The Treasury just admitted that the Scotland Bill is a trap

The Herald has an exclusive story today that the Treasury will offer Scotland £4.5 billion “compensation” if we accept their preferred fiscal framework. This is a stunning admission that Scotland will lose out under the Scotland Bill. The SNP claim that the Treasury’s plan (without the “compensation”) could cost Scotland up to £7bn over 10 years.

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The debate is about something called “indexation” – how Scotland’s budget will change if Scotland’s population or tax take grows at a different rate to the UK’s. The Smith Commission agreed that more devolution should mean “no detriment” to either the UK or Scottish Government. Unfortunately, it was left unclear what this meant. The SNP’s position is that if Scotland’s population and income tax growth remain the same, Scotland’s budget should not be cut. Historically, Scotland’s population and income tax growth are both lower than the UK.

Until now, the Treasury has been claiming that their preferred indexation method is fair, but today’s offer of £4.5bn over a decade to take the deal shows that they know it is actually deeply unfair.

While £4.5bn might plug the gap over the first decade of the new formula, Scotland would then face a fiscal cliff if its population growth did not keep up with the UK. As Professor Anton Muscatelli has shown, the Treasury plan leads to greater and greater cuts for decades to come.

The effect of different indexation methods on Scotland's budget. Source: Professor Anton Muscatelli

The effect of different indexation methods on Scotland’s budget. Source: Professor Anton Muscatelli

Population growth. Source: Thomas Widmann

20th century population growth. Source: Thomas Widmann

Scotland’s low population growth, fuelled by emigration to make a better life in London and abroad, was a founding issue of the Nationalist movement. If Scotland’s population had kept pace with independent Denmark and Norway’s during the 20th century, there would be around 10 million Scots, rather than 5 million. The Scotland bill gives us no powers to grow our population.

With the Treasury’s desperate offer today, there can be no doubt that Scotland stands to lose out from the Tories’ vision for devolution – and we may head into the Holyrood election campaign with the infamous Vow still undelivered.

Comments (82)

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  1. Ian Kirkwood says:

    Looks more and more like Scotland must plough its own furrow by adopting Annual Ground Rent (AGR) as proposed by the Scottish Land Revenue Group. See http://www.slrg.scot to see ‘Bulletin 2’ that explains how Scotland can move swiftly to a sustainable annual surplus of £11 bn.

  2. helen carrington says:

    This is shoking, more lies, nothing new there then, juat let scotland go, let us be free once and for all, let scotland deal with her own decisions, freeeeeeeedom

    1. Sam. says:

      Just e free then we sort everything out… Where have we heard that before? Don’t worry everything will be okay once we are free.

  3. Coul Porter says:

    Why should we accept a finance deal from a system that is £1.53 trillion in debt?

  4. yesindyref2 says:

    Very possibly yes, smoke and mirrors where the Treasury tells us all that the £4.5 billion compensation is a new deal, whereas it’s only really the same as the previous one dressed up in a new Joseph’s coat, perhaps with the addition of a £0.5 billion sop arithmetically allowing for the usual rounding errors!

    The devil will be in the detail and I guess we’ll have to wait and see.

  5. yesindyref2 says:

    Very possibly yes, smoke and mirrors where the Treasury tells us all that the £4.5 billion compensation is a new deal, whereas it’s only really the same as the previous one dressed up in a new Joseph’s coat, perhaps with the addition of a £0.5 billion sop arithmetically allowing for the usual rounding errors!

    The devil will be in the detail if there is any, and I guess we’ll have to wait and see.

  6. Alistair Livingston says:

    On the problem of ‘low population growth fuelled by emigration :

    “Over the course of the nineteenth century, 1. 9 million Scots left the country. This figure includes those directly forced from the land by the Highland Clearances, but most came from the Lowlands.

    Of the Lowland emigrants, some left directly as a result of the Lowland Clearances in the early part of the century. But most of those who left later were a generation or more removed from the land. Even as late as the period 1951-1960 which was an ‘interlude of comparative prosperity’ for the west of Scotland, 127 000 people emigrated from the region. As Anthony Slaven put it ‘The region failed to generate enough jobs to offer the economically-active age groups.’ [The Development of the West of Scotland 1750-1960’ (London, 1975)]”

    From http://greengalloway.blogspot.co.uk/2015/12/the-scottish-clearances-part-six.html

    1. Ian Kirkwood says:

      I am sure you will agree with economist Fred Harrison’s view that, “Land is not scarce. Millions were driven out, over the past two centuries, not because of a shortage of land, but because of the dispossession of land – its concentration in ever-fewer hands (proportionately speaking). The notion of land scarcity is one of the Malthusian-type rationalisations of the perverse culture inflicted on people by the land grabbers.
      The repopulation of Scotland’s under-populated areas is one of the great projects that needs to be at the centre of political vision. It is the core challenge if a New Scotland is to be created, rather than a rehash of the old system under independence. The aim would be to achieve homeostasis – a sustainable balance of people and resources, so that both communities and natural habitats can flourish through the synergy of their interaction. And the organising mechanism for that project is the Annual Ground Rent (AGR) see http://www.slrg.scot. The challenge, philosophically and sociologically, is to help people to understand that a simple, banal fiscal mechanism – one so easy to operate – can facilitate such a beautiful outcome.”

  7. Gralloched says:

    ” with the infamous vow still undelivered ” ?
    Did anybody believe for one single second that it would be delivered ?
    How breathtakingly naïve.

  8. Macart says:

    Well who knew?

  9. Kenny says:

    The population growth issue should have been a bigger issue during the referendum campaign. I think a lot of people still don’t quite understand what the issues are which is going to make explaining the problems with the fiscal framework more difficult. In a lot of ways, it should be obvious though. All the UK’s power and wealth is in London. Scotland doesn’t have a civil service in the way London does. Departments like Defence, the Foreign Office, the DWP and so on are big departments with a lot of jobs and money sloshing around. On top of that, UK infrastructure spending is very heavily focussed on the south east while it’s taken a SCOTTISH Government 16 years to start dualling the A9 and almost as long to connect parts of Lanarkshire to Edinburgh by train. The unionists think is a great thing – “look at all the opportunities we give Scots to escape their poor, pathetic, miserable lives and come to London to truly live!” – but really it’s a case of being the Alaska of the UK: distant from power, different from the rest and virtually ignored as a result.

    In any future referendum campaign, we shouldn’t focus on making immigration our top priority for population growth. We should focus on the fact that just becoming independent will create something like (at least) 30,000 jobs in those civil service positions, to a value of over £1bn. All that extra money and government activity will support a whole lot of other businesses too, and that sudden injection of money and energy into Scotland will give our young people a reason to stay. Then a virtuous circle develops; a prosperous Scotland is a Scotland worth staying in, and besides, foreigners won’t get jobs in England’s Defence department and FCO.

    1. Ian Kirkwood says:

      Our tax system sucks the country’s resources from the periphery to the economic centre: London and the South-east. The tax system creates these areas where people gravitate because that is where we bestow the highest untaxed capital gains on property owners. The tendency for poverty to increase with distance form the economic centre was recognised by David Ricardo two centuries ago and the gargantuan losses to Scotland and other peripheral UK areas are described in Fred Harrison’s book, ‘Ricardo’s Law’. But if we collected those socially created location ‘rents’ (via AGR) to fund our public services there would be fair per capita distribution of resources, suppression of land speculation and a repopulation of Scotland.

  10. Bob Costello says:

    I think people are missing a very important point. I would like to know why we are in this silly position in the first place . Firstly , the Smith Commission was always going to be a nonsense but for the Scottish government to have actually negotiated a potentially no benefit agreement and then signed it off without agreeing the financial consequences showed a remarkable degree of stupidity.
    Can I have a show of hands of people who are in the habit of going into a car showroom, ordering a brand new car and walking out without asking the price. No I don’t see any hands in the air but it would appear that if I went into the Hollyood Parliament and asked the same question, there would be quite a few hands in the air.

    1. yesindyref2 says:

      Actauly it’s the other way around. It’s like someone walking into a car showroom, and ordering a car with optional extras and their own paint job, on the condition that if they don’t like it when it’s delivered and they see it, no deal.

      The Scottish Government signed up to the Smith Report with “no detriment”, and as soon as they had that in the report accepted by all parties plus the UK Government, they could get out the popcorn and watch as the UK Government (plus Labour) made mistake after mistake after mistake after …

      The Scottish Government haven’t signed up to the Scotland Act 2015. They don’t ahve to if they don’t want to, there’s no obligation. Thwy might not like the shape of the coffee holder.

      1. Bob Costello says:

        So can you tell me what the propose of signing up to an agreement that would give no benefit and put the Scottish government in the position of being tax collectors for Westminster. The Smith Commission was never going to deliver anything of substance . Even Joahn Lamont set it out quite simply when she said that any additional tax raising powers given to Scotland would not result in one single penny of additional income being available to Scotland. The only extra power we will have is the power to shuffle the same pack of cards

        1. yesindyref2 says:

          Sure Bob. The first benefit is that the SNP and other pro-Indy parties are being seen to support the “more powers within the UK” voters to the best of their ability – and that had to be very genuine. Then when the more powers don’t come, get watered down, or turn out not to be enough, the hope will be that the “more powers” voters will move over to Independence. It seems some have already, currently at 52% in the latest poll.

          Secondly, the income tax powers would have the ability to vary thresholds (apart from the personal allowance) of higher tax bands. As well as the rates themselves. Scotland has a little lower average income than the UK as a whole, but substantially less than the South-East of England and London. So the Tories have increased the thresholds of higher rate tax bands to cater more for that than the UK as whole.

          Scotland could lower those thresholds, or at least not put into effect Osborne’s planned tax giveaway by 2020/1 to those on the upper income bands. That does bring in more tax. It could vary rates, but might not even need to. And if it did, it’s not the blunt instrument of 1p on all bands, it can be specific to bands – in fact the ScotGov could even invent another band.

          Thirdly, even with just 50% of VAT, if there’s more money in the economy, there’s more spending, more VAT collected and Scotland gets half – the Treasury smiles and trousers the other 50%.

          Fourthly policies such as childcare to get more employment, bring in more income tax, benefit Scotland, not the Treasury. Same for the “no detriment” bugbear, population growth.

          Fifthly, back to number 1, figures then in the next 2 or 3 years make it even more clear that Scotland is “being robbed” by sending money down to the Treasury, and even more people move over to YES.

          This is a parallel move towards Indy, nothing stops any other route.

        2. yesindyref2 says:

          There is one (and probably more) I missed out. The more powers are devolved to Scotland, the less of a “wrence” Independence is for the undecided. If we were able to get new powers every year, we’d soon be Independent by default.

        3. yesindyref2 says:

          There is one (and probably more) I missed out. The more powers are devolved to Scotland, the less of a “wrench” Independence is for the undecided. If we were able to get new powers every year, we’d soon be Independent by default.

        4. yesindyref2 says:

          Seventh and I’ll shut up. One of the worries of some people in Scotland I talked to was what might be the future Scottish Government’s tax policies to implement “social justice”, “fairness” and “progressive”. With these new tax powers, the Scottish People will be able to see what it might mean, and that would remove a major uncertainty. I think most people care more about their wage packet, than any single other policy. They might not like whatever the income tax policiers are, but they get them with devolution or Independence, no difference.

  11. Kenny Smith says:

    Its plain this has to be rejected. Yes the Yoonies will scream but the vast majority of Scots know it total BS. Hard yessers obviously don’t want it but even the soft middle no/yes voters realise it is so sub standard that its insulting. Even high profile Scots Tories know its crap. I know the SNP do not want to be seen as obstructive but everyone is crying out for them to show some steel and reject it and explain fully why. We are going to be painted as the bad ones no matter what so might as well show some balls and with any luck it will speed up the dissolution of the union.

  12. DB1 says:

    That population graph is shocking.

    1. Mike says:

      I couldn’t agree more it looks like ethnic cleansing.

      1. MBC says:

        The population figures are worse than that when you consider ot over the entire course of the union.

        In 1707 Scotland was 1/3 of the land area of the UK but had between 1/5 and 1/4 of the population.

        It is still 1/3 of the land area.

        But only 8% of the population.

        Norway has gone in the opposite direction. In 1500 under the union with Denmark its population was only 150,000 whilst independent Scotland’s was a respectable 450,000. Norway got independence in 1814 and has now nearly drawn level with Scotland in population terms.

    2. RedStarTrout says:

      The graph is indexed, the percentage growth is worse. I looked the population growth figures for the 40 years from 1972 to 2012 for a few countries.
      Ireland up 52%
      Norway up 26%
      UK up 13%
      Scotland up 1.3%
      Scotland’s figure, appalling as it is, isn’t even that good. From 1976 to 2001 our population actually fell by about 3.5%. You usually need a good war to get that kind of result, but that was the peak of North Sea oil. It was only after Holyrood got settled in that we started growing again.

      It’s not any one party, any one politician or any one policy, it’s the Westminster system that doesn’t care about Scotland or creating jobs and opportunities for it’s people.

    3. Denis Mollison says:

      The world is already dangerously overpopulated.

      The idea that countries should all aim for population growth is a Ponzi scheme – that is, it promotes a growth bubble that has at some point to end in disaster for the planet.

      If we can only have economic growth by increasing our population indefinitely, we need to learn to live without economic growth.

      1. RedStarTrout says:

        Population growth is just a measure of how well a country is being run, it’s not an end in itself.
        If a company is run well then it gets more customers, if it’s run badly it loses customers. It’s the same with countries.
        If a country is run well and creates jobs and opportunities for people then the population goes up because people stay there or move there.
        Scotland’s figures are a measure of the failure of Westminster to govern this country effectively.
        Why do you think those other countries have grown so much? It’s simply a matter of having governments that care about those countries and try run them for the benefit of the people, something Westminster doesn’t do for Scotland.

  13. squirreltowers says:

    We do not want this fiscal settlement, it has to be rejected as the trap it is. Who cares if we upset the Tory government, we don’t have to appease anyone

    1. DB1 says:

      Most Tories don’t care if it is rejected. They never wanted further devolution anyway.
      Hence the feeble Smith offer, now sabotaged with a poor framework.

      The only good thing about the bill as it stands is that it would probably lead to independence within the next decade. Perhaps faster than a situation where it looks like Scotland is comfortable sticking with the Barnett Formula.

      1. Willie M says:

        Sticking with Barnett really is the best option. The alternative you’re describing here is essentially to become poorer as a part of the UK for some undefined period of time until everyone gets so sick of it they push for independence (which would have no guarantee of making us any richer – and in fact current figures suggest could even make us poorer than under this scenario).

        I don’t see the purpose in that if I’m honest. The best option is sticking with the status quo, waiting for the economic situation to change (which it likely will at some point) and then becoming independent when it would be a net gain to the economy from a fiscal perspective. We’re not in that scenario today and likely won’t be any time soon.

        1. DB1 says:

          In what scenario will it change, unless we have a second unlikely oil boom and new major discoveries ?
          Many think the oil price will never reach the same heights, as hybrid or fully electric cars will start to slowly replace petrol cars.

          Seriously.
          London and the South will *always* be the focus of the UK economy, and nothing will be allowed to compete with that. Partly because it would be easier for Scotland to break away.

          Getting into a situation where we give the appearance that we prefer to be subsidised, isn’t likely to lead to independence

          Maybe gradually losing the Barnett Formula will start to focus people’s minds.
          We either enter into a slow relative decline, or we take the full powers of a nation state giving the potential to greatly boost our economy over time.

  14. willie says:

    When a country controls and takes 85% of another country’s tax, then things will never work out. Two countries each raising their own tax but agreeing to contribute to joint areas of cooperation does however work. Until then, I’ll take and then decide what you get back will never ever work. But we know that!

    1. Willie M says:

      The problem with this (which nobody ever seems to acknowledge) is that if Scotland simply generated its own revenue at this point we’d have to either borrow, raise taxes, or cut our spending by a pretty sizeable margin. The last GERS report put that figure at about £4 billion annually, which was before the oil price drop. The next GERS report (out next month and covering the period after the oil price drop) will likely show a gap of somewhere closer to £7-8 billion.

      What we’re calling for is essentially more powers, but not too many powers (i.e. full fiscal autonomy) because we know that would be a dreadful deal from a fiscal perspective at this precise moment in time. Long-term who knows what the situation would be, but there’s certainly no case for it today.

      1. C Rober says:

        But with FFA you can set rates , thus be more appealing for companies to locate to Scotland.

        I get your point though.

        1. Graeme says:

          The point is that’s a long term objective. Presumably to attract new investment, rates would need to be lower which would mean further short term cuts.

          Obviously in the medium-long term that’s not an argument against FFA or independence, but it’s a point that needs to be discussed more honestly.

      2. willie says:

        And so is your analysis that Scotland is too poor, too subsidised by England to go it on its own.

        You don’t actually say that by the careful use of the words ” at this point ” but that is what you certainly suggest.

        So are we too poor and reliant on English support? But hey England wanted us, better together, defended the Union.

        1. David Sangster says:

          I don’t believe for a moment, Willie, that “England wanted us”. I doubt very much whether the people of England really give a monkey’s whether we’re joined at the hip or not. David Cameron wanted to win, he wanted the Queen purring at him, he wanted the fat cats and moneyboys fawning over him, he wanted the Scots to stay under the thumb where we’ve been for three centuries. And that’s still the agenda.

        2. Willie M says:

          Willie: These are really political/rhetorical arguments. What we’re talking about here isn’t whether independence or full fiscal autonomy (or any other political framework) is a good idea in principle, but what we should do right now to secure the most public spending for Scotland. We have a number of different options and the only sensible way to make that decision in my view is simply to work out, as best we can using the existing figures (which it’s worth keeping in mind are estimates), which setup in the short to medium-term is most beneficial.

          At the moment the FFA model doesn’t meet that test. If things change in future then it would make more sense. There’s no point in holding on to one model or another indefinitely, we should go where the numbers take us as far as I’m concerned. Independence itself is a completely different issue because you get far more than simply tying your revenue to your spending. What we’re discussing here isn’t independence, it’s how the grant to Scotland from the UK’s finances is calculated and I personally think the “trap” here is in pushing for a system that supposedly gives us “more powers” but in reality just cuts our funding while still keeping us tied to the British state.

          1. willie says:

            Quite agree, the Scotland Bill settlement is a trap. Westminster owes us nothing and is hostile. Let’s walk away.

      3. Ian Kirkwood says:

        By zero rating income tax and instead collecting Annual Ground Rent (AGR) Scotland would move swiftly to an annual surplus of £11 billion. See http://www.slrg.scot (Bulletin 2).
        Some of the additional positve outcomes would be:
        • inward investment
        • improving pattern of land holding
        • suppressed land speculation
        • recession avoidance
        • banking reform
        • enterprise encouraged
        • affordable homes
        • plentiful homes
        • recovering population
        • zero tax avoidance

      4. davy says:

        How many trillions in debt is Westminster again!? At least we would have autonomy and dignity in our own decisions and yes shockingly we’d have debt! Who doesn’t nowadays!

  15. Big Jock says:

    Cameron doesn’t want to give Scotland anything, but doesn’t know quite how to do it.

    When we voted no,we voted to get robbed blind and treated like pariahs.

  16. Mike says:

    Neil Findlay called the FM a “lying whore” at FMQs today and there is not a peep about it anywhere in the media. The Herald reports that Findlay was identified as the Labour member who shouted “Liar” to the FM.
    You can hear him on the You tube Parliamentary video.

    I cant imagine how much of a field day the media would have if a member of the SNP shouted at Kezia Dugdale in the same manner.

    The total corruption of the UK media knows no boundaries.

    1. Angus says:

      And I’ve listened to that clip several times, I can’t hear the word “whore” anywhere, nor was it mentioned in the Parliament. The only people who seem to be suggesting that are a few (I mean three) random people on Twitter as far as I can tell.

      1. Mike says:

        Oh no doubt every Labour drone in the land wont be able to hear it in spite of the clear blue video audio evidence.

        And yet its there on You tube or the Parliamentary archive for folk to hear it said themselves.

        Any SNP MSP would have been condemned and demanded they resign on far less evidence by the opposition and the full weight of the corrupt and worthless state run UK media circus.

        And people actually voted No for this. Nowhere else in the world would people have voted No for this level of despotism.

    2. C Rober says:

      Funny i pulled it from Filmon on the EBC , North England office news , even the pie chaser Brian talked aboot it.

      1. Angus says:

        I think we can file this one in the “Glasgow riots”, “T in the Park are taking down saltires”, “David Cameron is hiding a massive oil field off Shetland” cabinet.

      2. Mike says:

        No you didn’t you lying little troll what you pulled up was the EBC telling us all that Findlay shouted “Liar” not “Lying whore”.

        The MSM showing us all their worth again. Corrupt and State run to the core.

        1. C Rober says:

          @ Mike , I would take offence if your directing that to me , I am neither lying , little or indeed a troll. Rather you seem to be the troll , obviously.

          I said what I pulled from filmon , while watching the not so scottish media state propoganda machine.

          Whether the word “whore” was mentioned is regardless as I was responding to the word “liar”

          Whore , allegedly , now that is a matter of Police Scotland and parliamentary affairs to investigate on whether the FM has indeed declared that additional income as an interest to Hollyrood , prostitution is still a crime as far as I know , and of course taxable , that is unless its channeled through The Chronicles of Deer LTD.

          Then of course we should be asking just how would a Labour Msp know of the 2nd income of the first minsiter in this way , perhaps he is a frequent kerb crawler of the area in which she plies her trade , and perhaps an allegedly disgruntled customer.

          Even if you or some other bella readers wont find the funny side of the above , ah bet the FM would . and naw am naw Brian spanner , even though I frequent ardrossan , but only fur the unionist banter.

          I suspect though that the full weight of the law will be brought down on the offending Msp , hate crimes are the only thing that gets tin tack points in the SNP MSP these days , so they will be sure to come down harsh for it from another party in session.

      3. Mike says:

        See I can justifiably call you a “liar” for that statement and it would be correct to do so but if I called you a “Lying whore” it would be something else entirely.

    3. Peter Clive says:

      Labour in Scotland: cowards, trying to be bullies, and failing:

      http://moflomojo.blogspot.com/2016/02/working-class-hero.html

  17. Alf Baird says:

    What does anyone expect from a multi-millionaire investment banker who built his immense wealth on leveraged acquisitions based on debt. Debt is all Scotland would ever get from this charade (i.e. Smith).

    We should be cautious of packing our universities with more postgrad (immigrants) coming from outside Scotland, as our universities continue to do in order to obtain high student fees. Some 80% of Scotland’s postgrads come from outside Scotland, and as postgrads take many of the higher level/pay jobs within Scotland, this means Scots will always be in the minority when it comes to securing high level jobs. A more logical approach (for Scotland and our people) would be to ensure Scots are given most of the postgrad slots at Scottish uni’s. If we have a labour shortage it should be at the lower skill levels where we import people to do the work, but not to import and/or educate immigrants to run our key institutions etc. At the moment we bizarelly upskill immigrants in order that they take the top jobs, and we leave the lowskill jobs for the locals, which is actually discriminating against Scots. If anyone has a different take or evidence on this I’d be glad to hear their argument.

    1. C Rober says:

      Its also the reason why Scotland can staff its surgeries and hospitals , but even then its still getting harder to fill those positions with immigration.

      We can always allow Scotlands young to be sandbags , well they wont be able to afford a hoose might as well huv a barracks instead to keep em aff the steets begging. Before IDS starts suggesting national service.

      Tongue in cheek btw , no offence meant.

    2. willie says:

      Sounds as if you’d be better in UKIP or the NF Alf with all this anti immigrant rhetoric. Personally, I think attracting the brightest is a recipe for success. Nor do I agree with the logic that immigrants should only be brought in to do the low end jobs Bit of the old superior white colonialist there Alfred if I may opine.

      1. Alf Baird says:

        “is a recipe for success”

        What success would that be? Economic? Any evidence?

        What you are proposing seems like discrimination against Scots. Personally I favour a strategy to educate all Scots to the highest levels possible, and not to continually leave over half our population struggling for opportunity. Our ‘elite’ universities have limited places and intentionally give a high proportion of them to high fee payers from elsewhere, many of whom then take the high level posts here. In many other countries this would be considered a national scandal.

        1. Alf Baird says:

          ESRC Report, May 2013:
          “university participation of Scottish domiciled students has lagged behind that of students in England, Wales and Northern Ireland for some time. This is despite the free tuition policy that has been in place in Scotland since 1999; indeed the gap between participation in England and Scotland has widened in recent years, despite large fee increases for English students.
          lower staying on rates, lower rates of attainment at age 17/18 seem like potential causes for concern in Scotland, particularly since Scottish individuals appear to be less likely to go on to university. This could be cause for alarm in a devolved Scotland. Showed deep levels of inequality in Scotland, particularly between pupils from different socio-economic groups. This is a huge problem which devolution has been unable to solve.”

          And this fits with data from Scotland’s Census:
          “In 2011, just over quarter (26 per cent, 1.1 million of 4.3m people over 16) of the population in Scotland aged 16 and over had achieved Census Level 4 or above qualifications, such as a university degree. A similar proportion (27 per cent, 1.2 million people) reported they held no qualifications.”

          So, Scotland has 19 higher education institutions (i.e. more per capita than most other countries), who day and daily describe themselves as ‘world class’, yet who still manage to leave three quarters of Scots out in the cold. As these institutions clearly do not educate many Scots, who do you think they educate, Willie? Scotland does not have a labour shortage – we’re jist no educatin wir ain fowk. Why is that?

          1. Alf Baird says:

            “According to the Singapore Department of Statistics, 74 per cent of Singapore’s resident non-student population aged 24 to 34 years have completed at least tertiary education in 2012, which includes polytechnic diplomas, professional qualifications, and university degrees, up from 49.6 per cent in 2002. And this figure is set to rise even further by 2020, when Singapore will have six universities offering full-time degree programmes. ”

            So, Singapore, with a similar population to Scotland, manages to get three times as many of its residents through higher education than Scotland does, with just one third the number of uni’s that Scotland is ‘blessed’ with. Its no wonder the Singapore economy is light years ahead of Scotland. Scotland may well have self-proclaimed ‘world class’ universities, but they are clearly not working for the benefit of Scotland or for the Scots people.

          2. Ian Kirkwood says:

            Singapore’s stellar success is attributable its tax system. Location rent as principal revenue. It means the land market and its variables are suppressed and the socially generated site rental values are collected to run services. The state is landlord, having pursued a policy of buying up land since the 1950s. The result is double the prosperity in every area. Professor Roger Sandilands was prof of economics in Singapore. When he came home to a chair at Strathclyde the salary was half.
            Sandilands has demonstrated that had the UK followed through with the 1909 People’s Budget (passed by the Commons but blocked by the Lords) then earnings today across the UK would have been at least double.
            It is important to identify where the missing prosperity has gone: into the pockets of the owners of land, including householders. Don’t we just love those free capital gains?
            Today Annual Ground Rent (AGR) is the equivalent revenue stream to embrace for the results we all need and want (www.slrg.scot). The state does not have to be landlord; it just needs to collect the rental value of unimproved land and lower current damaging taxes.
            Time was when Singapore’s waterfront was a village compared to that of the mighty ‘Second City of Empire’. Today few imagine Glasgow’s waterfront could ever match Singapore’s.
            With AGR it would.

          3. Alf Baird says:

            Ian, I think more and more Scots agree that something like Annual Ground Rent (AGR) would be a highly positive move to sort out the current dysfunctional system. Not least to sort out the offshore registered central belt city port estate owners who like other big landowners add little to our economy or society: http://reidfoundation.org/2016/01/sort-out-our-ports/

            As for Singapore, don’t forget that the state-owned seaport is the economy in large part, handling more trade by value as the whole of India last time I looked, and a similar trade value to the entire UK. Not bad for just 5m or so highly educated folk.

            I certainly hope Andy Wightman is elected in May so that more in-depth knowledge and debate can be introduced to land reform policy.

  18. Redgauntlet says:

    An English government trying to buy off a Scottish government with a lump sum of money in return for signing off on a very bad deal for Scotland…

    …what does that remind me of again?

    1. Peter Clive says:

      I thought precisely the same thing … and interestingly, the numbers (after suitable adjustment) end up roughly the same … see here

      http://moflomojo.blogspot.com/2016/02/the-equivalent.html

  19. Peter Clive says:

    And all the while Labour in Scotland’s response: cowards, trying to be bullies, and failing:

    http://moflomojo.blogspot.com/2016/02/working-class-hero.html

    1. C Rober says:

      The only criticism I can give to the piece Peter is that It wasnt Scotland that got the gold , but a handful of Lords , broken and in debt ones at that.

      If it equates in todays money to what is a bribe once again , then that was a considerable sum for so few , thus in wan door and back to the English coffers again. Bit like modern Fiat returning to central banks , whom printed it off , or bank write offs if you will.

      So no money at all , just a debt write off , in turn for a nation for 300 plus years. Where that was in turn turned into in todays money , since then, in excess of the current UK debt , 1.3 trillion.

      SO just who subsidises who again DM readers?

  20. Allan Sutherland says:

    Much of the final Scotland Bill negotiations concern the SNP’s ability to bring in immigrants, because every person resident in the country attracts more “per capita” revenue and if our own people can’t do the jobs, the UK government will still pay their benefits.

    What a poverty of ideas. In Scotland the 160,00 people on unemployment benefit, will soon be joined by council, steel and oil workers. This equates to 2.2 people per vacancy who are defined as fit and able to work.

    We need workers who have the skills, brains and motivation to do the jobs on offer, and an ambitious combination of welfare reform, training, life coaching and housing reform to help them. Only then should we recruit outside.

    Our education systems should produce less event managers and media studies graduates and more plumbers, nurses, engineers, doctors and teachers.

    A “quick fix” immigration option will make the costs and lack of housing worse. Birthrates will lower because couples can’t afford a family home. A recent Government report estimated that one in every two new houses will be required for immigrants.
    I’m not against immigration and have for several years supported a Kenyan family to settle in Scotland. We are not “too wee, to poor” , we’re too untrained, too unimaginative and too “entitled”.
    Allan Sutherland

    1. Ian Kirkwood says:

      How is it that Annual Ground Rent (AGR) can resolve the population issue? Cancelling the land part of the real estate market is achieved by collecting the land rental value. This will lead to—
      1. affordable housing (then couples can afford to have children).
      2. more housing (the end of land banking, land speculation and derelict sites frees up land for developments, such as housing, so that the AGR charge can be financed).
      3. more jobs (because damaging taxes on employment like Income Taxes can be reduced to zero).
      4. brain and labour drain halted (as the rents are also collected from the economic centre – London and South-east – peripheral regions like Scotland will regain their share of collective social investment that currently crystalises in privatised land values there).
      5. Vastly more resources for public services that attract people to stay in Scotland (e.g. good education and health services). AGR is the sole revenue stream that does not lose £1 in deadweight losses for every £1 raised).
      AGR is the imaginative solution for Scotland, or any country.

    2. C Rober says:

      @ Allan

      You forgot the MSM “workshy with disability” too , so the number will be closer to 250k , when at any one time there is how many FT jobs on the market in Scotland?

      @ Ian

      Affordable housing is a lie , perpetrated by all parties.

      Council housing increases would free up more as a by product onto the open market , as land lords start to lose money propping up the deliberate lack of supply , meaning selling up , and of course a natural deflation of prices with sellers urgency to maximize loss, rats sinking ship. This is far more cost effective as a solution than FTB bungs to developers and land owners and the AH lies.

      Rather than banning RTB , the first true option for AH for the working class majoortity , the Snp should have used that 3 billion bung to developers , aka first time buyer fund , to create 3 regional SIP factories , with that comes jobs and housing costing the Councils less than 100k for a 3 bed house , using their own land they are being forced to sell to developers instead.

      BTW I am not arguing against AGR , I think I have already agreed with you on that , but I am against manipulation of the supply of housing chain.

      Have a look at the MSP and Mp declarations of rental properties , its like letting alcholics run breweries when allowing GOVTS to dictate supply – and while ignoring Council building , choosing bought only housing instead , this is enrichment of the rich , by the rich.

      The Affordable price is set at or very near the Scottish National average , which is skewed , affordable to one is not affordable to all , nor indeed the median and varies by geographical regions. For example using the SNP maths on AH in North Aryshire , and their mortgage reccomendations of 3.5x main eearners income , the max is around 70k mortgage without deposit , not 200k plus.

      Agr though you are right is a solution to fairness , a good replacement for the CT , a good tool to take land by taxation from those that hoard it , or stole it. But there is also other bolt ons to redress land ownership , including removing tax breaks and creating tax punitive measures , where land would eventually become part of the state , or a plaything of not the rich but the oligarch that could afford the heavy taxation without state handouts like tax breaks.

      1. Alf Baird says:

        “Have a look at the MSP and Mp declarations of rental properties”

        Nae doot why they want to keep the floodgates open for students coming from outside Scotland. Perish the thought of Scotland’s ‘elite’ universities actually educating more Scots.

    3. Alf Baird says:

      “Our education systems should produce less event managers and media studies graduates and more plumbers, nurses, engineers, doctors and teachers.”

      Hits nail on head, Allan. It was in the 1980’s that our uni’s were churning out thousands of graduates in ‘financial services’, now the ‘fashion’ is meeja studies or computer games. What any sensible Government needs to do is stipulate to its universities which courses it needs to run in order to ensure ALL our people can help Scotland develop economically, socially and culturally and to make for a far more competitive economy. At the moment our Uni’s ‘teach’ what and who they want and that means a primary focus on attracting higher fee students from outside Scotland, which is actually very damaging indeed to Scotland’s greatest resource – i.e. our people. Governance is not just about electing rectors (an outdated post in any case reflecting an institutionally outdated university sector), which the current tweaking at the edges education bill focuses on. You are right, having to import thousands of what Edin Uni calls “bright minds” reflects a poverty of ideas and a moreover a willingness to leave many Scots on life’s scrapheap.

      1. Morna Stewart says:

        I don’t understand why Scotland is deemed to be underpopulated, although I do agree we should do everything we can to keep our bright minds here. Given our appalling weather, the only compensation we have is our proportion of wide open spaces (relative to England at least). When I talk to English incomers about why they settle in Scotland, the answer is always to do with the unbearable overcrowding in England.

        The quality rather than the quantity of population is the answer to creating a brighter future – so education is one of the answers. The other is to create a country which is worth living in, and our wild open countryside is most certainly one of the attractions Scotland has to offer.

        Here is a league table of populations of other small countries in Europe:

        Ireland 4.595
        Norway 5.084
        Denmark 5.614
        Luxembourg .555
        Switzerland 8.081
        Finland 5.439
        Austria 8.474

        As far as I can see Scotland’s population is pretty much in line with other small European countries.

      2. Denis Mollison says:

        Don’t knock rectors – “an outdated post in any case reflecting an institutionally outdated university sector”. They are a small but welcome survivor of bottom-up democracy in today’s sea of top-down managerial structures.

        Also, attracting high-fees students from overseas doesn’t leave Scots on the scrap-heap: they are extra students, not competitors – and very welcome in giving our young people an outlook on the world.

        1. Alf Baird says:

          “they are extra students, not competitors”

          Not so with Edin Uni’s 60,000 applicants, and 6,000 acceptancies of which just one third (2,000) are Scots domiciled. That could imply c.20,000 Scots applicants are refused entry every year. Given higher UK/international student fees, student income from that source is likely to be proportionately even greater, e.g. c.80%+ from incoming students. That is certainly the case for postgrads of which 85% come from outside Scotland (ergo most of Scotland’s ‘future’ academics). Begs the question: is it a Scottish university, or is it now merely an international ‘educational’ business masquerading as a charity? If the latter, does it need a rector or a principal, or maybe just a CEO worthy of the c.£30k+ per month remuneration?
          Don’t they teach you ‘scientists’ to think critically?

          1. Denis Mollison says:

            Alf – apologies if I wasn’t answering your point. I think your basic concern is that well-qualified Scots are being turned away from university to make room for students from other countries. It’s some time since I was involved in university admissions, but I don’t know of any evidence for this. The problem lies much more in earlier years, with too few children from poor backgrounds achieving the qualifications for university: the following seems an interesting and balanced article on where we’re at:
            http://www.theguardian.com/higher-education-network/blog/2013/aug/05/scotland-higher-education-participation-inequality

            As to rectors and principals, there’s a world of difference between rectors (who I think are still unpaid) and the “principal / CEO on 30+K/month” who is part of the managerial system I was deploring.

          2. Alf Baird says:

            Denis, I’ve already seen the article on attainment you refer to. My contention is unrelated to that, in that most of the 60,000 applicants to UoE would be expected to already have sufficient qualifications in order to apply, and that UoE then selects the “bright minds” from these applicants. We don’t know how many of the 60,000 applicants are Scots but they are given 2,000 places (out of 6,000 places available) so this probably means there are at least another several thousand qualified Scots applicants rejected and looking for other options; meanwhile 4,000 mostly higher-fee applications (two-thirds of places offered) are accepted from those coming from outside Scotland who generate some 80%+ of univ. revenue (i.e. the vast majority)from student fees. What I am saying is that most ‘businesses’ would be expected to maximise revenue and in the case of ‘elite’ Scottish universities that is not achieved by opening the door to more Scots students but rather the opposite (which is indeed the outcome I present here, when two-thirds of students are not Scots, and some 85% of postgrads I believe), implying there is a ‘corporate’ incentive to recruit significantly more higher-fee paying students from outside Scotland, the latter no doubt a reflection of inadequate national/regulatory controls that might stop this from happening. I could not imagine such a situation being permitted in many other nations. This no doubt also explains why ‘elite’ universities are so keen to have the post-study work visa reinstated – to keep their main customers (and revenue base) satisfied.

          3. Denis Mollison says:

            I agree it would be wrong if Edinburgh – or any other Scottish university – when faced with a Scot and non-Scot with equal qualifications/promise were rejecting the latter on financial grounds. All I can say is that I would be very surprised if that happens to a significant extent; the colleagues I know would be more likely to prefer the local in that situation. But otherwise, I don’t see the problem: not all students will get into their first-choice university, but that’s true everywhere.

            And on the post-study visas, some may promote them for self-advantage; I just see it as a good thing that we should allow bright young people who’ve chosen to come to Scotland to stay and work here – it must surely be good for our economy, though for me that’s a secondary consideration.

            I think you’re seeing things too much as a zero-sum game: “if we educate more foreign students we must be turning away our own”. I don’t see it that way: over my career we’ve massively increased the numbers of both. The real problem lies in giving better life-chances (including the option of higher education) to the poor/deprived; this is not something that university admission selectors can solve.

          4. Alf Baird says:

            “it must surely be good for our economy”

            I’m afraid I don’t see the vibrant economy in Scotland (or UK) that you evidently do; structurally I see a very weak economy, becoming ever weaker, as the economic data (including trade flows) tells us. This in turn should raise questions about the contribution to our nation of our supposedly ‘world class’ universities. How can a nation simultaneously have ‘world class’ universities and a weak economy? What, then, is the point of having ‘world class’ universities? See: http://www.scottishreview.net/AlfBaird112.shtml

            Moreover, if you look at the staff composition within the hundreds of ‘elite’ university departments/institutes across Scotland, you will see many instances where Scots academics are a minority, especially at senior levels. And if 85% of the postgrads at UoE are not Scots, who do you think will comprise the vast majority of Scotland’s future academics? Combined with long-term frequent recruitment of ‘top’ academics predominantly also from outside Scotland completes the picture: See: http://www.scottishreview.net/AlfBaird61.shtml

            It is entirely understandable that you should take the orthodox university or ‘establishment’ view on this. I don’t, because the evidence tells me the orthodox/establishment view is wrong.

          5. Denis Mollison says:

            Dear Alf

            I think we’re going off-topic here, onto the big questions of what universities are for and how they should be run. I don’t think my views on either are “orthodox” or “establishment”. In particular, I’m less concerned with University Prinicipals coming from outwith Scotland than I am with the whole managerialisation of universities of which over-paid CEO Principals are just the tip of the iceberg.

            More fundamentally I differ from you in being a civic not ethnic nationalist. It’s not where people come from but what they do when they get here that matters. I know some who’ve come from England on sufferance, not liked Scotland, and gone away again; but I know many more who have become enthusiastic parts of Scottish life. I voted for independence in 2014, but asked for my ethnic identity in the census I put “human”.

          6. Alf Baird says:

            Denis, seeking the best for Scots in their own nation, and the removal of long-standing institutional barriers to the development opportunities that Scots face, does not make one an ‘ethnic nationalist’.

            We have reached the stage where Scots academics are today a minority in many departments within Scotland’s universities (e.g. http://www.strath.ac.uk/engineering/navalarchitectureoceanmarineengineering/ourstaff/). It is important to understand why this is the case, why it matters, and what can be done about it. Evidently this seems to matter little to you, though I think to many Scots it does matter.

  21. Walter Hamilton says:

    Forget all the bullshit, there is only two solutions, full fiscal autonomy or better still independence.

  22. Jock campbell says:

    It’s a trap alright…

    On May 7th 2015, the people of Scotland demonstrated their sovereign will via a general election ballot which delivered a 95% majority to the SNP.

    The SNP’s electoral manifesto championed the principles of the Smith Agreement, which means the Scottish electorate voted overwhelmingly in favour of the Smith Agreement’s recommendations by a 95% majority, giving it their sovereign stamp of approval and binding the SNP to deliver the Agreement’s terms.

    The SNP have little choice now but to stand firm on the sovereign demand of the electorate which voted for them. After all, that’s why we voted them to power!

    The UK government meanwhile is duty bound by the terms of the Treaty of Union to honour the sovereign will of the Scottish nation wherever that will does not directly undermine the sovereign rights of the other UK nations.

    Since the Smith Agreement is a demonstration of both Westminster and Holyrood’s acceptance of the Smith Commission’s findings, they cannot now claim that it undermines the other nations’ sovereign rights.

    The result is constitutional checkmate; Westminster MUST accede to the demands of the SNP to deliver -to the letter- the terms of the Smith Agreement.

    If they do not, the union is dead.

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