Monday, November 30, 2009

Questions, questions. Just how many options does the SNP need?

 Er, just how many questions is that again?  Once upon a time independence was a simple matter - you just asked people whether or not they agreed that: “The Scottish Government should negotiate a settlement with the government of the UK so that Scotland becomes an independent state”. That’s how it was  in the original draft bill published by the SNP in 2007.   Now, anything goes.

   Today’s St Andrews Day surprise from the SNP government, we are told,  is that there are going to be four options presented in today’s White Paper.  There will be Independence (see above); ‘Devolution Max, or fiscal freedom short of independence; a Calman Commission option of shared income tax; and our old friend the Status Quo - whatever the hell that is.  

  But why stop there?  Why not have a full federal option, whereby there is a formal separation of powers with Westminster, as favoured by the Liberal Democrats?  What about an Iceland option, where you become independent but stay out of the European Union. Many people might favour a Republican question, whereby Scotland is no longer subject to the arbitrary influence of a constitutional monarch.  An Alaskan option might also be considered whereby Scotland remains in the union, as a federal state, but retains control of oil revenues and has diplomatic ties with Russia. Or a Ruritanian option where Scotland declares itself independent, and then does nothing at all except march up and down. 

 This is all getting a little silly. You can’t have a meaningful referendum with four options. The results would be so various that it could be almost impossible to achieve a consensus. Mike Russell, the Constitution Minister, insisted yesterday that there will not be four actual questions on the ballot paper,  which will not be published until next year.  But if there are four constitutionally valid options, I don’t see how you can avoid putting them all before the people. 
   The great virtue of the 1997 devolution referendum was that the questions were very clear and transparent.  You could see what you were voting for, and as a result there was an overwhelming affirmation of the favoured constitutional option: a Scottish Parliament with primary legislative powers.  That three to one majority in 1997 ended the constitutional debate for a generation.  Having four options would simply create a huge argument,  not so  much a national conversation as a national rammy.

  Presumably, this option-inflation is an attempt by the SNP to confuse the issue - to turn the debate into a kind of constitutional soup into which all the constitutional options dissolve, allowing the SNP to get along with governing under devolution which, until now, they had been doing very successfully.  The ‘multi-option’ option is a also a distraction from the inconvenient truth that Scots really don’t want to be bothered with constitutional change, at least not now.  The latest Ipsos/Mori poll suggests that support for independence is down to 25% and that only 20% of Scots want an early referendum. 

   This stands to reason.  Asking people in the middle of a recession whether they want to tinker with the constitution seems slightly  indecent - like asking an unemployed man whether he would prefer to be in an English or a Scottish dole queue.  There are more pressing matters - which doesn’t mean the issue has gone away.  In the Mori poll, 50% agreed with having a referendum “in a few years”  In present circumstances, with the SNP government in mid term difficulties, that’s not at all bad.  Maybe Alex should quite while he’s ahead; maybe that’s exactly what he is trying to do today. Lay the independence question to rest for a few years while they sort themselves out. 

  This St Andrews Day is turning into a bit of a nightmare for the SNP.  These disappointing polling returns follow defeats on key policies like minimum alcohol pricing and local income tax, Labour’s crushing majority in Glasgow North East by election, and an epic bust up with local authorities over class sizes.  Alex Salmond is beginning to look a little like Gordon Brown.  There’s even a nationalist sleaze scandal - Universality of Cheese-gate - where a nationalist aide to the Constitutional Affairs Minister, Mike Russell, has been caught spreading abusive and highly offensive hate mail over the internet.  Shades of Labour’s Damian MacBride and his vile smears from Number Ten. The rebarbative behaviour of the cyber-nats is hardly news, but it is a shock to discover that one of them was under the wing of Mike Russell, one of the most enlightened figures in the SNP.

    When things start to go wrong in government they all go wrong together. It will take extraordinary skill to get through the next six months with the government’s integrity intact.  Alex Salmond faces defeat of the referendum  bill in parliament, defeat at the general election and the disintegration of the “historic” concordat with Scottish local authorities.  Press commentators are poised to declare the beginning of the end for Alex Salmond and the end of the end for independence. We will no doubt be reading soon how Nicola Sturgeon - who performed with her usual effortless competence on Question Time last week - should be taking over from Shrek before the SNP lose the plot entirely.  But I wouldn’t write of the big man yet. 

   And we shouldn’t write off independence entirely yet either. Or rather we should, but for a reason. What we will see today, I believe, is the SNP coming to terms with reality - which is that formal independence is becoming increasingly marginal to Scottish constitutional politics.  Everyone knows that the referendum on independence isn’t going to happen.  The debate is now all about extending home rule - how far and how fast.   

  The Calman Report, for all its faults, is a tribute to the success of the SNP in office. All the unionist parties now support giving Holyrood, greater tax powers - something that would have been inconceivable only three years ago.  Whoever wins the next UK election, something like Calman is going to be introduced and this will require the active co-operation of the SNP government.   This will be an opportunity for the SNP to turn Calman into something workable: to convert devolution min to devolution max. 

  That’s if they remain in office - and that’s not looking at all certain any more, after this St Andrews Day nightmare.  Alex Salmond needs to get a grip, put aside multi option metaphysics and focus on winning the Scottish election in 2011.   

Sunday, November 29, 2009

The St Andrews Day Cringe.

The world is dancing to a Scottish jig today, or so we're told. From the 12th Annual St Andrew's Ball in Baku; the Kirkin' o' the Tartan's Scottish gathering in Sydney; and on to Java where "a Scottish Ceilidh Band will stir all to their feet with the finest ceilidh music to be heard east of Krakatoa", according to   Rock on. Oh – and there'll be a few events in Scotland as well.  Like synchronised smearing from cyber nats  like Mark McLachlan and his Unversality  of Cheese graters.

I always feel uncomfortable about St Andrews Day.  There always seems to be something slightly bogus about it. In Norway, Iceland Ireland they have no problem with celebrating their national day with a sense of collecive pride. But here it always seems to be polluted by politics – which I suppose given the constitutional DEBATE is inevitable. The SNP see it as a recruiting pageant and Labourites see it as nationalist propaganda exercise.

The Scottish National Party have  colonised St Andrews Day and used it this year not only as a climax to the “Year of Homecoming” but as the moment to pop the question on independence – or rather to publish their white paper for a referendum on separation to take place – inevitably – on St Andrews Day 2010. This has been roundly condemned by the Labour opposition as a waste of time and money and a needless distraction from the urgent task of hauling Scotland out of recession. Commentators think the SNP is on a loser because support for independence seems to be waning, in recent opinion polls, and that today will be a St Andrews Day damp squib which will confirm that the SNP's honeymoon is well and truly over.

The bill will certainly not get through the Scottish parliament as it stands because it is opposed by the a majority of MSPs. But that doesn't mean Alex Salmond is daft tabling it. I don't think anyone in the party seriously believes that the Labour leader, Iain Gray, will be so moved by Alex Salmond's oratory that he will tearfully assent to the ballot taking place on the SNP timetable, but the bill represents the honouring of an election pledge and sends a message, not least to the SNP rank and file that the SNP leadership has not forgotten about its historic mission. Then we can forget about it until after the next election.

But is the independence project still viable? Is it still on a roll? Well, it depends how you look at it,Yesterday’s Mori/Ipsos poll suggested that only 25% of Scots want to leave the UK. – but historically formal independence has rarely had the support of more than a third of the Scottish voters. That hasn't stopped the SNP being extraordinarily successful under Alex Salmond and moving Scotland in the direction of ever greater autonomy.

In a way, the Calman Commission report, and Labour's white paper last week, is a measure of the success of the SNP. For the first time in Scottish history, the three opposition parties – Labour, Liberal Democrats and the Scottish Tories have united behind a proposal to give the Scottish parliament extensive tax powers. That would never have happened had the SNP not won power in Holyrood in 2007 and forced the unionist parties to come up with a better offering than independence.

Now, I know that many people believe that Calman isn't worth the paper it's printed on, and that it's a unionist trap. The estimable Nicola McEwen of Edinburgh University has described it as “not so much devoluion max as devolution and a little bit”. The tax powers are incoherent and piecemeal, the borrowing powers are unworkable and it doesn't address qurestions like Scotland's right to a share of oil revenues. True. But I think we are missing the constitutional wood for the presentational trees.

Clearly, Calman is not a proposal for full fiscal autonomy, nor is it a fully worked out federal model, since it doesn't propose constitutional changes at the federal, ie Westminster, level. But just look what it does do: Calman establishes, for the first time, the principle of fiscal accountability, transparency – that the Scottish parliament should raise the money it spends. Calman not only proposes the partial repatriation of income tax, it also proposes that Scotland should have new taxes like stamp duty. It is quite remarkable that the unionist parties put their names to this report – especially the Tories.

Of course, George Osborne has distanced himself from last week’s Labour white paper, but importantly he has accepted the principle that the parliament should raise the money it spends. If the Tories are elected next May, I believe they will try to impose some system of fiscal accountability to Scotland, partly to address the complaints from Tory backbenchers and the London press about Scotland getting too much public money, and partly because they need to force through radical cuts in spending across the board. With a nationalist government in Holyrood, the surest way to achieve this would be through fiscal autonomy because as we all know, the amount raised by taxation in Scotland is considerably less than what is spent here.

If Labour win, then they will try to implement Calman. But they will have to do it with the active cooperation of the Scottish parliament. It couldn't just be handed down from on high because that would have zero legitimacy. This suggests to me that the Scottish government would be able to argue strongly for a better arrangement, if not right away, then in a few years time.

I believe this is why Alex Salmond has been willing to accept that 'third question' on the referendum ballot paper – the 'devo max' option, based on Calman. It may be a unionist proposal, but so was the Scottish parliament. People said that devolution was a trap, a half way house that would never work, a means of undermining independence. It was – but it was also a democratically elected legislature which has steadily drawn power to itself. Calman would be an important new stage in the evolution of Scottish democracy.

So, while the SNP may not be doing so well right now, the momentum is still towards Scottish autonomy. The truth is that independence is paradoxically, a goal that will never be reached because full separation is no longer possible. It isn't the destination that matters, but the journey.

Friday, November 27, 2009

Peace in our trams

Peace in our time!  Combatants in the long-running Edinburgh tram wars are negotiating a Christmas Armistice.  The Council is promising that Edinburgh's Princes Street will be cleared by next week.  Rejoice!  Rejoice!  Citizens have been out waving saltires and offering their daughters to the flourescent liberators mopping up the remains of the German resistance. 

    It has been tin hats time for plucky Edinburgh folk for most of the year, ever since heavy units of the Bilfinger Tramm Corps blitzed much of the centre of the capital city. The central thoroughfare of Princes Street was almost totally destroyed by crack sturm-arbeiter who seized vital supply lines cutting the city in half and making movement almost impossible. The enemy also laid waste to much of Granton and Leith Walk, while traffic through the crucial Shandwick Place corridor was halted during daylight hours. Pack animals were imported from Eastern Europe to help with the movement of essential supplies.

Yes, there's been heavy pounding across this once gay city that will never be forgotten.  Princes Street, it's historic heart, still presents a sorry face, with huge craters where once proud Edinburgh matrons paraded in their fur coats, luxuriating in their lack of underwear. Where pawky wee squaddies danced their jigs and reels on furlough from Edinburgh Castle. Where bonus bankers calculated their pension deals in the armchairs of the Edinburgh New Club. Now all that's left is rubble and memories. Open drains and shattered power lines where once the Edinburgh Festival brought joy to millions every summer.

Can this once noble city ever recover from such devastation? The cost of the damage is almost incalculable. The shining rails that were supposed to be knit this sprawling city into a metropolitan powerhouse now look like a forlorn dream. On top of the £600 million in lost transport infrastructure there's the revenue lost from what used to be one of the prime commercial districts of Britain. Some say it is time to take a wrecking ball to the entire city – to raze the memories of the tram wars, and try to start anew.

But it'll take more than a few holes in the roads to break the spirit of Edinburgh folk, who have put up with almost unbearable hardships in the war effort. Road blocks and barricades litter the city. People wander around as if in a daze unable to comprehend the scale of the disaster that has hit them during long months of hostilities. The once bustling commercial and financial centre stands virtually silent.

   Can it really be true that the war is over!  There have been so many false dawns, so many promises broken.  But still they dare to dream  Edinburgh is sure of one thing: as the City buries its dead, it won't pay the Bertie Bilfingers a penny of their reparation demands. Plucky little Edinburgh will fight to the last town councillor, 

Wednesday, November 25, 2009

Why is Labour only Labour when it's losing?

    Following the Queen’s Speech last week, I have informed my bank manager that I have passed a private members bill to abolish my overdraft within four years.  Having entered into this solemn and binding commitment with myself, I feel sure that he will grant my request for unlimited additional borrowing in the mean time. 

  Yes, a lot of what was in the Queen’s Speech was,  like the Fiscal Responsibility Bill, complete nonsense.  Passing a law to make the government to do what it is supposed to be doing anyway is to treat the electorate with intellectual contempt. However, there was also a good deal of  interesting material in the Queen’s Speech that was largely ignored by the media, on the grounds that, since Labour is on the way to the funny farm, nothing it says is worth listening to.

   But listen up nevertheless, for this last Queen’s Speech of the Labour era tells us a lot about what has gone wrong over the last 13 years.   Whenever Labour seems to be on the rocks -  unpopular, losing votes, on the way to the electoral dustbin - it suddenly rediscovers its social conscience; dare I say it: its heart.  The Queen’s Speech was filled with measures which can only be described as, well, Labour policies.  Like abolishing child poverty, giving job security to agency workers, introducing free care for the elderly in England , promising to extend Scottish home rule. Why didn’t it do these things when it had the chance?

   The 2009 Queen’s Speech has been dismissed as an exercise in political gamesmanship, but if so, Brown is playing a very curious game.  The speech, drafted of course by the government,  included a bill to prohibit those iniquitous cluster bombs which cause terrible injuries to innocent people in war zones;  a bribery bill to clean up corrupt business practices at home and abroad and end scandals like the Al Yamamah arms contract;  and an energy bill to will help poor consumers and give financial incentives for energy firm to develop carbon capture and storage projects.  

   And there’s more.  I won’t bore you with all the details, which you can read for yourselves, but there is a law to limit banker’s bonuses and curb City risk-taking, a legislative commitment to outlaw age and gender discrimination,  and a law committing Britain to spend  0.7% of national income on helping poor countries, which has been hugely praised by Bob Geldoff and Bono. Now, it’s easy to say that this is all hogwash, and Labour is only promising to do these worthy things because it knows that it will not actually be in government to deliver them. It’s a bit like a ‘living will’ - a series of commitments designed to put the Tories on the spot.

    But hang on a minute. If the aim is to damage David Cameron by getting him to disown these policies, doesn’t that rather suggest that the're rather popular?   Gordon Brown - who lives and breathes focus groups - would surely not have put all these measures in the Queen’s Speech if he thought they were vote losers.  This is his last ditch, his final throw of the dice - mix any metaphor you like.  These bills are intended to boost Labour and give voters a clear idea of where Labour stands before polling day in May.

  So the obvious question is, again: why the hell hasn’t Labour introduced these measures before?  It spent nearly a decade dissing the Scottish Parliament for introducing free personal care for the elderly.  Too expensive!  A subsidy for the middle classes! Why shouldn’t old people sell their homes?  Well, for one very important reason: giving older people support to remain in their own homes is not only humane, it  delays the moment when they become a costly burden on the NHS.  Now suddenly, when the government is facing oblivion, Brown discovers that free personal care has been a cost-effective vote winner all along.  

   Why the delay on cracking down on banker’s bonuses and cleaning up the financial system?  One of the abiding mysteries of the Labour years is why successive Labour leaders hitched their fate to the spivs and speculators of the City of London.  It all goes back to the days of Neil Kinnock, and Labour’ desperation to show that it wasn’t anti-capitalist and cloth cap.  But that is ancient history.  Bankers are now the most loathed members of society after paedophiles, and even the Tories have been disowning their behaviour since the crash.  

   The entire financial “community” has been deeply unpopular with the voters for at least a decade.  Successive scandals like endowment mortgages, personal pensions,  with profit bonds have rotted any faith that the people ever held in the probity of bankers.  It’s why so few people save money in pensions - they can see very well that they are going to get ripped off.  Labour had a golden opportunity to remodel social democracy for the new century by cleaning up the city, ending the bonus culture, creating new mutuals and building societies, and introducing a fair deal on housing.  Instead, it cynically created a housing shortage in order to bid up asset prices and put an entire generation of young families into colossal debt to the banks. 

    Being good is popular. So why has Labour in office so often opted for unpopular vote losers?  In last weeks Queen’s Speech there was - thankfully -  not a single mention of the War on Terror, the recurrent theme in New Labour legislation since 9/11.  This government squandered support among middle Britain through its determination to diminish our freedoms and launch unpopular wars to combat a fictitious threat.  4 million CCTV cameras, identity cards, detention without trial, connivance in torture through rendition - these were never popular, which is why the Tories have disowned them. 

   Well, better a sinner repenteth, I suppose.  As it breathes its dying breath, Labour has suddenly rediscovered its soul.  You can see it on the streets of Glasgow North East, where the party is learning to be Labour again.   You can almost hear the thumbscrews being loosened on Labour dissidents.   Gordon Brown is promising a Tobin Tax on financial transactions, for heaven’s sake!  Why has this been left until the very last moment, when Labour is about to enter the long sleep of opposition?  Stuffed if I know. I’m off to the bank.

Monday, November 23, 2009

Could Labour win?

A nagging worry is keeping Labour MPs and ministers awake at night. It's not the expenses row – they've gone through the pain barrier on that already. It's not the prospect of a hung parliament and having to do a deal with the Liberal Democrats – they could live with that - or even the prospect of losing power altogether. No, the new spectre stalking Westminster is the possibility that Gordon Brown might actually win the general election in May.

The latest MORI/Ipsos poll in the Observer puts the Tories at only six points ahead of Labour for Westminster - not enough for David Cameron to form a government, for which he needs a minimum of 117 new MPs. One poll doesn't make a summer victory, but there's no doubt that things have been looking up for Labour recently. Only a year ago the Tories were ahead by 20%. Last month's Sunday Times/Yougov poll cut that lead to 11%. At a comparable moment before the 1997 general election, Tony Blair was consistently ahead by between 12% and 25%.

And it's not just opinion polls. Labour have been winning by-elections again, in a way John Major never did on the eve of the 1997 election. In the Glenrothes by-election, Labour astonished themselves by turning an expected loss to the SNP into a seven thousand vote victory. In Glasgow North East – one of their rottenest rotten broroughs – Labour won by a remarkable eight thousand majority with 60% of the vote. For the moment at least, David Cameron's momentum has stalled. The bookies are anxiously reviewing the odds.

Now, this Labour turnaround, if such it is, could be most inconvenient. An air of benign defeatism has hung over the government benches in Westminster for most of the last year. Many Labour MPs are standing down to spend more time with their expenses-financed property portfolios. A number of Labour ministers past and present have lined up nice little jobs in the City. Now they face having to return to the Westminster grind, and with no second homes allowance. Another four years having to be nice about Gordon in public - the agony!.

Worse, Labour's apparent polling revival raises the leadership question yet again. Confident they were going to lose, Labour MPs had more or less stopped bothering about Brown's leadership. In fact, it was quite useful having a dud PM on which they could lay the blame for expected defeat. But now, if they're in with a chance, however remote, then it becomes the duty of Labour MPs, surely, to consider changing horses and installing Alan Johnson in post in the New Year. For, while the polls suggest the Labour government is recovering, Gordon Brown is as unpopular as ever.

So, how has all this happened? Well, voters are feeling more optimistic about the economy – that is confirmed in the latest poll. A year ago, everyone was talking about financial apocalypse and the possibility of another Great Depression. Now it appears that apocalypse has been averted and while many people are losing their jobs, those who still have them are doing rather well. Home owners with an average mortgage have had a windfall of several hundred pounds a month. The public sector, which employs a quarter of the work force in Scotland, has escaped spending cuts and many employees are getting pay increases instead of P45s..

People have money to spend and everyone's getting bored with austerity chic. It may all be funny money, but the British economy has been living a credit-fuelled fantasy for years, so why not a few months longer? Brown is on course to borrow £200 billion this year, or around 13% of GDP. Coupled with quantitative easing from the Bank of England, and give-aways like the car scrappage scheme and the cuts in stamp duty, this amounts to an irresponsible and even reckless handling of the national accounts. But hey! Who ever bothered about prudence – this is politics.

The Tories are may have the economics right – this continuation of the debt cycle cannot be be sustained – but they may have got the politics wrong. They fell into the spending trap laid by Gordon at his sneakiest. By throwing money around, he got George Osborne, the shadow chancellor, to start talking about swingeing cuts in government spending; freezing public sector pay and ending final salary pensions. At their conference, the Tories promised to take an axe to the state bureaucracies, getting rid of all those phoney equal opportunities team leaders and multicultural outreach co-ordinators. Yesterday, David Cameron said there would need to be an emergency budget to “cut the deficit”. His realism is commendable, but all this talk of austerity has started to frighten people. Women voters in particular are anxious about the Tory assault on the state since many of them are either working in it or relying on it help with child care and education. They liked Labour's promise of free social care in the Queen's Speech last week.

The government may be acting with transparent cynicism in buying the general election – but economic literacy has never been our strong point as a nation. The public's capacity for self-delusion is pretty unfathomable, even when they are being bribed with their own money. Gordon Brown may be taking us down Zimbabwe road, but as long as people can buy new cars and see house prices going up who needs a map?

Will this irrational exuberance last till polling day? My own view is that Labour is too far gone to recover in time for next May because the entire South of England has already made up its mind and wants a change. Gordon Brown is still immensely unpopular, even if his economic policies are not, and Labour certainly show no sign of getting rid of him. I suspect people will begin to realise before polling day that they're being sold a fantasy. If unemployment rises to near three million by next spring, Brown's goose will surely be cooked.

But what this poll blip tells us is that Labour MPs can no longer rely on losing the next general election. They can't just coast comfortably to defeat. They now have to decide whether or not to get up off their backs and make a fight of it. At the very least, go back to their constituencies and prepare for a hung parliament.

Saturday, November 21, 2009

Divorce - the Belgian way

You wonder how Belgium can be bothered having a national question. Does a country this small really need a velvet divorce? You can drive across it in a couple of hours and hardly notice you've been there. And despite two years of constitutional upheaval, Belgium certainly doesn't look like a failed state. Travelling between picture book cities like Bruges and Ghent, with their chocolates and dentilles, you pass through endless neat suburbs and orderly villages of restored cottages. Bosnia it isn't. Belgium is twee in a way rural England is supposed to be, but isn't. I'm even told that garden gnomes came originally from Belgium, brought back home by British soldiers fighting in Flanders field in the First World War. Now the gnomes of Flanders want their own country.

Belgium has had one of the most intractable ethnic disputes in Western Europe. The enmity between the Dutch speaking Flemish in the north and the French speaking Walloons in the south of the country is deep, and intense, though fortunately not bloody. There are no pogroms or street fights, just the occasional flag burning. But these two peoples really don't seem to want to share the same space. Last year, a failure to agree a new division of powers between Flanders and Wallonia left Belgium without a government for six months. The King had to step in and force the warring political parties to come to their senses and form an administration. In the capital, Brussels, a kind of linguistic ethnic cleansing has been taking place, with shop-keepers in Dutch speaking localities being ordered to take down signs written in French Last year, it was reported that a couple in one suburb of Brussels was forced to prove that they spoke Dutch at home before getting access to childcare

Following last month's elections, in which the Flemish separatists made further substantial gains, there is an expectation, almost a presumption, that Belgium, after 180 years as a functioning nation state is on the road to partition if not perdition. The Flemish, with around 60% of Belgium's 10.5m population believe they are the entrepreneurial, go-ahead partners in the Belgian national project, and tend to regard the Walloons, with their socialist politics and trades union ways, as a drain on the exchequer. Wallonia supplies less than 40% of Belgium's GDP while consuming more than half of public spending. This hardly surprising, however, since unemployment in declining industrial Wallonia has been running at 20% - twice the rate in Flanders.

The way some Flemish nationalists talk about the Walloons is similar to the way Tory MPs used to talk about the Scots – subsidy junkies sponging off English taxes. Since 1993, Flanders and Wallonia have had their own regional parliaments with extensive economic powers, but devolution does not appear to have resolved the constitutional issues. Belgium is a de facto federation, except that neither of the dominant regions is prepared to give the federal government sufficient power to hold the country together. What is emerging is a confederation of two largely independent regional states living apart together within the boundaries of a nominal national entity.

Brussels, a kind of city region, has been the piggy in the middle the middle. The climate of constitutional uncertainty led t the neurotic drawing of linguistic boundaries in Brussels suburb. Paradoxically, it may be that the only thing now holding the country together is the financial crisis which has forced Flanders and Wallonia to recognise their common interests in the face of economic adversity. The collapse into state ownership of the large Belgian bank, Fortis, was a blow to national self-confidence but it also showed that there was some point in having a Belgian-wide government capable of nationalising failed financial institutions. But as the debris of the credit crunch is cleared away, the rivalry between Flemish and Walloon is likely to resurface and intensify as both sides blame each other for rising unemployment and higher taxes.

Mind you, some eurosceptic conspiracy theorists believe that Belgium's constitutional crisis is a plot by the European Union to break European countries into regions the better to pursue its objective of creating a European super state. This little foundation in fact and the Belgians are quite capable of breaking up their little country on their own. Indeed, constitutionalists can equally claim that the EU is a countervailing force against disintegration since Flanders and Wallonia would have to reapply separately for membership of the European Union if Belgium did actually disintegrate. Nations like France and Spain, worried about their own regional autonomist movements might try to block the entry of the newly divorced states of former Belgium. Though it would be an irony too rich to contemplate were Brussels, the administrative heart of the EU, were to be denied entry to itself.

But euro paranoia aside, what lessons if any from the Belgian constitutional trauma? Well, if nothing else it confirms that language remains the most divisive factor in inter-communal disputes. Fortunately, Scotland and England speak the same tongue. We don't need to worry about English language commissars ordering Scottish families to speak English at home or vice versa. Linguistic apartheid is the most disturbing dimension of the Belgian constitutional imbroglio. It is overlaid by a racial antagonism to Muslim immigrants - the Flanders nationalists have tended to be parties of the far right – more BNP than SNP. The Flemish separatist party, Vlaams Blok, was successfully prosecuted for racism and xenophobia in the Belgian supreme court in 2004. We are fortunate that the Scottish National Party is a civic nationalist party with a social democratic centre of gravity.

But language and race aside, is the UK going the way of Belgium? On the face of it, with a nationalist administration in Holyrood, and with a possible future Conservative government in Westminster looking to address the West Lothian Question, it might appear as if Britain is on the same trajectory. But somehow, I don't think it will come to that if only because of the British tradition of constitutional innovation. Already the First Minister, Alex Salmond, is making discreet overtures to David Cameron, the likely future UK prime minister. I suspect there will be an understanding reached about giving Scotland more economic powers in exchange for a review of the Barnett Formula. There need be no histrionics. If a divorce is on the way it will be a very British divorce, not a Belgian passion play.

Tuesday, November 17, 2009

Glasgow North East was a disaster for the SNP.

With twenty twenty hindsight, everyone seems to be saying that Labour were always going to win in Glasgow North East: 74 years, in the blood, a monkey with a red rosette etc.. That the result tells us nothing about the political condition of Scotland on the eve of the most important general election in a generation. Well, I disagree. It was certainly a bad night for nationalism - the SNP got off relatively lightly because the echo chamber of Scottish politics, the UK media, is really only interested when the SNP are winning. But they should be in no doubt about the significance of the defeat.

Every generation or so, the SNP persuades itself that it has found the key to electoral success in West CentralScotland. After Glasgow East – won by the Nationalists on a 22% swing – they finally thought they'd arrived. Now in Glasgow North East they're back where they started. By rights Labour should never have won this by-election. In Gordon Brown's darkest days, in the midst of an unpopular war, after an epic expenses scandal in which the local MP, Michael Martin, played a leading role voters in one of the most deprived and neglected constituencies in the country still turned out to support the party that has apparently done so little for them.  The SNP has no excuses here.  They may mutter about intellectual challenged Glasgow voters, but the people have spoken, even with the lowest turnout in Scottish by-election history, and the SNP needs to listen.  The scale of Labours victory – 8,000 votes - was a profound shock to the SNP and following the Glenrothes debacle people are already betting on how long Alex Salmond will remain as leader. His critics will round on him for his obsession with an independence referendum that was never going to happen and for his vainglorious forecast of “hanging Westminster from a Scottish rope”.

More worrying for the SNP, Glasgow North East shows that Labour is capable of regaining its soul - reasserting its claim as the 'national' party of Scotland. Willie Bain showed that a good local candidate, prepared to speak his own mind and depart from the Labour party line, is all but unbeatable in West Central Scotland - especially if he has strong union backing.   In Glasgow East, Labour lost through incompetence and poor organisation. A capable shadow Scottish secretary, Jim Murphy, has put that right. and Labour won't throw seats away again in a hurry.

The timing of Glasgow North East is as important as the actual vote.  The morning after the May general election, Scotland will suddenly remember what we've all forgotten in the hazy crazy years since 2007: that Labourremains the dominant political force in Scotland. The vast majority of Scottish MPs next May were always going to be Labour – but now they could be in the running for a Caledonian landslide The Scottish Tories are going nowhere; the Liberal Democrats are becalmed, and the SNP is going backwards on its showing in Glasgow North East. The SNP's setback obscured the scale of the defeats suffered by Scotland's other major parties. Even with their best candidate in years, Ruth Davidson, the Tories were still left vying with the BNP at the scary end of the poll, actually losing votes on their 1997 showing. Their only consolation was that the Liberal Democrats did even worse, coming behind Tommy Sheridan. Tory hopes of winning a Scottish breakthrough in the general election died last week – which leaves David Cameron with the uncomfortable prospect of winning in Westminster and losing his mandate north of the border. But the surprise will be that it may well be Labour that isleading the charge against London rule.

   In opposition, Scottish Labour will be liberated from the dead hand of the New Labour London leadership.Labour activists – those that are left - will no longer have to bite their tongues over the latest disastrous policy pronouncement from London or the latest disastrous war  Scottish Labour will be free to start sounding more nationalist, with a small 'n', than it has since the days of the Scottish Constitutional Convention twenty years ago.. We will be reminded that, since the days of Keir Hardie, Labour has been the main vehicle for Scottish home rule aspirations. That it was Labour that set up the Scottish Constitutional Convention, which the SNP boycotted, and that it was a Labour government that delivered the Scottish parliament.  Labour's pitch at the general election campaign is already clear. If they have any sense, they will set aside cold turkey unionism and offer a better Holyrood, with added powers. They will claim that Labour, and only Labour, can defend Scotland against the Tories. Labour have already accused the SNP of being in bed with the Tories, and in Holyrood there has undoubtedly been nationalist collaboration with the old class enemy. 

No, this doesn't mean that the SNP are going to lose power in the Scottish parliamentin 2011 – the Scottish votersmay still split their ticket, judging that the nationalists have shown themselves in office to be the most able party of government in Holyrood.  But it will be close. Labour only lost last time by one seat, and the Scottish Liberal Democrats will be much more inclined to form a coalition with Labour than they were in 2007, when they were fed up being the rump of the Lib-Lab donkey. With the Tories in power in Westminster, Labour will be able to claim that the SNP are irrelevant to the real struggle against Cameron's cuts.

So, what does the SNP do to counter the resurgence of Scottish Labour? Dump Salmond? No, he is still a formidable political asset, a powerful leader who is still immensely popular in Scotland- but he has to stop sounding like the spokesman for the Edinburgh banking community.. Dump independence? Well, they could do with laying it to rest after their referendum bill is defeated. It is beginning to look like an obsession, and a distraction. Give up? Well, if they can't win in West Central Scotland, they can't really expect to command Scotland. The SNP needs a new formula for social democratic nationalism, if it isn't to end up once again, bitter and divided, on the sidelines of Scottish politics. It's happened before, and after Glasgow North East, I fear it could happen again.

Tuesday, November 10, 2009

Brown's Tobin tax bombshell.

   Shake me, I must be dreaming.  I could have sworn that Gordon Brown just called for a “Tobin tax” on international financial transactions to curb the excesses of the banks and  provide funds for developing nations and climate change.   Can’t be true, surely.  I must have nodded off, somewhere.  

   This is the prime minister whose ‘light touch’ regulation and tax breaks turned Britain into the biggest offshore tax haven in the world. A man who has been bought and sold by the City of London.  A First Lord of the Treasury whose minions rubbished the idea of a tax on financial transactions when it was floated by the boss of the Financial Services Authority, Adair Turner, only three months ago. 

  But there it is  in black and white in the communiqué from the G20 summit in St Andrews.  Gordon Brown has asked the International Monetary Fund to look into the feasibility of “a financial transactions tax” - a tax on international bank transfers first proposed by the American economist James Tobin over thirty years ago to rein in the anarchic forces of financial globalisation and dampen currency fluctuations.  The Prime Minister appears to have conducted the most dramatic economic u-turn of his entire period in office. 

   Brown says that he wants a new “social contract” with the financial services industry. “It cannot be acceptable”, he said in his speech to the G20 meeting of finance ministers in St Andrews, “ that the benefits of success in this sector are reaped by the few, but the costs of its failure are borne by all of us”.   Powerful stuff: the St Andrews Declaration, it should be called.   This column has been pretty tough on the prime minister in recent years, along with the rest of the UK media, but on this at least, Gordon Brown deserves to be praised.  That is, if he means it.  There is a suspicion that the PM has floated this idea secure in the knowledge that it will never happen.  But let’s dream on for a moment, and imagine that he really is serious.  

   So what would this Tobin Tax look like?  Well, first of all it needn’t necessarily be a tax.   Brown wants to create a fund to ensure is that, in future, it is the world’s banks that pay the cost of banking crises not the taxpayer.  At present, when one of our mega banks, leveraged 30-1 and loaded up with toxic mortgage bonds, becomes insolvent, it holds a gun to the government’s head:  either bail us out, or we’ll wreck the economy.  It’s the Dirty Harry approach to financial regulation: “Ok punk. Do you feel lucky

    Politicians don’t want to go down in history for creating economic depressions and throwing millions out of work, so they generally hand over the money.  It isn’t theirs, after all. The Bank of You and Me is the most generous financial institution in the world, ever ready to empty its accounts in order to salvage the spivs and speculators.  After they get their hands on our bail out cash, the banks then just carry on speculating as before, paying themselves colossal bonuses,  sowing the seeds of the next crisis.  It is our old friend moral hazard. 

  Banks are intellectually and morally incapable of seeing that this is an unacceptable way to behave.  They are blinded by a curious, almost religious conviction in their right to hold the world to ransom.  As the boss of Goldman Sachs, Lloyd Blankfein,  confirmed bankers believe they are on a mission from God - doing “God’s work”.   Society must find a way to make this deluded cult see that their personal wealth is derived from the expropriation of millions of ordinary people around the world.  If it hadn’t been for the bank rescues, all of the Wall Street banks would have gone out of business, Goldman Sachs included.  Mr Blankfein would have gone to meet his maker 

   Socialism for the banks is unacceptable. It's time to liberate them from the state.  They must be made so contribute to a stabilisation fund, either through taxation or through insurance, so that in future when “systemic” banks like  HBOS or  Royal Bank of Scotland go under as a result of their own greed and irresponsibility, they do not turn to the taxpayer for help.  The money is already there.  This is simply prudent financial management - based on the same principle as the hedge fund.  The only difference is that the banks pay for their mistakes, not society. 

   Needless to say, the bankers aren’t keen on this. They say it would wreck competition, deprive productive industry of capital, slow down the wheels of finance.  Well, they would say that wouldn’t they.  More seriously, the idea has been dissed by the most powerful banker of all, Tim Geithner, the American Treasury Secretary, and if the US doesn’t adopt the system, then it will fail because no other country will take it up.  But it is not acceptable for a country which has been the epicentre of the greatest global financial mismanagement in history to have any veto on attempts to prevent it happening again.   I believe Barack Obama can be made to realise this.  

      It is certainly feasible technically given the information technology that allows international finance to take place.  If we can trade Collateralised Debt Obligations and Credit Default Swaps then we can tax financial transfers. If it is international, then no country faces a loss of competition.  A Tobin tax is not just a financial measure, but a call for a form of world governance and would require to be administered by the IMF or the United Nations.  Pah, say the critics - they’ll never get their act together.  Well, if they don’t we are all doomed, because climate change will also demand a form of world governance.  Brown was right to link the financial transaction tax directly to the environment because humanity no longer has a choice but to manage its affairs on a global basis.  The financial transactions tax is a suitable vehicle since the richest nations would be making the greatest contributions. 

    Yes, Brown may be guilty of cynical posturing, trying to sound tougher on the banks than George Osborne.  But now that this issue is on the international agenda it will not go away. The Prime Minister has finally given the world a moral lead. And as Roosevelt said, the only thing to fear is fear itself.  

Monday, November 09, 2009

What about the homeless ducks?

  But what about the ducks?  Has anyone thought about them? It’s all very well cutting MPs expenses, but what about the mallard  community, deprived of shelter at this crucial time of the year. 

  As the duck houses of Britain fall into decay and disuse, we face a major scandal of homeless ducks, geese, coots, grebes and other winged aquatics wandering around the gardens of suburban Britain cold and destitute, unable to raise their families, at risk from predators like cats and rats. Spare a thought for them this Christmas, after Sir Christopher “Duckling Killer” Kelly cut off  this vital source of government support. 

 And then there are the moats. These are a vital natural resource, part of our great British heritage, a home to many and varied life forms, including primitive creatures like the Douglas Hogg MP.  The Kelly clamp down  means that the moats of Britain will now go uncleaned and unloved. Putrid circles of shame surrounding some of our greatest historic houses.  A blot on our national character. 

  And at a time of recession, when millions are losing their jobs in manufacturing, is this really the right time to be destroying a vital market for toilet seats, bath plugs, fake tudor beams, porn films and many other consumer industries which were being supported almost entirely by MPs misusing their second homes allowance? Have the parliamentary standards commissars given no thought to the impact on the wider economy? 

    And what about family life?  It is widely reported that, once MPs are banned from employing their wives, members of parliament will start wife-swapping.  There is nothing in the new rules to stop MPs hiring their colleagues’ wives, husbands, children and mistresses.  But this is surely nothing less than state-sponsored prostitution.  For we all know what MPs get up to with their secretaries and researchers on those long and lonely all night sittings.  What example will our legislators be giving to the people of Britain if they turn the Palace of Westminster into a bordello?

   Parliament must act.  A new bill, the Duck House Compensation Bill, should be passed as a matter of urgency to provide a fund for the protection and shelter of all endangered acquatic birds.   There must be doubling of parliamentary salaries forthwith to allow MPs to keep a proper roof,  or two,  over their heads.  And as of tomorrow, this column will be accepting contributions to the Lords and Members of Parliament Relief Fund.  They need your help now and there is no more worthy cause this Christmas.   So, please, please give generously. 

Sunday, November 08, 2009

Black holes - some are blacker than others

It was a good week for black holes.  On the day that another £25 billion was poured into the black hole outside Edinburgh formerly known as the Royal Bank of Scotland,  the Auditor General.  Robert Black, forecast a £3 billion black hole in the Scottish budget over the next three years.  The latest mega bung to the banks merited hardly any comment; the hypothetical Scottish spending deficit was heralded as practically the end of civilisation as we know it.

   Politicians and press vyed with each other in calling for savage cuts in spending, so that we can “learn to live within our means” -  while, er, blowing tens of billions on worthless bank assets.   Financial commentators seem to get some kind of perverse thrill out of calling for public spending cuts.  Slash the lot!  Get rid of free personal care for the elderly -  it just keeps old people alive longer.  And scrap free prescriptions, free school meals, the programme to cut class sizes.  It’s all waste, waste, waste.    There are far better things to spend public money on than children and the sick, like nationalised bank bonuses .  

   The actual money spent on these supposedly ‘spendthrift’ policies is a drop in the bucket compared to the colossal sums being handed to the banks.  Together they  cost less than half the one billion RBS wants to pay in bonuses this year to its staff as a reward for screwing up the British economy. It seems blindingly obvious that this is an irrational and morally inexcusable use of public money.  But people find it hard to make the connection.  There is a kind of fiscal myopia that afflicts politicians and commentators when it comes to public spending.  There is also a deeply ingrained prejudice against the state - a belief that all money spent on public services is by definition a drain on the productive economy.   But at least money put into the public sector has the virtue of employing people - and employed people spend money on things, thus stimulating economic activity.

    About 60% of Scottish GDP comes through the public sector and about one in four employees are employed directly by the state, mainly in the NHS and education.   Many more jobs are in firms dependent on public sector contracts and in service industries that depend on public sector salaries.   Yes, there are too many public sector bureaucrats pulling down big bonuses and there is a lot of structural inefficiency in our fragmented and uncoordinated local government system.  But the vast majority of public sector employment is useful and productive.  Certainly, if you were to cut the public sector tomorrow by the levels suggested by Robert Black’s auditors, there would be a significant and immediate economic slump. 

   So, here’s a thought:  why not divert a few hundred million  a year from the £45 billion now being poured into RBS's toxic waste dump in Gogarburn and send it down the road to the Scottish parliament?  Problem solved. The Scottish budget deficit would be eliminated and RBS wouldn’t even notice the loss since it is burning such enormous mountains of cash.  In one month - September - it lost almost the equivalent of the Scottish budget deficit.  Public money given to the RBS largely disappears into  its £2.3 trillion balance sheet.  A scandalous amount goes abroad to compensate other banks for RBS losses; some of it goes back to the taxpayer in “insurance” payments to the state for looking after its hundreds of billions of toxic assets. Very little of it actually goes to businesses, because,  according to the RBS boss Stephen Hester on BBC radio last week,  in the recession firms “aren’t asking for loans”, right now.  This must come as news to all those small businesses that are going bust. 

    RBS insists that money put into the bank is money well spent since it will ultimately return to the taxpayer when the bank shares recover.  But surely money put into public services comes back to the taxpayer much more reliably in the form of services.  At least these are tangible and carry no moral hazard.  Care workers don’t get bonuses and nor do teachers, nurses and dinner ladies. But arguments like this simply aren’t taken seriously. The ‘party’s over’ on public spending, we are told, and apocalypse awaits. 

  As the auditor general’s report on the Scottish deficit was published, I happened to be at the sharp end of the public sector crisis : a Herald - sponsored debate at a conference of personnel directors - the the people who will be handing out the p45s if and when the great public spending squeeze happens.   I have to say, they didn’t seem very fearful. There were forecasts of doom, but no one seemed to think it was imminent. There was the usual talk about ‘hard choices’, getting rid of elderly care care,  school meals etc..   There was curiously little enthusiasm for cutting the salaries of council chief executives, freezing public sector pay or curbing copper bottomed final salary pensions. As for efficiency savings,  I was told  by one expert that it costs so much to get rid of senior staff in local government that it was pointless trying.  Even the idea of merging some of Scotland’s 32 local authorities to get rid of duplication, would, I was assured , add to costs because many new officials would have to be hired to supervise the mergers.  They could do with some of these people in the banks. 

  Certainly there is fat that could be cut out of the public sector and there are privileges which are no longer sustainable at a time when private sector wages are falling and final sector pensions being axed.  But there is little point in making very deep cuts in the actual provision of services, most of which are essential. What is profoundly  damaging for the future is the erosion of confidence in the the value of money.  All that cash thrown at the banks, along with quantitative easing and other policies,  spreads a corrosive cynicism throughout the public sector.   Why should they be counting the pennies and sacking lots of staff when countless billions are being handed over to financial institutions which are not only unfit for purpose, they actually obliterate the wealth they are supposed to be holding in trust? 

    No - the time will come for economies in the public sector,  But not now.  It’s just about all that’s keeping the Scottish economy going. 

Friday, November 06, 2009

There will be a referendum on independence - in 2012.

 The decision by the Scottish Liberal Democrat conference to boycott the Scottish Government’s forthcoming referendum bill might seem about as momentous as Stephen Fry abandoning Twitter because someone said he was boring.  (Oscar Wilde never had to put up with such indignity!)   So why are people saying that it has made a referendum almost inevitable?  And even that the campaign for the 2012 referendum on independence has already begun..  Let me explain. 

  The closed-door debate in Dunfermline last weekend was designed to get the LibDems out of the hole they dug themselves into after the Scottish elections in 2007, when Tavish Scott, the SLD leader refused even to discuss a coalition with Alex Salmond unless the SNP leader dropped his party’s policy of a referendum on the constitution - which of course he could not do.   This was an act of unpardonable folly by the Libdems since there was never going to be a referendum anyway. It was a matter of simple arithmetic.  The SNP had only 47 out of 129 MSPs, so as long as the unionist parties held firm, the referendum bill was never going to get to the statute book.

  Salmond couldn’t dump the formal commitment to a referendum without being accused of betrayal, but a referndum was the last thing the leadership actually wanted at that moment anyway.   The Nationalist game plan has always been to show that they could run a competent government at Holyrood before popping the question about leaving the UK.  However, they did initially want a coalition and they wanted to talk.   The SNP were even minded to make a raft of key concessions to the Liberal Democrats including a new Constitutional Convention and a promise that the referendum-that-wasn’t-going-to-happen would include the Liberal Democrat option of federalism.  But it was not to be.

   The Liberal Democrat opposition to the principle of an independence referendum never made much intellectual sense.  The UK party has been calling for a referendum on Europe,  a referendum on constitutional change in England and a referendum on electoral reform.   But under a veto thought to have come from the UK party leader Sir Menzies Campbell, Tavish and his troops were not allowed even to go into the negotiating chamber unless the SNP ruled out its defining policy.    So, the Scottish Liberal Democrats were left out of office and out of power after eight years. They had turned down the opportunity to introduce their local income tax,  and to put their stamp on a whole range of issues of policies in their 2007 election manifesto from the climate change bill to the abolition of bridge tolls.  

  Meanwhile, Alex Salmond, with opportunistic genius, realised that he could make a virtue out of necessity and run a minority government. The rest is history.  The SNP minority administration was spectacularly successful, while the Scottish Liberal Democrats have been left wandering in the wilderness with the other lost tribe of Scottish politics, the Conservatives.  Losing office is like bereavement for some politicians, and the Scottish Liberal Democrats have been in mourning ever since.  The conference at the weekend was an attempt to lay the past to rest and find away back to the land of the living.  The leadership has signalled that, while they rule out a referendum before the 2011 Scottish elections, all bets are off after that. They will not require the SNP to drop its flagship policy before they sit down and talk after the  next Scottish election in 2011 - that’s if the SNP win, of course. 

    However, the Nationalists have done very well under minority, and might be a lot less keen on coalition-making than they were in 2007.   Which means that the terms for any 2011 coalition might be stiff.  The Liberal Democrats will have to agree actively to support a bill for a referendum, which means Alex Salmond will almost certainly get his ballot.  But does he really want one?  The great mystery of Scottish politics is why the SNP are so determined to hold a referendum on independence that they will almost certainly lose.  

  One of the constants of Scottish political opinion over the last quarter century is that, in opinion polls, only around a quarter to a third of Scots actually want to leave the United Kingdom.  The vast majority want ‘devolution max’ - a Scottish parliament, with more powers, within the UK.   In a three question referendum, there seems almost inconceivable that independence would prevail.  Just think: if you are offered, the status quo, a leap in the dark, or a better Holyrood, which would you choose?  

   So, why does Alex Salmond want a referendum that would rule out independence for a generation (he has said there would no recurrent ‘neverendum’). Some cynics say that the SNP doesn’t want independence any more and is quite happy getting rave reviews for running the devolved Scottish parliament.  This is plausible. But  in my many discussions over the years with SNP leaders I have never once had any of them nudge me in the ribs and say: “forget independence, we like this fine”.  Alex Salmond genuinely seems to want a referendum, even if it means that independence is off the agenda as a result. 

   I suppose the way to look at this is that a referendum is a game the SNP cannot lose.  If they win, fine - negotiations begin with Whitehall about leaving the UK.  But if they don’t win, the chances are that they will still be in a parliament which  acquires tax raising powers.  So long as the SNP keep winning elections to the Scottish parliament, and it looks as if they will win next time, the nationalist project is being fulfilled.  Scots are being given confidence in their ability to run their own affairs, and the UK is getting used to thinking of Scotland as a separate country.  Independence is a long game- they’ve waited three hundred years, so what’s another generation or two.  

   The task for Labour will be to prevent them remaining in charge of the Scottish parliament, which is why, Labour will become very much more nationalistic after the next general election - assuming they lose office in Westminster - and might themselves decide to opt for a referendum on their own terms to pre-empt the Nats.    With the SLD moving in that direction also, you can begin to see why this weekend’s non-event in Dunfermline may have altered the course of Scottish history. 

Wednesday, November 04, 2009

Nepotism -keep it in the family.

 “Bob’s your uncle” always struck me as a curious catch phrase. Why should Bob being my uncle be of any benefit to me?   Well, phrase is said to date from the 1880s when, the Prime Minister, Robert Cecil, appointed his nephew, Arthur Balfour, to the prestigious and lucrative post as Chief Secretary for Ireland. Bob was indeed his uncle, and found him a nice little earner. It is all about nepotism: abusing a position of public trust to promote the interests of family members.  
   The British civil service managed to stamp out nepotism 150 years ago.  Now, finally, the House of Commons may be about to follow suit.  On Wednesday, the report into MPs expenses by Sir Christopher Kelly called time, finally, on the cosy practice of MPs employing their wives, children, lovers as secretaries and researchers.This has provoked a pre-emptive wave of righteous indignation from MPs’s who say this is as an unfair assault on the hard working women who tirelessly service our  legislators. 
   I’m sure that many wives do a very good job, but that doesn’t alter the fact that there is a massive conflict of interest here. It’s  not just the obvious abuses such as the Tory MP Derek Conway paying his sons as parliamentary researchers when they were actually away at university.   How can an MP be expected to assess whether public money is being spent wisely when it’s being paid to his or her spouse and other members of his close family?  Nearly a third of MPs employ their wives or children.   The Rev Ian Paisley employs two daughters and a son according to the Register of Member Financial Interests.  The Tory MP for Tewkesbury, Laurence Robertson records that he employs both his wife Susan Robertson “from whom I am separated”, as his secretary, and also employs his “new partner”, Anne Marie Adams. That must make office life interesting.   The practice has been abused and it simply has to stop.  MPs cannot be allowed to continue enriching themselves and their families in this way. 

   There were predicable howls of anguish too  when it emerged that MPs will no longer be able to claim mortgage interest for second homes.   In future they will have to rent modestly priced accommodation when they’re in London -  and only if their constituencies are more than sixty minutes from parliament.  It might seem astonishing that MPs were ever allowed to claim for second homes in London when they already lived in London, but they did. And they didn’t even have to live in them.  Tony McNulty, the Labour Minister, gave a grudging apology to the house last week for claiming expenses on a “second home” that was occupied full time by his parents and was only a few miles from his real family home.  This was a calculated abuse of the system and should surely have led to his being thrown out of parliament. 

   McNulty insisted that he was ‘only following the rules’ and that it wasn’t his fault.  But this is a feeble defence.  The rules are laid out  in the parliamentary “Green Book” which sets out MPs terms of employment.  It says MPs can only claim expenses that are “wholly, exclusively and necessarily”  for “the purpose of performing their parliamentary duties”.  It says nothing about buying houses for your parents.  Nor does it say you can use the second homes allowance to play the property market as so many MPs have done, evading capital gains tax. 

    The former Home Secretary, Jacqui Smith, was challenged on the BBC’s Question Time last week to pay back the £100,000 she wrongly claimed by designating a room in her sister’s house in London as her “main residence” and her real family home in West Midlands as her “second home”.  Forget the porn films her husband claimed on her expenses, what about the public money she misappropriated?  Ms Smith accepted that she had been “disgraced” for what she did, but curiosly her contrition stopped short of actually paying back the money she accepts she should never have received.  Tony McNulty says that he “doesn’t have the money” to pay back the expenses, despite him and his wife erarning £300,000 and living in a £900,000 home.

    The Tory MP Roger Gale said that Sir Christopher Kelly  “doesn’t live in the real world”.  I’m sorry, but it is MPs who are clearly on another planet.   In the ‘real world’ of Her Majesty’s Revenue and Customs, tax evasion is a criminal offence. If anyone other than MPs had been caught claiming expenses that they were not entitled to, they would be have been prosecuted, even if their employers had agreed to pay.   Perhaps it could come to that.  The Plaid MP Elfyn Llwyd, who sits on the parliamentary standards committee, said last week that “three of four MPs..will end up in jail”.  If they go down, might others follow? 

    After his not-my-fault-but-sorry-anyway speech, McNulty said it was “time to move on” as if this were all a tiresome and insignificant affair blown out of proportion by the press.   People say that hacks like me should be concentrating on the real issues - like housing, unemployment, the postal strike and not the pecadillos of MPs.  But there is a connection.  We are now seeing the mechanism whereby our elected representatives - who rarely go into politics for personal gain -  were compromised and corrupted by a system of petty corruption.  They lost touch with the “real world” they talk of to such an extent that they thought fiddling expenses, evading capital gains tax and employing their relatives is perfectly normal.  No wonder they can’t understand why a postie earning £14,000 might go on strike.  

   MPs have allowed house prices to inflate to such a ludicrous degree that a first time buyer in London now requires a salary of £93,000 to get an average home.  The average wage in London is £26,000.  If MPs had had to buy their own London homes out of their £65,000 salary, instead of having them bought for them, would they have allowed this to happen?  Well, we’ll see, because after the next election, after the duck house generation of MPs have stood down, there will be a new wave of MPs coming into politics who have not been speculating on the London property market.  I suspect the housing crisis may suddenly rocket to the top of the political priority list.