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. )

Danny-Alexander-005

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 13th 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.

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Bob bob bobbing along

When you work in 80 different countries as diverse as Angola, Egypt, Iraq and Mozambique, Mexico, Brasil, Azerbaijan, Russia and Indonesia, it’s easy to see why you’d be worried about a change of regime in Aberdeen.

If your company operates in places where there are dictators, constant changes of government, mass riots, political trials, extra-judicial killings, no free media, mass poverty, public corruption, no rule of law and drug cartels running whole towns and beheading the police, it’s understandable that the prospect of paying less corporation tax to do business in Scotland would freak you. But that’s the view of the fearless buccaneering American go-getter Bob Dudley of BP. Things could get difficult for Bob as he dodges into doorways on Union Street afraid of what calamity independent Scots might visit on him and his company.

And he’s right to be concerned. Remember this is the man who had to sneak out of Russia with unsmiling oligarchs on his tail when a joint venture went wrong. In 2003, he was in business with four Russian billionaire oligarchs. The Russians wanted more bang for their buck and the venture became a fierce power struggle, with BP executives alleging harassment by both the oligarchs and the Russian government. Dudley was sweeping his office for bugs and taking phone calls on his balcony to avoid being recorded. In July 2008, Dudley fled. His visa was set to expire, and it seemed that the Russians weren’t keen on renewing. BP was so paranoid at the time that they didn’t announce his departure until he was airborne, and refused to disclose his whereabouts. Dudley continued to run the company from his secret location. A Russian court banned Dudley from holding office in the country for two years.

Now that is exactly what I suspect Salmond plans. As soon as we’re independent he’ll muscle in on BP profits, demanding more and bugging Bob’s office and getting Aberdonians to spy on him. No wonder brave Bob is a worried man. Russia is nothing compared to the cold shoulder in Aberdeen where even the seagulls attack to order.

And let’s not forget a genuine tragedy afflicting BP which is, how can I put this, unlikely to occur in the Forties Field… the Amenas gas plant in Algeria was attacked last January by Al-qaeda and four members of staff and 36 colleagues from partners and contractor companies murdered among them two Scots Carson Bilsland of Bridge of Cally and Kenneth Whiteside of Glenrothes.  Doesn’t it ring hollow to you – and shouldn’t it do so to Dudley – for him to talk of uncertainties in Aberdeen and the North Sea when in recent times his company has confronted real, chilling difficulties which cost the lives of his own people in other much more challenging countries?

But Bob of course didn’t really mean that. He was playing politics and when asked at a press briefing about difficulties said he thought that “office costs” would go up. What is he talking about? Will Muriel in accounts demand a pay rise now she’s independent, will the price of rowies go up or will the cleaners demand more time off to go to Pittodrie now that Aberdeen are back up the SPFL? We are not told. But what we are told by Bob in his more lucid chief executive mode is this.

“BP has been given the go-ahead to develop the second phase of the massive Clair Field in the Atlantic frontier west of Shetland as part of a £10bn investment by BP and its partners over the next five years. The latest surveys of the 20-mile long field have also confirmed seven billion barrels of oil equivalent are in the giant reservoir, making it the UK’s largest hydrocarbon resource. Global energy demand is going up, and the world will need 16 million barrels per day more in 2030 than today.”

So that looks like the end of the North Sea adventure for BP then. That investment and his remarks make clear there is no future in Scotland….

No, hang on. Here is Bob again reported by an industry journal. A third phase of the Clair Ridge is mooted (on the back of the £4.5b investment), the Quad 204 project to replace equipment at the Schiehallion field west of Shetland was also significant and BP confirmed plans to bring the Kinnoull field north-east of Aberdeen into production this year.

So what exactly is this prince of businessmen saying? Is he threatening to pull out of the North Sea? Definitely not. But you have to say that his unclear remarks hinting at big decisions ahead after a Yes vote are likely to spook investors who have thus far been reassured by most major businesses and investment financiers that independence offers no immediate threat.

Or perhaps the same businesses and financiers know full well that he is playing a political game which has absolutely no meaning whatsoever for the company and its operations. Indeed, the offer from independence is lower corporation tax and guaranteed industry consultations before any tax changes – to avoid uncertainty.

And where has uncertainty come from previously? Here is a quote from Douglas Fraser, Economy Editor at BBC Scotland: Oil and Gas UK, representing the sector links the sharp drop in production over the past couple of years to tax raids by Gordon Brown last decade and by George Osborne in 2011. Care to comment, Bob?

In his BBC interview Dudley named two other areas of concerns apart from “office costs”. He was worried about currency. There are two replies to this. First, the Scottish government has never wavered throughout the referendum campaign from its view that it will use sterling. The British have refused to rule it out, although they could. Or they could say it is likely. Either way, this is London’s call and Bob has a direct line to Number 11 so why doesn’t he use it and end his uncertainty? Second, I thought oil transactions were conducted in dollars. I hear there is a move to change that but if it happens it would be by going into the euro (much maligned in the UK) certainly not using sterling. Does Bob really understand his own business?

Then he is worried about EU membership…do you feel like screaming at this imbecilic nonsense? Brussels will only clear it up if asked by London and London refuse to ask – ergo, Bob – demand London clears it up…And if you’re so worried about EU membership what have you said to Cameron about his referendum plan?

Can a man in charge of one of the world’s biggest companies really be so dim-witted about areas which he himself says are crucial to his business? Eh, yes, he can.

He seriously infuriated the waiting oil industry community in Houston at the annual CERAweek conference by failing to read their mood and brushing aside the Deepwater Horizon issue for which the company is on trial in New Orleans. Eleven men died and millions of tons of oil polluted the Bay of Mexico in the BP spill and for which the company is paying out billions in compensation, hitting their profits today. One report said: “He canceled his post-speech press conference, likely because he didn’t want to be asked about the likelihood of settling with the Department of Justice. And in his speech he neglected to speak much at all about the changes that he has wrought during his 2.5 years at the helm of BP. This is too bad, because what the gathered suits would really like to hear from Dudley is a litany of reasons to believe that BP is back, solid, secure, safe.”

So there he goes again…avoiding the key point and running away. When asked to be specific about independence in Scotland he declared himself “against Scotland drifting away”.  Does he know something about geology we don’t? Or does he read into Salmond’s statements as an oil economist anxious to work with the industry to secure its future profits and help his country that he somehow is going to become less interested in Scotland’s North Sea bonanza? The sad truth for Dudley is that if a politician had made such weak, unsubstantiated statements they would have been laughed at. But because he carries the mantle of corporate power he is revered and lauded for his courage. Well, not in my house. And I’m not sure how many oil people in Aberdeen will welcome unhelpful vague innuendo about their future.

And here’s a thought to ponder. Why DID he voice those “personal views” yesterday? Try this virtual conversation between a BBC business correspondent and BP’s media man.

BBC: Profits down 30 per cent? Doesn’t look good.

BP: All because of Deepwater Horizon.

BBC: Ah yes, how is the trial and payment of billions in compensation going?

BP: We’d rather avoid that. Can I suggest you ask him a question about independence. He might have something to say.

BBC: Righto! Thanks.

And what is everyone talking about today? What was wall-to-wall on television news? Did you hear that profits were down….or did you hear concerns about independence? Isn’t it interesting just how docile and compliant our media is when a story that fits their agenda is laid before them. And doesn’t it partly explain the imbalance in coverage by the broadcasters…all No has to do is say the world Fear and all intelligence and scrutiny evaporates from our journalists who seem unable to ask the most basic questions. They fall down in front of this guy in gratitude and take him at face value, do as they are commanded, follow his agenda, and are satisfied that journalism has been served. Surely the job is to report what he says and then analyse what he is saying and why is he saying it?

Normally when a businessman strays into politics a correspondent’s antenna would twitch. At the very least he would ask if this was what shareholders expected of him and doesn’t preferring one side over another alienate a market?

I realized overnight why that didn’t happen here. It is because what Bob Dudley was saying fits the bias and agenda of the journalists. Their mindset is that independence is silly, dangerous, anti-English and disruptive of business and here is someone in authority backing up their prejudices. It isn’t that Dudley shouldn’t say it, it’s that the journalists forget their primary duty when reporting it. The coverage today lacked balance but worse, it lacked basic questioning journalism and is turning our debate into Punch and Judy…he says something, she hits him over he head.

This moronic journalism came up last night at the launch of Murray Pittock’s revised book Scotland – the Road to Independence? at Blackwell’s in Edinburgh. There is a growing sense that the combination of outrageous, insensitive, dismissive messages from London government and Labour, the unremitting dependency offensive of No and the parroting of all this by an increasingly mistrusted media is slowly backfiring. It is reaching the end of its worth and is turning in on itself. Nor am I sure that the media is right in assuming that the public is intimidated any more by the garlanded statements of businessmen. The banking crisis destroyed the last vestiges of respect for the corporate elite as moral leaders as surely as the expenses scandal did for Westminster politicos.  Mr Dudley may be misjudging the Scots, just as he did those Russians, the Texas oilmen and the bereaved families of his dead workers.

(My contributor Mac provides this illuminating quote from oor Boab on just how worried he is about political change. .. At the height of the Libyan civil war in 2011. “The Libyan crisis has not disrupted any of our businesses at any point so far. Our activities are far away from any of the troubled areas, but time will tell. BP is committed to improving the business in Libya regardless of the political situation”.

Of course if Alex Salmond is in charge, we’re out of here…!