Archive for category Economy

Let’s make a low carbon Scotland a high priority

A guest post today from Dr Sam Gardner, Head of Policy at WWF Scotland: thanks Sam!

5037469308_0718473d8d_bThe UK Committee on Climate Change’s most recent progress report under the Scottish Climate Change Act offers a useful assessment of where we are on our journey towards a low carbon Scotland. It highlights good progress in power generation and an increase in insulation rates, while at the same time reminding us this goal remains a long way off.  Yes, as WWF has documented, there has been excellent progress on renewable electricity but many other sectors need the same level of commitment and focus if the full benefits of a low carbon future are to be realised – across the transport, housing, land-use and waste sectors.

As the report recommends a renewed focus across the Scottish economy is required if our position as a global climate leader is to stand up to scrutiny and the benefits of a low carbon future are to be secured for Scotland. The need for action grows more compelling all the time. This week, the World Meteorological Organisation in their State of the Climate Report, stated that 13 of the 14 warmest years on record occurred this century. In a few days the IPCC will spell out the ever more worrying impacts of a changing climate.

So what is there more to do? The energy efficiency of Scotland’s homes continues to demand attention with the CCC making clear that “substantial additional policy effort by the Scottish Government will be necessary if it is to achieve its insulation and fuel poverty targets”.  Scotland’s homes are exposed to unpredictable weather which means emissions can rise by 15% one year and fall by 21% the next.  If we are to protect our homes from cold snaps and rising gas prices then we need to increase the loft insulation in over 30% of our homes, install cavity wall insulation in 600 000 homes and tackle the many homes needing solid wall insulation, all before 2020.  A transformation of this scale creates jobs (approx. 10 000 according to research for WWF), saves households money and helps tackle the scourge of fuel poverty.  Key to accelerating this programme will be the introduction of regulations for minimum energy efficiency standards and acting on the CCC’s advice that an increase in funding by the Scottish Government is needed given the cuts to the UK ECO programme.

Its no great surprise that the transport sector is another area flagged by the CCC where ‘more needs to be done’.  Transport emissions are the same now as they were in 1990 and there is little prospect of that improving given Scottish Transport’s own predictions that emissions are set to increase.  The CCC repeats its call from previous reports to get behind demand management transport measures and develop and fund a continuation of the Smarter Choices Smarter Places programme that was trialled in seven towns and cities across Scotland between 09 and 2012.  If we want to enjoy the benefits of improved air quality, safer streets and lower emissions we can’t afford to wait until 2018 when the Scottish Government’s climate action plan says the nationwide rollout will commence.

The Scottish Government’s recently published draft heat generation policy has been given renewed importance by the UK CCC’s conclusion that ‘even if all the projects in the pipeline went ahead and were operational by 2020’ we would still miss our heat target.  WWF’s recent renewable heat report outlines steps to be taken to accelerate both district heating and support the uptake of individual property heating technologies like air source heat pumps.

Worryingly, the CCC poses two options for meeting the targets in future: either identify additional effort to meet them, or amend, – or essentially, lower, the targets. This is suggested because changes in the greenhouse gas emissions inventory – the baseline – now means that we effectively have a 47% target rather than a 42% target to meet by 2020.  There are a host of reasons for not amending the targets, not least the signal it would send to other nations aspiring to legislate on climate change.  Having rightly attracted the attention of the world for our Climate Act, it would send a very poor message if we were to choose to lower the targets instead of identifying additional effort.  With so many policy levers still to be exercised, amending targets would simply divert attention from the efforts to deliver better housing, better transport and cleaner energy. For all the progress that Scotland has made so far, now is not the time to take the foot off the accelerator on our low carbon journey. Let’s not start to undermine the hard fought long term stability that the Act provides.

For the love of a safer, cleaner, future for all, lets throw our weight behind delivering a low carbon future and ensure we fulfil the promise Scotland made when it passed the Climate Change Act five years ago.

What’s the weather like in Montenegro?

MONTENEGROThe latest round of “positive campaigning” from the Westminster parties centres again on the currency. It’s clear they’ve decided it’s the SNP’s weak spot, and they want to hammer on it. So now all three of Westminster’s parties of government have declared (or will declare, so the BBC have been briefed) that an independent Scotland would be barred from the SNP’s preferred approach, a formal currency union with the rUK.

On one level this is a trap the SNP have laid for themselves. Their policy has essentially evolved like this: “Yey Euro! No, wait, the Euro’s collapsing. Shit. What shall we do? Well, we could have our own currency. But that sounds scary. What’s the only other option? Keep the pound. Phew. Sounds safe.”

A better approach would clearly have been to say “well, on day one Scotland still continue to use the pound, as is normal when countries achieve independence, and it will be for the Scottish people to decide whether they prefer to move towards an independent currency, either as an end point or as a step towards the Euro, or to seek an ongoing currency union with rUK”. Not least because then the post-2016 Scottish Government would have a specific democratic mandate for a sterling zone if that was indeed the outcome of the election. Fear of uncertainty is why this is off the table. But if you want to know what happens after a future election, you’d better get used to uncertainty for obvious reasons.

Given that formal currency union would require Westminster’s assent, though, today’s stramash was entirely predictable (Jeff saw something similar coming in November 2011, although I disagree with some of his conclusions). Perhaps the SNP genuinely like the sight of Tory/Labour/Lib Dem bullying on this issue. It certainly looks ugly, but I can see Osborne’s logic: like it or not, this announcement does take the SNP’s preferred option off the table. They can’t keep saying “once we’ve had a Yes vote Westminster will have to take Scotland seriously”. Well, they can keep saying it if they wish, but it sounds increasingly ridiculous and practically as petulant as the Westminster parties’ position. Strategically, the Tories are correct to assume that this mess must reduce the chance of a Yes vote, and of course it’s not just them. With all three of the biggest parties at Westminster now publicly opposed to currency union, the SNP are effectively relying on persuading one or more of them changing their mind. Not a solid basis for the last seven months of a referendum campaign.

The reality is that on 24 March 2016, the SNP’s proposed independence day, we absolutely will be using sterling in Scotland’s shops. Our bank accounts will still be denominated in sterling. The pre-dissolution SNP Government has no mandate to change that: it’d be utterly undemocratic to do so prior to the election which kicks off on that day. And then on 7 May 2016, when Scotland wakes up with its first independent government, we’ll still be using sterling no matter what. That government will have had a policy (or policies, if it’s a coalition) on the currency, but the starting point will be the pound in your pocket.

And the basis for the pound in your pocket won’t be a currency union. It can’t be. Even if Westminster were entirely relaxed about it, the SNP don’t have a mandate to establish a currency union in the September 2014-March 2016 interregnum and to tie future Scottish Governments’ hands. We’ll be using the pound like Montenegro uses the Euro, or (as Jeff pointed out) like Cambodia uses the dollar. We won’t have a seat on the Bank of England’s (!) Monetary Policy Committee. Scottish budgets won’t have to go to Westminster for oversight, or vice versa, as formal currency union would require. Nothing will have changed.

At that point, if that new independent Scottish Government has been elected on a platform of pursuing currency union, they can get on and pursue it and hope that the post-2015 rUK Government would support it. The only easy route to co-operation on this would be if Labour somehow managed to win both elections while losing the referendum. But if currency union is sought and rUK Ministers stick to today’s line, there would only be two options for those future Scottish Ministers: the Montenegro way, or the Montenegro way moving towards our own currency like a normal independent state. That way we could manage our affairs without our economy still being skewed towards London and without our fiscal policy still being skewed towards austerity. An independent currency seems almost inevitable, especially in the longer term. Or it would do if the Yes campaign wasn’t bogged down by the SNP’s short-sightedness on this issue. They need to think again or they risk jeopardising the recent progress that’s been made towards a Yes vote.

Industry baron in “against independence” shock

The No campaign are most excited that an American corporate boss has come out against independence: Mr Bob Dudley, of BP. So here are his arguments:

  • Great Britain is great and should stay together“. This is at best the most spurious form of British nationalism, at worst a kind of empty nominative determinism. Let’s file this with “the dictionary definition of marriage is one man and one woman” and move on.
  • There’s a “question mark” over which currency Scotland will adopt. Yes, absolutely, there is. If Yes wins in September, it will be up to the parties to propose their preferred options for Scotland’s currency future, and then for the people to decide. Deciding now would be undemocratic. Sorry if that’s inconvenient for your accountants, but oil will continue to be denominated in dollars, so in practice this would affect BP less than most other businesses.
  • There are “big uncertainties” for the firm (non-specific). Sure. All those whose current position is feather-bedded and backed by government are likely to have concerns about greater democracy. This counts as classic FUD, and therefore very appealing to Project FUD.
  • All businesses have a concern..” Well, opinion is divided. Some business people are more concerned about independence, while others are more concerned about the status quo. As a business person, even one with a direct commercial interest in Scotland’s over-governance, my main concerns are about the status quo.
  • It would create extra costs for our business..” This is the closest thing to reasonable on his list. In fact, that’s probably true, but the wider financial pros and cons are in part also subject to democracy. If the SNP win the first election after a Yes vote, they’ll presumably try to cut taxes on big business. If they need Green votes, they’ll find that harder. Personally I hope independence would reduce BP’s revenue, too, as an independent Scotland seems just a touch more likely to take climate change seriously and to restrict drilling in sensitive areas. Just a touch, given the way the other four parties at Holyrood voted on a deepwater moratorium. But this is the firm that delivered the largest marine oil spill in history, and even the most pro-oil of the other parties presumably don’t want to see Scotland’s coastline go the way of the Gulf of Mexico. Let’s pause for a minute on that thought.

deepwater

In any case, what is he suggesting BP would do if we win? Hand their lucrative North Sea fields back to the Scottish Government? Just sit on them and hope for reunification? It’s the oil equivalent of Jim Davidson and the like, odious right-wingers who threaten to leave Britain if Labour wins an election, and just as likely to happen. Regrettably.

As it happens, Mr Dudley also came out against a 50p tax rate for the richest section of society today. It’s no coincidence, either. His interests, both personal and commercial, are not aligned with society’s best interests, especially those who Westminster cares little about: and both the positions he set out today illustrate that perfectly.

pic credit

In for a penny, in for a groat

GroatThe Governor of the Bank of England has just sunk plans for Scottish independence today, we’re told. The flaws with the SNP’s currency union mean it’s over all bar the voting, apparently.

Except that’s a lot of nonsense for one key reason. Scotland’s medium and long-term currency future won’t be up to the SNP. Their schedule, which I was previously more sceptical about, gives us a bit over two years from a Yes vote to independence day, which coincides with dissolution of Holyrood, which means that post-independence decisions will be made by the people in the most interesting election Scotland will have ever seen.

I’m also very relaxed about an initial period where we use the pound prior to any change, either to our own currency, my preferred option, or hypothetically to the Euro, which I doubt any of Scotland’s five Parliamentary parties will offer in May 2016. But imagine Labour win at Westminster in 2015, which still has to be the most likely option. And then perhaps a separate Scottish Labour would get their act together and lead Scotland’s first independence administration. It’s not impossible: just think how the British electorate chose them to “win the peace” in 1945. Would those two administrations not work together while respecting the Scottish people’s desire for independence?

In fact, the hostility to currency union from Westminster and Threadneedle Street would then no longer have much of a real purpose, if one accepts that it’s primarily to scare Scots into voting No. Maybe the SNP would also accept over time that currency union would be too restrictive, and offer a transition to our own currency (see the Republic of Ireland’s experience for how slowly that might happen). Who knows? But the decision will, if we win, be made by the Scottish people on the basis of the manifestos offered then: each option has pros and cons, but a democratic choice is the right way for it to be made.

Our Friends In The North: The Nordic dream without the navel gazing

It was with trepidation that I sat down to watch Our Friends in the North, BBC Scotland’s attempt to address the Nordicism that has crept into the independence referendum. It is an important part of the debate and the closest Scotland can get to imagining an alternate reality. Alex Salmond doesn’t really seem to get the Nordic countries in anything other than economistic terms, but as a former oil economist maybe that is to be expected. What Our Friends in the North and its host Alan Little did so well was demand answers to the questions created by the rhetoric. It is very easy to project your dreams onto something you don’t know much about, and is easy to imagine the First Minister sitting at home with a big Norwegian flag on the wall like a teenage boy staring wide eyed at a poster of Che Guevara he’s bought off the internet.

The programme asked a fundamental question: Is the Nordic economic model one Scotland can follow? There was some mention of shared heritage and attempts to problematise Scotland’s position bridging the gap between the British and the Northern, but it was largely an economistic view of events.

The excellent Alan Little began by popping off to Finland to find out about Nokia and childcare. There was an admirable attempt to situate Finland as a post-colonial country like Scotland might become. There was discussion of the economic crash of the early 90s due to dependence on the Soviet Union and a mention of how Scandinavian economies are not that diverse, but parallels could be made with the collapse of the largely London-based UK economy after the last financial crisis – in Finland at least the government had the tools to come up with a policy tailored to the country.

The childcare aspect was a detour into social policies, and these are perhaps the hardest to replicate. It also began a theme for the rest of the show that was never explicitly articulated. Many of the people encountered or interviewed were professional women enjoying high levels of access to both professions and childcare. The integration of educated and working women is one of the things that truly divides Scotland from its easterly neighbours, but as gay marriage so happily proved, that kind of equality is about mindset as much as money. You want it and then you fund it, rather than deciding you have the spare cash for such luxuries.

Next up was Sweden, and Alan Little went to speak to The Spectator’s Fraser Nelson. In London. Nelson is a man who knows very little about Sweden and not an awful lot more about contemporary Scotland. He gave the Cameronite line on the country, painting  the Swedish New Moderates and their liberal coalition partners as guardians of a progressive society. He claimed improved economic performance and employment, ignoring the fact that since the Moderates have been in power there have been serious tax cuts and in increase in temporary, lower paid jobs. Youth unemployment has increased and educational reforms, including the Free School concept, have created myriad problems. Stockholm is also suffering from an acute housing shortage due to the refusal of the Moderates to build accessible housing rather than suburban developments.

Alan popped back to Scandinavia to interview Lars Trädgårdh, a Swedish academic who has spent a lot of time in America and become a bit of a talking head for this kind of thing. Lars took Alan up onto the roof of the Higher Education where he works and pointed at the headquarters of the tax authorities. The problem was it isn’t the headquarters of the tax authorities and has not been for quite some time. I know because I used to live in it, but seeing as the tallest building being the tax headquarters is an established narrative trope in any guide to Sweden it seems a shame to get caught up on it.

 There was an assertion that Sweden doesn’t have a generous welfare state, which was a bit of a lie. It has an extremely generous welfare state, but it is built on a more expansive understanding of welfare than state unemployment benefit. This includes paying people to not work when they have young children, wage-linked unemployment funds and more robust attempts at education and retraining than that provided by either the current or previous Westminster governments, or by Britain historically for that matter. Alan Little’s assertion that “This isn’t the Sweden many on the left imagine” is true in part, but it almost seemed like it was too good a discovery to not make a point of. The truth of the matter is that many of the tenets of Scandinavian welfarism find no points of reference in British models or parlance. It isn’t Robin McAlpine’s William Morris inspired consensual welfarism, but neither is it Fraser Nelson’s utopia of hard work and sticks over carrots.

Last up was Norway, though Denmark wasn’t allowed a mention for some reason. Norway is the most prosperous of the Nordic countries, and as Alan strolled around Oslo’s redeveloped waterfront of speedboats and yuppie flats straight into the Nobel Peace Centre everything looked rosy. Norway is undeniably a great place to live, and definitely a much better bet than contemporary Britain by all kinds of measures. He visited a former industrial area reborn through a private business school. At an employment fair members of Norway’s so-called ‘dessert generation’ (because they are young enough to have only turned up for the sweetest part of the country’s journey from poor to rich and are known for wanting to have their cake and eat it) flocked to tables to become investment bankers or recruitment agents. The conclusion though was fairly unambiguous – even a tiny public oil fund would do wonders for Scotland’s economic and social rebirth.

There then came a very important question: why couldn’t Scotland pursue this Nordic model with further devolution? It was a question Little did not try to answer, but looking back over what was said some of the conclusions were self-evident. Could devolution make a Scottish oil fund, help protect Scotland from the economic collapse of a larger neighbour or allow it to radically reform its welfare and monetary policy? Probably not.

The best contribution though came in the show’s final lines. Alan Little is in the privileged position of speaking as a Scot who has gone not just to London but all over the world. He understands the context of change and political evolution, and his final question was the right one to ask. Should we not see the referendum in its broader, European context? Is this cutting Scotland off, or is it a repositioning at the nexus between two sets of neighbours?

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