Feel the Fear

Frightened yet? You should be. They’re all piling in now – assertion upon allegation, horror upon hazard, claim upon calumny – from Brussels and London and even from the heart of our democracy at Holyrood where Danny Alexander opened his maths jotter and pointed to the page where the teacher had written Mortgages UP…

(This appeared to be a lick-the-pencil-tip exercise where you add suggestion to supposition – remember to carry the one – add it all up and add a nought…devised by a bank no-one’s heard of. Happily, it means we will all pay a nice round £5000 more for our mortgage, said Danny proudly, winking at the reporters – there’s your headline, boys. )

The heat is being turned up, if you think Hermann von Rompuy qualifies as a heat source. Even an unrelated decision by a bank, which used to be Scottish, to base a division in London, is interpreted by the Telegraph propagandists as a snub to independence. Who’d want to base a bank in a small, independent, out-of-the-way country with funny habits…like Switzerland…or Monaco…or Hong Kong…Singapore…or Malta…or the Caymen and Bermuda…or…I give up. No, wait. I count 31 non-indigenous banks operating in Ireland – remember the basket-case economy that Jim Murphy laughed at in the Commons? GDP per head 2012: Ireland – Euros 35,700…UK- Euros 30,300 (source countryeconomy.com).  I make that one of Danny’s nice round 5000 numbers that makes a good headline. So here is one I made earlier.

IRISH €5000 A YEAR RICHER THAN BRITS AFTER SIX YEARS OF ECONOMIC FAILURE

It rather depends who and what you want to believe, does it not? Danny’s Treasury-written composition paper was based on how lenders would treat a country that failed to pay its debts. (Flaw alert incoming). Lenders – our altruistic, morally-minded “markets” are gentlemen to a fault, apart from the ones who are ladies and are regularly treated like Page Three slappers in City firms. Therefore they would view anyone with a bad credit history as a bad risk. But what if you didn’t default? What if you had no debts in the first place and someone else had publicly declared their intention to pay off those debts which they, not you, had incurred and to do so in all circumstances? If a lender sees a profit opportunity with low risk, sees a gleaming and industry-approved asset backing up the loan and a borrower with a low annual deficit, a net exporter, does he a) decide it isn’t fair that the borrower’s offer to help with someone else’s debt had been spurned and he should be punished for his audacity by being sent packing or b) give him the cash at a reasonable rate and watch how he performs?

If, on the other hand, another borrower appears with debt more than 100 per cent higher than income putting it 13^th from the bottom of the world league table with the debt rising at £7000 a second, whose borrowing capacity is stretched to breaking point and buying in more products than it sells, shouldn’t it be liable for an interest risk surcharge, if it deserves any loan at all?

And, if you’re minded to believe the European Commission, (antidote pills are available), their estimate is that for the UK to come out of the EU, the cost would be £3000 each, proving that when it comes to scaring people, Westminster may have met its match.

But don’t think this kind of stuff doesn’t have an effect. In the Guardian today Martin  Kettle  http://www.theguardian.com/commentisfree/2014/feb/19/alex-salmond-acting-spoilt-children turns what is a reasonable swipe at the SNP’s failure to quell doubts about currency into a rant ranging over the EU and pensions. His starting point has validity because, whatever the misgivings, a convincing alternative must find its way into the minds of the voters or a water-line leak will expand and lead to a flood. SNP protestations about synthetic politics from the Unionists are genuine and, as soon as an alternative emerges, will be revealed for what they are – a campaign gambit devoid of honesty. But there is no disguising the need for something definitive, otherwise the gambit wins. Kettle stretches the point beyond the reasonable, or even the logical, but the fact that he has given up on what little respect he had for the independence tactics, is a straw in the wind. He repeats the McTernan line about the SNP response. “It felt like a reputation destroying performance. For if anyone is guilty of bluff, bluster and bullying with which Salmond loudly charged his much better argued critics, it is Salmond himself. I’d be pretty confident that voters would see it that way too.”

Salmond can’t afford to let this caricature take hold because the trick of politics isn’t really what you say, it’s what people want to believe. If they’re minded to back independence, they will listen sympathetically to the case and if you tell them you have been obliged to seek an alternative because your opponent has acted unreasonably, they will understand. Don’t Knows who are weighing it up will appreciate the dilemma and perceive a pragmatic response – and will be much less sympathetic to a second round of attack from the opponents. In the course of the change, Salmond is seen as reasonable and accommodating in the face of intransigence and if he pulls off a clever trick with a neat solution, such as using the pound regardless, he wins again. But these decisions must be made within days, if not hours. The idea that there is no alternative takes hold quickly and an eventual reply looks grudging.

(This is where I diverge from Kettle whose lack of detailed understanding is betrayed by his unquestioning acceptance of the Barroso (latest) intervention. There simply are no independent observers who take this seriously and a journalist can’t complain when the SNP don’t either. Barrosos’s assertions are so far off the wall there is only one answer which is that he is taking us and the EU for fools. The same goes for Kettle’s belief that Gordon Brown has raised important questions on pensions. There IS clarity on pensions in the White Paper but there are remaining questions over the EU requirement on funding cross-border schemes but this is exactly where the civil service comes in – to engineer solutions, perhaps by negotiating a 10-year period over which full funding can be achieved. As this was raised initially by the Chartered Institute of Accountants, you’d think they would propose an answer – isn’t that what we pay them for? I’m afraid Kettle can’t get away with blaming the SNP for going for the man not the ball in the case of Brown. As I said yesterday he is responsible for destroying the pension value for millions of people, despite being warned of the consequences and if you don’t have a final salary scheme today, blame Gordon. Whatever the arguments over pensions, Brown has brass neck pretending to have a solution. Kettle may respect Brown, but he is in a minority).

Kettle uses a phrase that made me gape wide-eyed at the ipad. “I know a serious argument when I hear one, and Osborne and the others have been making serious arguments in the past few days. It is simply mischievous to pretend that they are not dealing with major issues which, if mishandled, could be seriously destructive to ordinary lives, communities and standards of living. Yet, faced with genuine intellectual and political challenges on big subjects, Salmond and his colleagues act like children who scream as loudly as possible in order to avoid listening to a message they do not want to hear.”

Destructive to ordinary lives? I was listening to the news on Radio Four at the time. Here are two stories run one after the other. One: “An increasing number of under-18s with mental health problems in England are being treated on adult psychiatric wards, it has emerged. And many children are having to travel hundreds of miles across the country to receive hospital treatment. Treating young people in such units should happen only in exceptional circumstances. The Department of Health had promised this would stop by 2010….‘Sometimes we have to make 50 to 100 phone calls around the country looking for a bed. They [young people] shouldn’t be shunted around into inappropriate facilities, however much the staff there try to help them,’ said Dr McClure. ‘It may be the first time they’ve had a breakdown. They need to stay in touch with the people they know and love, and if they’re having to move 200 or 300 miles, it’s very difficult for the family to stay in touch.’ He said funding for mental health services had been cut, particularly for child and adolescent services in the community.”

A mother told of having her daughter dragged out of her arms and hearing her screaming out of a window: “Mummy, don’t leave me…”

Two: “Forty-three Christian leaders, including 27 Anglican bishops, have signed a letter urging David Cameron to ensure people get enough to eat. They argue that cutbacks and failures in the benefits system are forcing thousands of people to use food banks. The End Hunger Fast campaign called the situation “truly shocking”. It wants a national day of fasting on 4 April. But the government said it wanted to help people “stand on their own two feet” by cutting welfare dependency.

The letter comes after Archbishop of Westminster Vincent Nichols, the leader of the Roman Catholic Church in England and Wales, warned last weekend that welfare reform was leaving people in “destitution” and labelled it a “disgrace”.

Those two routine items on the UK national news are what I call destructive to ordinary lives and if Martin Kettle imagines an independent Scottish society would permit those offences when money was available, he isn’t keeping up. It is exactly that kind of brutish, despicable, community-shredding blindness that we want to escape. People across Britain are recognizing that they don’t want to live in a society that has lost its heart and only counts money not blessings. What is the Guardian’s solution? Vote Labour? Back Ed Balls? Or is Kettle the one  putting his fingers in his ears and humming?

Our currency will be sorted out, and the debt, as will the EU, and we will keep our pensions. Britain and Scotland will never prosper by listening to Brown, Balls and Osborne. The truth is that, no matter how hard it is for southern commentators to take on board, Britain is finished. It may run on in London and the grab-it-all south east but even there insane house prices are killing communities, and everywhere else there is a powerful sense of abandonment and imprisonment in a Britain we don’t remember ever voting for. It may be at the other end of Britain but it is difficult not to feel real pain for the flooded people in the south west whose homes are ruined, who face uncertain futures and limits to insurance and whose flood defences were never rebuilt as they were promised. Three hundred of them were meant to be replaced but weren’t. This too is a symptom of a top-down, cynical political system to whom people are customers to be lured, hoodwinked and fleeced. This is from an item in Social Europe by Simon Wren-Lewis: “Cuts in flood prevention are a small part of austerity, but there are close parallels with the macroeconomic case… Just as some in government never believed in all this climate change stuff, others thought that this Keynesian idea that austerity might be a bad idea…was fanciful. (Some, like George Osborne, appear to have thought both.) When these mistakes became evident it was, with the floods, the Environment Agency’s fault, and also the last government, while with the recession it was all down to those Goddam Europeans, and of course the last government. Yet whereas the links between austerity and prolonged recessions may appear mysterious to many, the links between lack of flood prevention and flooding are all too obvious. And the real danger for the government is that perhaps others may begin to see these parallels.”

What is being called the SNP’s fit of pique is partly an expression of this deep frustration, that when you come up with promising solutions, perhaps a way out, a better way forward, the forces of authority and a complaint media work their hardest to destroy it. They are currently in full defence mode, backs pressed against the wall, realizing that they have gone for broke by legalizing the referendum and refusing a second question and are now in the hands of the Scots. As is their economic future. A decision to split would be a severe blow to hopes of closing the deficit, of shifting some of the mountainous debt, of keeping their borrowing costs low, avoiding an almighty nuclear weapons headache and diminishing them in the eyes of the world. And still the polls tighten. http://newsnetscotland.com/index.php/scottish-news/8765-worries-for-no-campaign-as-currency-threat-halves-lead

The latest thistle in their pants is the game-changing warning that liabilities are equated with assets, a fine principle in law, and the reason they are now working overtime to suggest Scotland will suffer if it declines their invitation to load up the national credit card with their borrowings. I don’t see it. Salmond has offered to pay. They have in effect declined the offer. They are stuck with it, palms getting sweaty.

There is of course now no easy solution, they having painted themselves into an ever-reducing box. The offer should be to negotiate but they’ve thrown that one away. They can’t make soothing noises because they blew that one too. All that’s left is what they’re good at – threatening and warning…assuming you are intimidated by Danny. But a deal will be needed. London must acknowledge an agreed deal and Scotland’s negotiated departure before most of the world will accept us. So it may be that some share of debt is accepted even if they stick to the refusal to share sterling and we will begin our new relationship as we began it all those years ago, in resentful and grudging acceptance of our one-sided relationship with the grabby neighbor.