Dear All
The Scottish National Party is playing
ordinary working class Scots for mugs in this independence referendum.
One of the ideas that actually has merit is
a Oil Fund, however, the SNP haven’t properly planned for independence and as
such they are trying to shore up a crumbling system.
There is no Government and local government
reform as such the SNP although wanting an Oil Fund as part of their ‘milk and
honey’ and everything will be nirvana won’t be able to have a meaningful fund
for decades.
That is right….. decades!
On top of that, the Oil Fund needs interest
rates to rise so that the money earns and pays its way. No interest rates rise
then the Oil Fund is actually not particularly viable. Unless the SNP plan to
use the fund to start State controlled city banks giving out loans!
As usual Alex Salmond and Scotland’s
unpopular Deputy First Minister Nicola Sturgeon have gotten ahead of themselves,
with all spin and no substance.
So, with money in short supply, cuts to
budgets and services set to increase, the Scottish Government say they plan to
invest "modest sums" of oil cash if Scots vote Yes in next year's
referendum.
The idea of a long-term national savings
fund isn’t new; Norway has such a fund for decades and has benefited from it.
But Scotland isn’t Norway.
And the tax system is radically different
and higher.
Finance Secretary John Swinney is backing a
new report saying an independent Scotland should set up an oil fund even if the
country's finances were in the red; the document is produced by a little group
set up by Scottish Government.
When Swinney talks about the country’s
finances being in the red, he is also talking about austerity, not what we have
at present, but the Greek style, elderly people who are so poor eating out of
bins.
Sound like nirvana to you?
Scottish Government sources suggested
around £200 million would be paid into the long-term investment fund in its
first year.
We should also remember that the SNP also
plan to take a billion pounds out of the Scottish economy for overseas aid.
Add in the massive spending pledges and the
whole thing looks like utter nonsense, the first thing would be to secure the
country’s stability, and at some point Alex Salmond and Nicola Sturgeon need to
address the financial black hole that they keep avoiding talking about.
In the region of £7 billion, still think
that Scots are heading towards milk and honey, still think nirvana is round the
corner?
It isn’t!
Hell on earth might be round the corner and
there is a real sense that Salmond’s plan is independence at any price no
matter what damage he causes and whose lives he wrecks in the process.
The Oil Fund move was criticised by
Alistair Darling, of Better Together pro-UK campaign, who stated the plan to
borrow and save at the same time flew in the face of common sense.
Scotland needs to reform public services
both government and local government, without such a move, the whole structure
is like an old wooden house, a few hard kicks and the whole thing could
collapse.
The SNP set up the Government's Fiscal
Commission Working Group “expert” panel, who are producing the narrative that
the SNP want to sell, they aren’t impartial and where is the analysis of risk?
Swinney said:
"Their report recommends that a
savings fund should be established immediately following independence. This
would allow an independent Scotland to consider investing modest sums into a
savings fund without an offsetting change to public spending or taxation."
This isn’t credible, tax would have to rise
to accommodate Nordic welfare, then there are the other departments which would
need to be set up, and they must have a reserve to operate on for daily spend
and additional set up costs.
Think millions, big double digit millions.
For the Scottish air force, one fast jet
comes in at somewhere in the region of £120 million, we need about 30 of them,
minimum, plus support.
So far the SNP have been promising everyone
anything they want, £32 billion so far, and a lot of that un-costed.
Scottish officials say that the Norwegians
made a £220m initial payment to launch its oil fund in 1990.
So, with that as a benchmark they came up
with the number £200 million, is it just me or does this look and smell fishy?
The Fiscal Commission Working Group also
wants two oil funds to be running at the same time, with a portion of North Sea
tax revenues in a "stabilisation fund" which is designed to smooth
out big year-to-year differences.
The other fund is the piggy bank, the
savings fund which will be earmarked for major projects.
Where’s the reserve?
Investing oil wealth in a long-term fund
has been a key SNP policy for many years because they ran with a slogan called
its Scotland’s oil, or to be more accurate it is the oil companies Oil and the
SNP want the tax that it generates.
Oil production can vary, the price is also
another factor which can be influenced, therefore you can’t chuck all your eggs
in one basket, that isn’t the way to plan government spending, in a bad year,
the entire fund could be spent on daily spend.
And without a mechanism for generating
interest, the fund as it sits loses money.
Plan for that?
SNP plan to raise interest rates?
What if the Bank of England refuses to
raise interest rates if there was a currency union?
The SNP should have planned for a separate
Scottish currency, the piece meal approach of their shambles of an independence
campaign can be picked apart, because they don’t know, they are not pro active,
and have done no work.
Earlier this year First Minister Alex
Salmond said Scotland was on the cusp of a second oil boom and also Salmond
said that there was going to be a boom on renewable.
Sadly, where’s the evidence?
Well, it’s all in his mind, he thinks it,
he says it and in his world it all happens, much like he wanted a debate with David
Cameron and the Prime Minister was just going to agree because Salmond says so.
In the real world out with Salmond’s
control, the reality is stark, and hope and aspiration doesn’t count, cold hard
cash and ability matters.
A country cannot be won on hype, smoke and
mirrors, on guess work, and relying on other people to carry the load for you.
A recent UK Treasury study says an
independent Scotland would be able to build up a fund worth £32bn, at today's
prices, by 2040/41.
But in order to do so, all oil revenues have
to be saved, that means no money would be available to assist current spending,
which rather leaves the SNP up shit creek without a paddle.
That is why I blogged on the reform of
government have done so for years….. years!
On the Better Together website, Alistair Darling
said an oil fund was unaffordable without "big tax rises or big
cuts".
He is right, the current setup doesn’t bode
well in the nirvana tale of how wonderful everything will be, you will be
paying more tax; you will see bills rise and possibly food prices, as everyone
jumps on the bandwagon to skin Scots.
The SNP should have gone nuclear on power
and missed the boat due to stupidity as per the norm of the woolly hat tree
hugging mentality set in.
Danny Alexander, the Chief Secretary to the
Treasury, said:
"The Scottish Government appears to
want to put one half of oil revenues in a short-term stabilisation fund and the
other half in a long term fund for future generations, upon independence it
would need the whole lot just to keep the country running."
The short fall has to be dealt with, you
can’t run a debt and get away with it long term, look at Greece, it is chaos
there, an entire country torn apart.
And the last thing you want is the kind of ‘help’
that the Greeks got; they need to leave the Euro and the sooner the better for
the sake of their people.
Currency union with England leaves Scotland
out on a limb, as much as things are bad now with a union, they can get a damn
sight worse without proper planning.
The tragic figure that is Blair Jenkins,
head of the pro-independence Yes Scotland campaign welcomed the Oil Fund idea,
well he would, it’s part of the ‘nirvana project’, his part of the ‘positive
message’ was to blame England for the failure to create an oil fund in the
1980s, when revenues were at their height.
In case he missed it, the money was used to
prop up daily spend, he probably never noticed that when he was parked at the
BBC on a massive salary.
Oil Fund good idea, application suspect,
and the total lack of planning makes such a fund unworkable in the short term
and suspect in the long term.
It is just more of the same fro Alex
Salmond and Scotland’s unpopular Deputy First Minister Nicola Sturgeon, say
anything and promising everything for the vote.
One the casualties of this Scottish independence
campaign will be John Swinney’s reputation as Finance Minister, he is having to
look upbeat selling this rubbish which he must know is bogus claptrap.
Yours sincerely
George Laird
The Campaign for Human Rights at Glasgow
University
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