention to detail. He is also very Scottish, which doesn’t help him bond with the majority population of the UK. The Prime Minister actually had a relatively good week at question time in the Commons, but he was kicked around the comment pieces anyway.

Brown has been forced to back down over 10 tax, and he faces defeat over the legislation on 42 day detention. His embryology bill is under assault from Catholic ministers. After eight months of dither and u-turns, MPs are no longer afraid of him, and nor are the trades unions or the bankers, who have been allowed to plunder tax-payer’s money without penalty. Brown has alienated the Left of the party, and emboldened the Blairite old guard. It may not be the end of the world; but it is the end for Gordon Brown.

Thursday, April 24, 2008

Scotland will become independent by stealth

So what happens if there is a referendum and Scotland says yes? This question has been hanging over Scottish politics for the last year, but no one has seriously addressed it yet in any practical sense. How exactly do you become an independent country these days? There’s no text book for this kind of thing, and the last time a country left the UK was Ireland eighty years ago.

The independence question has gone unasked because until recently no one seriously thought it was ever going to happen. Even the SNP, which is this weekend celebrating its first year in office, hasn’t been spending a lot of time worrying about the process of disengagement from the UK, even though in our poll last week suggested a majority of Scots may now favour
it. They’ve got enough on their hands running their departments. There is a draft bill for a referendum on independence, but no majority in parliament to pass it.

However, events south of the border could perhaps provide a catalyst for independence. If a Conservative government takes over in Westminster by 2010, the stakes would certainly be raised. David Cameron would not want to be the prime minister who presided over the break up of Britain, but giving Scotland full political and economic autonomy, within the UK, might be the least worst option.

The Conservatives only have one seat in Scotland, so they haven’t a lot to lose politically. The presence of a lot of Scottish Labour MPs in Westminster isn’t going to endear the Conservative government to the Scottish connection. Indeed, by removing Scottish MPs from Westminster altogether, the Conservatives could expect to be in power more or less indefinitely.

After the next general election, English nationalist opinion will likely be up in arms about the Barnett Formula and the West Lothian Question. The Daily Telegraph repeats as fact the claim that Scotland is subsidised by English taxes and there is a growing clamour for “English votes for English laws”. As rows intensify between Holyrood and Westminster England may rapidly tire of trying to fix the union. You can imagine editorials in the Times and Telegraph saying it’s time for the Scots to decide whether they want to be in or out.

Moreover, in 2010 referendums may be happening all over the shop. The Tories are committed to holding a referendum on the Lisbon Treaty on European integration. There is also a referendum scheduled on Northern Ireland’s relations with the UK, and Wales will almost certainly be holding an election on extending the powers of Cardiff.. In these circumstances it might start to look rather odd excluding Scotland from this orgy of constitutional consultation.

But to return to the original question: if Scotland voted for independence, what would it actually mean? How would it happen? Well, there would have to be a bill passed in Westminster for a start, since it has authority over the constitution. I can’t see the Tories refusing to pass this legislation after being the ones who endorsed the referendum. A date would have to be set for Scottish MPs to withdraw from Westminster - though some might argue that a few should remain perhaps in a reformed upper chamber to address common issues.

Indeed, almost as soon as Scotland and England separated, they would almost immediately start coming together again to co-operate over matters like terrorism, contagion control, organised crime, defence, global warming... Cross border agencies would have to be set up even as the UK civil administration was being deconstructed. It would be in England's interest for the transition to be seamless, to avoid a stock market crash or a collapse of English prestige abroad. Independence is a two-way street.

Back in Scotland, things would go on much as before. The Scottish Parliament would continue to legislate on devolved areas,acquiring powers over taxation, broadcasting, drugs, welfare etc. Institutions like the NHS are already devolved. Indeed, during the process we might discover that the Scottish and English systems have already diverged so much - over trust hospitals and the like - that they are already functionally separate. Education and the law also.

The economic priority would be to establish a Scottish revenue and treasury, so that Scotland could raise its own taxes, create its own national debt and start issuing its own treasury bonds. The bureaucratic apparatus of the Revenue could probably be ‘nationalised’ more or less intact. The treasury would be more problematic because the SNP intend to retain the pound as Scotland’s currency, at least for the time being.

Much has been made of the fact that this would leave the Bank of England in charge of Scottish interest rates, but this might be no bad thing. It would create a ‘level playing field’ for business north and south of the border, and could ensure that the Scottish currency remained stable through the process of political independence. However, there would have to be a division of the existing national debt and complex negotiations about common assets and liabilities in bodies ranging from Network Rail to Northern Rock; from the armed forces to the National Trust.

The hardest nut would be oil revenues. Scotland will demand 95% of them, on the grounds that the oil fields are in Scottish waters. Westminster will dispute this and the negotiations would probably take years to complete. However, since oil is a declining resource, and given that England has bet the future on nuclear power, the negotiations might be easier than many believe. Similarly, the MoD might decide that it is safer to move Trident to a new site in England rather than argue for its retention in a country that didn’t want nuclear weapons.

The Queen would remain head of state and presumably head of the armed forces, though the deployment of the Scottish regiments - restored under the SNP - would be a matter for Holyrood. . There would no border posts. The SNP envisage free movement across the borders as is the case in Ireland between the Republic and Ulster.

Some have argued that Brussels would not look kindly on an independent Scotland; that countries such as France, worried about regional separatist movements, might block the (re)entry of an independent Scotland. This is possible, but unlikely. It would be absurd for the EU to be recognise the right of the people of Kosovo to self-determination and not recognise the right of Scots. I suspect Brussels would welcome Scotland with open arms. It might even engineer early membership of the euro for Scotland as a way of humiliating an increasingly eurosceptic Tory England.

Social and family ties would remain and there would be no reason for any flight of business because the economic infrastructure would be unchanged and SNP administration would cut corporation tax. Seen this way, independence might not be the apocalyptic event unionists fear, but a rather boring bureaucratic exercise in institutional disentanglement.

We might wake up and find that and independent Scotland looks pretty much as it does now. As to whether Scotland would prosper after leaving the UK, well, that’s another question entirely

Monday, April 21, 2008

Can Salmond make Westminster dance a Scottish jig?

Is there no end to this man’s vaulting ambition, his audacity, his arrogance? Not content with running the Scottish parliament, Alex Salmond now wants to run Westminster too. He told the SNP conference that with twenty seats at the next general election he could hold the balance of power in the House of Commons.

We will “make Westminster dance to a Scottish jig” he said, in what is possibly the most provocative remark made by the SNP leader since he became First Minister. It was rhetoric guaranteed to get the London media in a lather about Scottish truculence. Many Conservative MPs, and Labour ones too, think the Scots already have far too much influence in Westminster, and want Scottish MPs to lose the right to vote on English bills. So they may dance, but I suspect Westminster might want to change the tune.

Nevertheless, Salmond’s 2010 election scenario works like this: Gordon Brown’s popularity continues to plunge right up to the UK general election. The Tories’ advance under David Cameron is limited by his being a party, essentially, of the South of England. The Liberal Democrats, under the untried Nick Clegg fail to make a significant breakthrough. The result is that the Westminster parliament is hung, with no party having an absolute majority - something that hasn’t happened in British politics since the 1970s.

It’s impossible to predict the result of the next UK general election, but for the sake of argument, let’s say that Labour returns with 280 MPs, down 76; the Tories return with 260, up 62; and the Liberal Democrats find themselves with 70 seats, up 8. The SNP, if Salmond delivers, will have 20 seats, up 14, and the other small parties, like Plaid Cymru and Sinn Fein, make up the remainder. The SNP, and the minority parties, could have a strength greater than the balance between the Tories and Labour. Would this allow the SNP to force Westminster to dance to their jig? Not on this arithmetic. It seems unlikely that, even with the other small parties, the SNP would be able to outweigh the combined strength of the Liberal Democrats plus one of the large parties

Alex Salmond has ruled out entering any formal coalition with the either the Tories or Labour. Nevertheless, the SNP could have a considerable influence. Were the nationalists to work in concert with the Liberal Democrats they could form an important bloc of 100 seats. Whatever, it seems highly likely that Labour will have to form a coalition with the Liberal Democrats, or try to run a minority administration. In other words, Westminster politics will become like Holyrood politics; a business of tactical alliances and co-operative politics. Now, the SNP has turned out to be a pretty effective force in a parliament of minorities, and Salmond is hoping that they might be able to translate their Holyrood skills to Westminster.

Salmond’s own ambition is to replicate the success of the Bloc Quebecois, the nationalist grouping in the Canadian federal parliament in Ottawa. It means, in effect, detaching the SNP in Westminster from the SNP in Holyrood. In 1990, the Parti Quebecois formally changed its name and adopted a markedly different political programme for federal elections. Instead of simply campaigning for independence, the Bloc Quebecois promised to fight for the interest of Quebec as a whole in the Ottawa legislature. This turned out to be a pretty successful pitch. (Though it has to be remembered that Canada has a proper federal system, with a division of powers, and a different political dynamic from our system of asymmetrical devolution). In the 1990s, the BQ entered tactical alliances, mainly with the Conservatives, which influenced the shape of Canadian politics. In a practical sense, this is already happening in the Scottish Parliament, where the SNP has remained in government thanks to deals done with the Scottish Conservatives.

In a Westminster context, there would be every reason for the “Bloc Ecossais” to work closely with Liberal Democrat MPs and the minor parties in pursuing regional interests. If this delivered real benefits for Scotland, it might enhance the SNP’s electoral position in time for the Holyrood elections in 2011. It might also persuade the Liberal Democrats to look more favourably on the idea of a referendum on the constitution. Using the influence of the “Bloc Ecossais” might also lure the UK Conservatives down the road of constitutional change, if they think that this might be a way of destabilising a minority Labour administration. However, this way lies danger.

It is worth recalling that the downfall of the Labour government of James Callaghan in 1979 was brought about by the 11 SNP MPs withdrawing their support. They were incensed at the outcome of the 1979 devolution referendum which delivered a “yes” vote but not by enough votes to meet the 40% rule. Jim Callaghan called the SNP MPs “turkeys voting for an early Christmas”, which turned out to be pretty accurate since the SNP lost 9 of its seats in the ‘79 election as the Conservative government of Margaret Thatcher took over in Westminster. Labour have never forgiven the nationalists for being the midwives to Thatcherism.

Could the “Bloc Ecossias” strategy damage the SNP in Scotland once again by making them look like Tartan Tories? The SNP certainly seems inordinately comfortable these days about doing business with Conservatives. It was noticeable that Alex Salmond’s speech to conference yesterday stressed Tory-lite policies like abolishing business rates, cutting bridge tolls, freezing council tax, increasing police on the beat. The day before, Nicola Sturgeon, the deputy leader of the SNP, had been selling the SNP government on its social democratic achievements, like prescription charges, council housing, ending private sector involvement in the NHS. It might be that Alex Salmond is already seeking to locate the SNP, tactically, in a position somewhere to the right of Labour with a view to increasing his bargaining power in a hung Westminster parliament. This is similar to the tactics used by the UK Liberal Democrats

But is it all too clever by half? Well, it is certainly risky, if history is any guide. Britain is still a unitary state, not a federation. If the SNP in Westminster appeared to be responsible for once again bringing down a UK Labour government, and inflicting a new Conservative era on Scotland, this might not do them much good in Holyrood. There is also the small matter of winning 20 seats in Westminster. In the 2005 UK general election, the SNP only won 6 seats, a dismal third behind the Liberal Democrats. Mind you, we scoffed at Salmond when he said he would win 20 seats in the Holyrood elections last may - and that is exactly what he did.

Tuesday, April 15, 2008

Falling house prices are a good thing.

How often must I say it? Falling house prices are a good thing, not a bad thing. It is property madness that got us into this financial mess in the first place, and the credit crisis will not be resolved, will not begin to be resolved, until house prices start to become more rational. That means house prices must come down.

Average UK houses prices of over eight times average earnings are unsustainable, morally or financially. Most homeowners, who are sitting on large paper gains, know and accept this - many have the decency to be embarrassed about it. The government knows it too, deep down, but it can’t face up to the political reality of what it means. Ministers prattle about the need for “affordable housing” and then introduce more measures designed to keep prices from falling, ie becoming affordable.

It was last week’s announcement by the Halifax that UK house prices had fallen by 2.5% in March that led to the latest housing panic. The editorials cried out for dramatic cuts in interest rates “to prevent a housing melt-down”. The Prime Minister insisted, like some real estate Canute, that the fall was “containable”. The Chancellor, Alistair Darling, then threw a token £1500 at first time buyers (which sounded suspiciously like the SNP’s £2,000 bung-that-never-was which Labour criticised) and set up a mortgage review under the former boss of HBOS.

Brown then leant on the governor of the Bank of England to cut interest rates by announcing, falsely that:"Because we've got low inflation we can cut interest rates.". Mervyn King dutifully obliged, cutting base rates to 5% in what was described as a “desperate bid to halt the slide” - even though the slide has hardly started and the cut will have no impact on mortgage rates which continue to go up. Brilliant! When central bankers start setting interest rates to placate politicians you know that we really are doomed. It was low interest rates that inflated the bousing bubble, so let’s have another dose of it! One last puff of air in the three trillion pound balloon.

To repeat: a housing ‘collapse’ is necessary and unavoidable if the economy is to be rebuilt and restored to anything like equilibrium. You cannot have a stable financial system while property prices are so high that people on average earnings and higher cannot afford to enter the market. This forces working families to take out loans they cannot afford, which leads to default, which leads to the collapse of bonds, which leads to Northern Rock. The governor of the Bank of England, Mervyn King, should know this better than anyone since he had to deal with the collapse of Britain’s fifth largest bank. Now the Council of Mortgage Lenders is demanding yet more cash from the government to deal with the “mortgage famine” they have created by their own irresponsible lending.

The Bank of England is not supposed to look after the welfare of banks, that is supposed to be down to the Financial Services Authority. The Bank of England has one simple task: combatting inflation by keeping the Consumer Prices Index below 2%. So why is it cutting interest rates when the Index is 2.5% and rising fast? Real inflation, as anyone who lives in a house, drives a car, or goes to the shops knows, is well over 4%, and there is a lot more inflation in the pipeline. If the Bank were doing its job, interest rates should be static or even being raised. But it is at moments like this that you realise that the country is being governed by fools, by people who behave in a contradictory and irrational manner.

Forget inflation, house prices have been the prime focus of government economic policy for the last decade. Labour won two elections by betting on house prices. Property values nearly doubled in time for the 2001 general election; and nearly doubled again for the 2005 general election. Middle class home owners saw their principle asset rise in value by around £100,000. Not surprising then that they were minded to vote Labour.

The only problem was that this was utter and complete madness; the most reckless exercise in economic mismanagement in modern history. The housing bubble and the consumer boom based on it, was a deliberate act of policy, as the former Bank governor, Eddie George admitted to a commons committee in March last year. He knew it couldn’t last forever but suggested, as the economist John Maynard Keynes said: “in the long run we re all dead”.

Well, not so Mr Keynes. In the long run we may be dead, but our children are very much alive and having to cope with the mess left by their reckless parents. I already feel a deep sense guilt about what my generation has bequeathed: we have damaged the climate, debased politics, and left young people with the choice of unsustainable debt or effective homelessness.

The Dad’s Army of bank managers who made our parents’ sweat about how they would pay their mortgages - pegged at 2 1/2% of earnings with a 10% deposit - did so because they understood the evil of debt. How it destroys families and lives. Our modern bank managers are pushers luring vulnerable people into a fatal addiction through sophisticated devices like credit cards, 125% mortgages, unsecured loans. I still get junk mail every day trying to get me to ‘consolidate’ my debts, ie borrow more.. These people have lost any sense of social responsibility.

But they created an economy in our own image. Our greedy and grasping materialism is ultimately what allowed the financial services sector take over and destroy the stable society of low house prices, secure pensions, social welfare and public housing that the post-war generation built. In came apart in the 1980s,with council house sales - the biggest bribe in modern history and the moment our collective obsession with ‘property’ began. Now, after a tripling of house prices Britain is the most indebted country in the developed world.

The property market has made a fool of anyone who has tried to run a business. Why slave away for years to build a firm when just by sitting in a house in London, or even parts of Edinburgh, you could turn into a millionaire? . Property madness has made fools of anyone who has ever saved, responsibly, for their old age. Why bother, when all the tax advantages go to houses which are free of tax. The government encouraged us to pour more an more money we didn't have into houses because they stupidly believed that high house prices equalled prosperity.

Prime Minister Brown likes to predent that the credit crunch is something that begins and ends in the USA. It isn’t and it won’t. House prices have risen far higher here relative to earnings than they ever did in America and have a lot further to fall - 30% according to the International Monetary Fund. The only compensation is that it this is likely to destroy Gordon Brown’s place in history.

Monday, April 14, 2008

Why is Gordon Brown hastening the break up of Britain?

Things fall apart; the centre does not hold. Last summer most of us in the McChattering classes thought that, once ‘capability’ Gordon Brown entered Number Ten, many Scots would start to lose their infatuation with nationalism and revert to their traditional allegiance to Labour. Hasn’t happened. Indeed, the moral and political disintegration of Gordon Brown’s leadership, which this column examined last week, may now be one of he factors that hastens the disintegration of the UK.

It’s just that no one ever thought it could possibly be as bad as this. Fights breaking out in cabinet; ministers jostling for the succession; a paralysed prime minister unable to make decisions; an unprecedented collapse in the UK government’s poll ratings. And all this at the very moment when nationalists have entered government in all three devolved legislatures. There are times when history seems to be pursuing a logic of its own. In many ways, nationalism is an anachronism in this global financial village, and yet the Scots appear to be turning to it as they never did in the days when Scotland had its own autonomous industrial economy. Recent polls, such as the TNS System Three in yesterday’s Sunday Herald have shown a steady increase in support for independence over the past year.

Of course, the performance of the minority SNP administration in Holyrood has had a lot to do with this. Yet, when you think on it, the remarkable thing is that the nationalists are still in government at all, one year on, with only 47 MSPs out of 129. Alex Salmond would never have got the keys to Bute House had the unionist parties got their act together last May. Once over the threshold, there was no stopping him. The Scottish voters have been given a masterclass in radical nationalist populism - cutting prescription charges, saving accident and emergency units, abolishing student loans, axing bridge tolls.etc.

The real surprise is that Gordon Brown, for all his intimate knowledge of Scottish politics, has had no answers to this, apart from a risible campaign to promote Brutishness. Perhaps we should have forecast that his protégé, Wendy Alexander, would be further disaster for Labour in Scotland - though I certainly didn’t. She seemed to represent the way forward for Scottish Labour: female, intelligent and open minded about constitutional reform. But she has emerged as an incompetent opportunist who claims to be a “socialist” while soliciting illegal loans from property developers; who mounts campaigns against cuts in services even as her mentor, Gordon Brown, cuts the funding to pay for them.

To complete the picture, Gordon has installed in the Scottish Office a clutch of ministers who seem determine pursue a petty-minded and punitive campaign against Scots for the crime of voting SNP. The threats to cut off council tax benefits and to overrule the Scottish Parliament’s power to introduce a local income tax were as offensive as they were politically inept. This allows the nationalists to paint Labour as neo-colonial overlords and defenders of the unpopular council tax - and may also give Salmond an excuse for not introducing his own dubious alternative while blaming Westminster.

The whisky tax in the budget was so unpopular even Wendy Alexander’s husband, the economist, Professor Brian Ashcroft, condemned it. Labour’s Scottish ministerial team declared their intention to take powers back from the Scottish Parliament, even as Wendy Alexander was promising to extend them. Westminster has blocked a ban on air-weapons and attacked the Scottish government for rejecting nuclear power and opposing Trident. Then there was al Megrahi, the oath of allegiance to the Queen, the £40 million elections botch just goes on and on.

Brown must see how damaging this all is, yet he has done nothing to mitigate the emerging disaster.Perhaps his attention is elsewhere. The abolition of the 10p tax band was not intended to hit Scotland, but it will because low pay is so prevalent here. It also offends against the moral sentiments of Scots who don’t see why non doms and hedge fund managers deserve to pay less tax than the working poor.

With political incompetence on this scale it’s not surprising that Alex Salmond has had a good year. However, it has long been the conventional wisdom - in this column as elsewhere - that despite the high approval ratings for the SNP minority government, the Scots were essentially constitutional opportunists, who might flirt with nationalism, but would always in the end vote to remain in the UK. But even this is now brought into question.

Yesterday’s TNS System Three poll in the Sunday Herald, indicating a slim majority in favour of negotiated independence on the SNP’s terms - 41% for to 40% against - cannot be ignored. Only last August, TNS was registering a 15% lead for staying in the union. A Scottish Opinion poll last week also showed independence running neck and neck with the union - 41% for ; 43% against. It’s too early to say that Scots are now committed to leaving the UK, but something is certainly stirring in the undergrowth of Scottish public opinion. We may now have to start thinking about independence as a realistic option for Scotland.

Yet again, this seems counterintuitive because the present financial climate doesn’t look at all propitious for the cause of independence. It’s a cruel world out there - look at what’s happening in Iceland, where a small independent country has had to increase interest rates to 15% to fight of international financial predators. The Irish tiger is looking pretty sick too. In the past, at times of national emergency, the Union has generally been strengthened by a collective sense that we are ‘in this together’.

That may still hold true. The impact of the financial turbulence has yet to fully hit home in Scotland, and when it does Scots might again seek security in the Union. Then again they might not. After having had a taste of autonomy over the last year, I don’t see much enthusiasm for returning to the old dependency culture. There are now so many examples of highly successful small countries in and out of the EU from Norway to Slovakia, that going it alone no longer means being alone.

Moreover, the rise of the London city state and the fall of the welfare state consensus that united these islands in the half century after the War, has eroded the ties that used to bind the UK together. London is now a leading hub of the international plutocracy and barely conscious of the existence of the UK hinterland, whether in England or Scotland. As the economy slides into recession, Scots will be watching very closely to see who wins and who loses. But right now, the biggest loser is Gordon Brown.

The McChattering Classes is me!

At last it can be revealed: the name of the evil nationalist genius who leads the “McChattering classes” as demonised by the Labour minister David Cairns. For, dear reader, I can reveal that the McChatterer is...myself.

Yes, I was outed by Mr Cairns during exchanges last week in the House of Commons. When asked whom he had been referring to when he came up with the phrase “The McChattering classes” to describe people obsessed by debate about more powers for Holyrood, Mr Cairns said.

2/4/08 “Actually, I had in mind the people who write opinion columns in the Sunday Herald.... In fact, the newspapers could save money on those who write those columns. They could send an office boy around to St. Andrews house to collect press releases rather than have Ian McWhirter write them.”

Ooooh! Scratch your eyes out and use them for earings, ducky!

Now, normally, this column is devoted to spoof pieces and satirical commentary, but I can assure you that this is genuine - look it up - even though the Hansard scribes spelled my name wrongly. Being mentioned in parliament is a great honour, of course, though somehow I don’t think my name is ever going to appear in any Labour honours list. Well, I couldn’t afford the bribe.

But what a boost to the ego! Being libelled by ministers in Hansard. As you know we columnists are driven by vanity and this is clearly my biggest puff since, well, since a cabal of Labour Lords led by Lord Ffoulks and Lord Maxton lobbied the Director General of the BBC, Mark Thompson, to get me sacked from presenting BBC programmes in 2005. ( I still have the letters).

But look, I might as well come clean and admit that I am indeed a one-man conspiracy who has turned Scotland against its rightful party of government - Labour. Had it not been for my fixing the ballot papers, the SNP would never have won the May election. Labour’s dismal performance in office had nothing to do with it.

My evil work continues, hypnotising the Scots with occult constitutional theories. I have Wendy Alexander under my spell too, which is why she is McChattering about more powers for Holyrood. I personally brainwashed Scottish voters into telling today's TNS System Three poll that they supported independence.

Without the McChatterer-in-chief none of this would have been possible. It’s all about me, me, me - you understand! The fact that I’m not actually a nationalist and that the only political party I was ever a member of was Labour has absolutely nothing to do with it. Now - must dash to St Andrews House to see if my next SNP press release is ready.

Scottish independence is inevitable - deal with it

This System Three poll, the first since the election to show a slim majority for independence is a wake up call for Labour. But in truth the alarm has been ringing for over a year now, had they only ears to hear it. Scots voters clearly like Alex Salmond’s assertive government, and they are now minded to listen, perhaps, to the SNP’s call for a sovereign Scotland.

This question, put by System Three, is the simple yes/no that the Scottish government proposed in the white paper that launched the national conversation. No multiple choices here; no second preferences allowing independence by the back door. Wendy Alexander accused Alex Salmond of seeking a multi-option referendum because he was afraid of putting the hard question. Not any more he isn’t.

This is only one poll, of course, and other polls conducted in the past year suggest that most Scots do not want formal separation. I am not entirely sure myself what independence actually means in this integrated world of credit crunches and common currencies. The SNP propose Scotland remaining within the European Union, retaining the Queen as head of state, and keeping the pound sterling, at least for the time being. Independence with the Bank of England and Brussels still calling the shots.

But perhaps it is this very vagueness about the meaning of independence that is the SNP’s strength. To paraphrase Herbert Morrison, independence is now whatever Alex Salmond does. The danger for Labour is that Scots may be getting the message that independence is not a big bang event, after which border posts would be erected at Gretna and English people ordered to pack their bags. It could be a process of incremental change leading to a quasi federal destination where Scotland is functionally independent but acts in concert with the UK on common issues like climate change, financial regulation, employment law etc.. Not so scary.

However, there is one way Labour might be able to halt this constitutional drift. It would mean calling Alex Salmond’s bluff and holding an early referendum on the future of the Union. Force the SNP to define independence, and force the Scottish voters to choose. Well Gordon, do you feel lucky?

Sunday, April 06, 2008

Red Wendy - Don't Believe The Hype.

Fight the cuts with Labour! Kick out the Tartan Tories! Save nursery places, and services for the elderly and children with disabilities! Andy Kerr, the former Labour health minister, told the Scottish Labour conference that the SNP are the new “Thatcherites” turning the clock back to the 1980's. Wendy Alexander described herself as a "socialist" dedicated to "the redistribution of wealth". Wonder why she never said that when she was in office for eight years?

Never mind, it’s time to dust off the old songs. “The workers united will never be defeated...Salmond! Salmond! Salmond!; Out! Out! Out!” Wendy is swapping powerpoint for the picket lines, standing shoulder to shoulder with workers of Scotland to demand modern apprenticeships. Raising the spirit of Red Clydeside. She’s even taken to wearing a bright red jacket for TV interviews.

”Best when we are boldest; best when we are Labour” she says in her personal manifesto. Before he entered Number Ten, Gordon Brown used these words to suggest to the party that he intended to make a break with the neo-liberalism of the Blair years. But it was all window dressing. In office Gordon Brown has been, if anything, further right than Tony Blair. The PM is now a leading exponent of the hyper-market Anglo-Saxon economic model - which was why he was so keen to embrace Nicolas “Mr Nuclear” Sarkozy, the latest recruit to the anti-welfare club.

Wendy Alexander is one of Brown’s closest political allies, and owes her job as leader almost entirely to his patronage. So does anyone buy this new Red Wendy, the peoples’ tribune? Well, perhaps surprisingly, one group that seems prepared to give her the benefit of the doubt is Compass, the respected ‘inside left’ pressure group that has been campaigning for a return to social democratic values in the Labour Party.

Compass’s main man in Scotland, Willie Sullivan, has co-written an intelligent analysis of Scottish politics, post May 2007, which argues that the leopardess really can change her spots. Sullivan laments Labour’s lost decade under Tony Blair. “Labour forgot”, he says, “what the Left has always tried to do - critique capitalism and make markets the servants of society”. He thinks the line was just about held in Scotland. “In many cases the Scottish Labour Executive avoided the worst excesses of this ‘choice agenda’ but forgot to tell the Scottish people.” But why did it forget? Wasn’t it because it knew it couldn’t talk of this in earshot of Gordon Brown?

Sullivan attacks the SNP as a “party of the Right”, incapable of promoting social democratic values because “It’s economic policy is set by an ex-bank economist and a financial analyst.” Well, Wendy Alexander fits that description as well, but Andy Kerr doesn’t call her a Thatcherite. Sullivan goes on to say that the SNP is on the way to becoming the new Scottish Tory party. “ If anything they will eventually become more market liberal than New Labour could ever be in Scotland..but they [the SNP] have played a clever political game”.

Well this is all too clever for me. Look, it was the SNP government, elected in May, that finally ended private sector involvement in the Scottish health service, after Scottish Labour put it there under Jack McConnell. This minority SNP administration has also abolished prescription charges, saved local accident and emergency units, backdated the NHS pay award, abolished student fees, cut class sizes, begun a pilot for free school meals, given equal rights to the childen of asylum seekers, rejected nuclear power, doubled the International Aid budget, ended ring-fencing of council spending and condemned the Iraq war. This “right wing” party seems to have done more to further social democratic values in ten months than Labour managed in ten years.

The argument that the SNP is a Tory party manque is based on the cuts in business rates and the cuts in local authority social service spending, following the concordat with COSLA. Well, in that case, Gordon Brown is surely a true blue Tory too he has consistently cut UK business taxes during his time in office, at the same time as crafting a personal tax regime which allows the rich to pay less than their domestic cleaners.

Gordon Brown’s conference speech attacking the SNP for cuts in services was a breathtaking exercise in fiscal hypocrisy. It was the UK Labour government’s own comprehensive spending review last autumn which set the course for council cuts by turning off the spigots of public spending in Scotland. The Scottish Executive headline budget is to grow by less than 1.8% (1.4% with the reduced health baseline) over three years, the lowest increase since 2000 and considerably less than the UK level of 2.1%. Labour-led executives enjoyed annual spending increases of up to 11% (2003/4).

We are entering, by the Treasury’s own admission, the most rapid contraction in Scottish spending in modern history. Cuts and constraints are inevitable. Attacking the Scottish government for this is like King Herod ordering the massacre of the first born and then blaming the Jews for irresponsible child care.

As for rebuilding manufacturing, creating the ‘good society’ and and challenging the dominance of the market - well, Labour has abandoned the productive economy in favour of financial services, the economy of debt. Gordon Brown has encouraged the growth of a low-regulation, light-tough and often corrupt financial regime which has turned the City of London into the Liechtenstein of global capitalism. He has enforced the “flexible labour market”, used immigration to cut wages, introduced PFI into public spending, promoted economic distortions like buy-to-let and allowed property speculators to make housing unaffordable for 90% of first time buyers. An entire generation is in hock to banks, with debts that will cripple them for the rest of their lives.

Brown’s first acts on becoming leader were to cut inheritance tax for the wealthy and restore tax breaks for private equity. He is prepared to pour £25 billion in public funds into a bankrupt Northern Rock at the same time as cracking down on incapacity benefit and allowing his ministers to say that the unemployed should be denied council houses.
Gordon Brown isn’t remotely interested in “critiquing capitalism” let alone “making markets the servants of society”.

And nor is Wendy Alexander. The idea that either of them are latter day social democrats who can trace their descent from Red Clydeside is utterly preposterous. Her politics is management science, her economic philosophy is choice, and her morality is feminist individualism. And like Tony Blair she is destined for a future in investment banking.

All Wendy is doing by raising the scarlet standard high is trying to consolidate to the Labour ‘base’ in Scotland - the core vote that still believes in social democratic values. It is a cynical exercise in focus-group politics. A risible attempt to portray Labour as the party of the people, of equality and collective security.

The SNP isn’t a party which has come from the left. It doesn’t have the same folk memory of industrial politics. But somehow it has managed to promote a political agenda which closer to the social democratic soul of Scotland than the party of the new plutocracy that calls itself Labour. Thatcherite it ain’t.

Saturday, April 05, 2008

Can Brown do a Major?

It’s a measure of how serious things have become for Gordon Brown that people are now comparing him to the former Tory Prime Minister, John Major - if he’s lucky. Like Brown, Major inherited a demoralised party from a highly charismatic leader, Margaret Thatcher. He also inherited a housing crash and an economic recession, but somehow Major still managed to win the 1992 general election. Labour MPs and some commentators believe that Brown may be able to do the same.

It would be unwise to bank on history repeating itself, however. It’s hard to see Gordon getting up on his soap box - as Major did during the 1992 election - and winning southern voters over by direct face-to-face appeals. English voters do not warm to Gordon Brown in the way many of them did to the Pooterish Major. Something to do with the PM’s Scottishness, perhaps, or his somewhat gloomy presence.

Gordon Brown has always been a somewhat shambolic individual who dresses like an unmade bed, but now he is getting the reputation of a bumbler. A prime minister who gets lost in Windsor Castle on his way to the state banquet; who last week reportedly got stuck while trying to get into wrong entrance to the room where he was to address Labour MPs. Brown has reportedly hired a former BBC producer, Nicola Burdett, to stop the gaffes and make him look better on TV. Yes, a gaffe Czar - you couldn’t make it up.

But something clearly has to be done. Yet another opinion poll at the weekend, the fourth since the Budget, suggests that the Conservatives now have a double digit lead in UK voting intentions over Labour. ICM in the Sunday Telegraph put David Cameron’s party on 43% and Labour on 32%. This is no mere blip, and indicates that there has been a widespread reassessment of Labour by English voters. (The Scottish political picture is of course different.)

On these figures, Labour has already lost, and Cameron would be Prime Minister in 2009/10 with a comfortable majority. Most commentators - this one included - still have difficulty seeing Cameron actually making it to Number Ten in one bound. However, the likelihood must be that Brown will lose his sixty odd seat majority and find himself having to do a deal with Nick Clegg’s Liberal Democrats.

A Westminster coalition might be a good thing for British politics, since it would likely bring about a change in our electoral system and the introduction of fair voting at Westminster elections. PR would be one of the Liberal Democrat’s conditions for any coalition deal, and the Justice Secretary, Jack Straw, has recently been making positive noises about electoral reform, just in case. But this is small consolation for Gordon Brown who would go down in history as the man who gave up on Labour winning an outright majority in Westminster ever again.

So, has the Labour leader got what it takes to avert this electoral disaster? Can he do a Major? Well, the trouble is that Gordon Brown has been alienating an awful lot of people recently. The Prime Minister seems to have had a political personality transplant somewhere on the way to Number Ten. Even those who disagreed with him politically respected Brown of old as a Labour conviction politician who would put an end to the shallow glitz, sleaze and spin of the Blair years. But he seems to be carrying on exactly where his predecessor left off, albeit without the style. The leader who promised an end to celebrity politics has surrounded himself with highly-paid image consultants and PR people like Steven Carter his new strategy chief.

We all thought that at least Gordon Brown would be more resolute: clearer where he stood on the great issues of the day, like Iraq, tax, the economy, detention and terror. But he hasn't been; he has been all over the place. The Labour MP for Ipswich Chris Mole, put his finger on it last week when told Brown: “no one knows who you are”.
This PM has turned dither and drift into a political art form. It started with the election-that-never was last October; then there was the confusion about whether and when he was going to go to Lisbon to sign the EU Treaty; which shaded into Northern Rock. We thought he was clear on on withdrawal from the Iraq war - but are we in or out of Basra? I don’t know, and I don’t think Number Ten does either.

More recently there was the dither over the free vote on the embryology bill; over 42 day detention, over cannabis reclassification, over whether or not to meet the Dalai Lama. The scrapping of the 10p tax band seemed like a fiscal technicality but it has ignited a mini rebellion among Labour MPs who feel that increasing taxes on some of the lowest paid workers in the country is just a little unfair at a time when even hedge-fund managers are saying that the wealthy should contribute more.

There has also been a revolt over the alcohol tax increases in the Budget- not by the SNP leader Alex Salmond, but from one of Brown’s own ministers, Gerry Suttcliffe, who said the government should change its mind. Word has now gone out from the Labour whips’office that Brown is going to crack down on dissidents, but it will be difficult for him to demand discipline when he is so manifestly unsure of his own mind. If the Prime Minister doesn’t keep to the script, how can he expect his ministers to do so?

The myth of Brown’s iron resolution has been blown by his recent vacillation. The fear has gone. It is difficult to respect a leader who flirts with daft ideas like getting young people to swear oath of allegiance to the Queen and the UK, or getting secondary schools in England and Wales to set up military cadet corps with military drills and weapons training. The idea of teaching teenagers to shoot when gun crime is such a serious inner-city problem sounds like something out of Little Britain.

Now John Major, of course, was also something of a figure of fun. His grey image and his alleged partiality for peas was mercilessly lampooned by the television programme Spitting Image. The cartoonists are only now forming their opinion of ‘Brown the gaffer’. But little was expected of Major; Brown has lost respect for promising change and then delivering a duller version of Blair. Oh, and on final thing: David Cameron isn't Neil Kinnock.

Wednesday, April 02, 2008

T5 fiasco. Just send everything to Milan.

When the going gets tough the tough get going - to Milan as it happened. That’s where the beleaguered baggage handlers of London Heathrow’s Terminal Five sent thousands of pieces of luggage to be sorted because they, er, couldn’t handle them. It took twenty four hours to get them to Italy in a fleet of lorries, but this was much faster, apparently, than sending them by air. Which must tell you something.

The idea of sending baggage to another country to be dealt with - a kind of extraordinary rendition for suitcases - was a brilliant piece of lateral thinking. But why not send the passengers there as well? In fact, why go to all the bother of handling air travellers at all when you could send everyone to Milan and then get one of those nice european trains to take them to London?

Some people lost more than their luggage. The superannuated supermodel, Naomi Campbell, lost her rag and ended up being handcuffed for spitting at a policeman. Which provoked unkind comment about about useless old bags who needed their tickets stamped. But she had a point. Did you know that BA loses 1.4 million bags every year, even without new terminals? That’s three thousand bags a day. Only a staggeringly dysfunctional organisation could manage that degree of inefficiency. Milan is clearly onto a winner here.

Perhaps rail travellers, sick of delays and dirty trains, could also be sent to Milan. Journey times might be longer, but at least it would be a pleasant trip and you would be sure of arriving on time. It would allow the train companies could do what they do best anyway, which is syphon public subsidies to their shareholders. Passengers just get in the way.

In one sense, the government has already been employing the ‘just-get-shot-of-it’ strategy. Last November, the Revenue lost two computer discs with the bank and national insurance details of 25 million people by popping them in the internal post. If only they’d sent them to Milan.

In fact, why not get Europe to run our public services? The NHS has already been sending patients on hospital waiting lists abroad to get their operations, around a thousand a year. But far more go privately. 70,000 patients a year are leaving Britain for treatment in hospitals in Europe, and the number is set to rise to 200,000 by the end of the decade.

This is surely another great export success story for Britain. We may not do manufacturing anymore, but by God when it comes to exporting suitcases or medical cases, we are world beaters.

We have discovered a fundamental truth about ourselves as a nation through the terminal chaos at Heathrow: that we really cannot organise a piss up in a brewery Which is why so many of us fly abroad these days to get drunk.