Politics – Page 266 – The NEN – North Edinburgh News

Lazarowicz: Green technology must be at the heart of economic strategy

Mark Lazarowicz MP is calling on the UK and Scottish Governments to realise fully the potential of the green economy to create skilled, long-term jobs at the same time as tackling climate change and fuel poverty.

In a wide ranging essay for the Scottish Fabian Society, the North and Leith MP says the green economy could draw on existing industrial strengths, pointing to local examples in Edinburgh as well as elsewhere in Scotland.

Mark Lazarowicz (pictured above) said: “The financial crisis graphically illustrated the need to rebalance the Scottish and UK economies and we should place the green economy at the heart of our economic strategy.

“For instance, energy to heat your home should not be a luxury and energy efficiency is one of the most important ways to tackle fuel poverty in the long term as well as climate change.

“Green technology also has the potential to be a major export sector, not just in large-scale manufacture of say, wind turbines, but also of the parts required and project design where Scotland already has a wealth of expertise.

“It’s much more than a niche industry: with new rules on recycling and targets for cutting carbon emissions we have to green our economy and Scotland should be leading not lagging behind.”

The MP’s article appears in a new collection of essays by Scottish Labour MPs setting out policy alternatives for a new future for Scotland. It can be found at

http://www.scottishfabians.org.uk/publications/

Budget 2014: Rich rewards?

All Budgets are political, but some are more political than others and George Osborne’s Budget speech yesterday was clearly looking ahead to the next General Election – with half an eye on the Scottish Referendum too.

With the economy growing faster than forecast, unemployment falling and business confidence growing, Britain may not be booming but the worst of a deep recession is clearly behind us and a confident Chancellor took the opportunity to reward the ‘makers, the doers and the savers’.

The Chancellor expressed particular sympathy for those with savings and pensioners, who he said had suffered most during the long recession – and many of whom, incidentally, would be natural Conservative voters.

The main points of the Budget were a new Pensioner Bond savings scheme offering up to 4% interest and a new single ISA with an annual tax-free savings limit of £15,000. Those ‘hard-working families’ so beloved of the politicians were supported too – the amount workers earn before income tax will go up by £500 to £10,500 and this comes on the back of extra funding for childcare support announced on Tuesday.

Other headline-grabbers include a 1p cut in beer duty with no increase on spirits or cider, and Bingo tax halved from 20% to 10%. Inevitably smokers will be asked to cough up more – cigarettes go up by 2% above inflation.

Predictably there has been a mixed reaction to the Budget statement.

Responding to Osborne’s statement, Labour leader Ed Miliband said the Budget ‘confirms people are worse off under the Tories. A worse off budget, from an out-of-touch Chancellor.’

Mr Miliband said: “The Chancellor spoke for nearly an hour. But he did not mention one central fact: the working people of Britain are worse off under the Tories.

“Living standards down: month after month, year after year.2011 – living standards down. 2012 – living standards down. 2013 – living standards down. And since the election working people’s living standards £1,600 a year – down.

You’re worse off under the Tories. Their 2010 manifesto promised: “An economy where…[people’s] standard of living…rises steadily and sustainably”. But they have delivered exactly the opposite. Standards of living not rising steadily and sustainably, but falling sharply and steeply.

And today the Chancellor simply reminded people of the gap between the Chancellor’s rhetoric and the reality of peoples’ lives. Living standards falling for 44 out of 45 months under this Prime Minister – unmatched since records began. No amount of smoke and mirrors today can hide it.

We already know the answer to the question millions of people will be asking in 2015: “Are they better off now than they were five years ago?” The answer is no. Worse off. Much worse off. Worse off under the Tories.”

Miliband said the Budget was the ‘same old Tory trick – a classic Tory con. Give with one hand and take far more away with another’. He went on: “The Chancellor painted a picture of the country today that millions of people simply will not recognise. Because this is Cameron’s Britain 2014: 350,000 people going to food banks, 400,000 disabled people paying the Bedroom Tax, 1 million more people paying 40p tax, 4.6 million families facing cuts to tax credits.

“But there is one group who are better off. Much better off. We all know who they are. The Chancellor’s chums. The Prime Minister’s friends. The Prime Minister rolls his eyes, he doesn’t want to talk about the millionaire’s tax cut. No mention of it in the Budget speech – the beneficiaries of this year’s millionaire’s tax cut.”

Scotland’s Finance Secretary John Swinney said the Chancellor’s Budget ‘fails to deliver for Scotland.’ and said that independence is the only way Scotland can properly create opportunities and secure the investment in public services and the economy Scotland needs.

Commenting on the Chancellor’s Budget, John Swinney said: “Scotland is a wealthy country and we can more than afford to be independent. In each of the last 33 years Scotland has paid more in tax per head than the UK and in the last five years Scotland would be £1600 per head better off than the UK – money that could have been invested in the economy, in public services and reducing debts.

“This was Westminster’s last chance to show it could create opportunity for Scotland and reject the diet of austerity. Once again Westminster has failed to deliver for Scotland. This budget confirms a further squeeze on public spending and a further austerity plan.

“The £63m added to the Scottish budget today is small beer compared to the significant cuts Scotland has faced since 2010. The Chancellor is planning a further £37 billion of cuts across the UK over the next two years and tens of billions to come afterwards. These cuts would be worse still if Scotland does not vote for independence and Westminster takes the knife to the Barnett formula.

“The reality is Westminster has presided over the weakest recovery in living memory, and since the downturn began the UK has had the weakest performance of any G7 country outside of Italy.

“UK public sector debt is now set to reach £1.5 trillion, its highest level in history, confirming that the Chancellor’s economic strategy has failed.

“Despite the Chancellor’s claims of improved economic performance by the end of next year, the UK economy is now expected to have grown by 5% less than he projected when he first came to office – forcing him to borrow an additional £190bn beyond his original forecast.”

The Finance Secretary continued: “While I welcome the Chancellor’s choice of whisky as his referendum tipple, sticking with the Westminster system will leave Scotland with a severe hangover. The changes on APD simply do not go far enough to solve the problems faced in Scotland and with independence we will reduce rates of APD by 50% with a view to abolishing them completely when conditions allow.

“Help for savers and pensioners is long overdue but with real incomes being squeezed very few families in Scotland will be able to take full advantage of what is on offer.

“And with the welfare cap set to include pensions credit and savings credit which currently offer real help to poorer pensioners and will continue in an independent Scotland the Chancellor’s claims to protect pensioners do not stack up.”

Commenting on the latest projections from the Office of Budget Responsibility and the Chancellor’s claims on North Sea oil, Mr Swinney added: “Westminster and those opposed to independence cannot simultaneously accept in full the Wood Report with its projections of higher production and at the same time cite the OBR forecasts of lower revenues from declining production.

“Increased investment in the North Sea will lead to increased production with a further 24 bn barrels of oil still to come from the North Sea.

“The Scottish Government has shown the progress that can be made in Scotland with the few powers we currently have. Figures today show Scotland is continuing to outperform the UK across all headline labour market indicators, with a lower unemployment rate, higher employment rate and lower economic inactivity rate. In addition, the latest surveys show business is both investing in Scotland and hiring in Scotland.

“In just under six months’ time voters in Scotland can choose to put all the decisions on taxation, spending and job-creation in the hands of the people of Scotland, not Westminster politicians, build on our success and escape from the poor decisions of Westminster governments we didn’t elect.”

Childcare charities have welcomed the extra support to working families, but they claim it has shown the Government has continued to fail to put children at the centre of spending decisions.

Dr Hilary Emery, chief executive of the National Children’s Bureau said: “Today’s Budget is not that of a Government aspiring to make our country the best for children to grow up in. While NCB welcomes commitments to assist families with the costs of childcare and to extend the pupil premium to early childhood services, we are concerned that the Government is again taking a piecemeal approach, failing to put children at the heart of spending decisions.

“For childcare to make a difference to the life chances of vulnerable children, it must be good quality. So, it is vital that the early years pupil premium raises the quality of childcare – increasing levels of staff qualifications, securing strong leadership and providing support for children with additional needs.”

The Child Poverty Action Group said: “We responded positively to announcements of increased investment in childcare cost support through Universal Credit. But we believe that overall the Budget has done too little to help families and will lock-in austerity cuts for the long-term.

“Shortly before the Budget, we published research that helps shed light on the likely consequences of the Chancellor’s new ‘welfare cap’, which will set a ceiling on support for families, single parents, disabled people and carers. It will affect social security, benefits and tax credits for those groups and will mean that any future governments will play of these groups needs against each other in a zero-sum game. We believe it will tie the hands of future governments, making it almost impossible for them to take direct measures to reduce child poverty as part of their child poverty strategy.

“We have also highlighted in our press statement how the cumulative effect of all the Coalition’s budgets is largely regressive. The poorest are the worst affected, whilst many people in the wealthier half of the population have actually been made better off as a net effect of all measures due to the size of tax cuts they have received relative to the impact of cuts on them.”

Scottish Secretary Alistair Carmichael argued that the Budget emphasises that Scotland’s economy is successful and stronger as part of the UK.

The Secretary of State for Scotland said: “The Budget means the consequences of our referendum decision are becoming clearer. Do we want to gamble our place in a UK that is working well for Scotland in return for a go-it-alone option with no UK Pound and falling oil revenues?

“We can decide to remain part of a strong United Kingdom. Scotland would be staying part of a fast growing UK economy. We would be sticking with a UK that is creating more jobs, increasing spending in Scotland and keeping our UK Pound in our pocket. A Scotland where we share opportunities and risk with all other parts of the UK.

“Or we could choose to walk away from the UK. We could stop sharing with the rest of the UK and gamble on a Scotland that goes it alone. This would be a Scotland without the UK Pound. A Scotland with volatile and falling oil revenues, with higher costs and with our big companies looking to leave. We would be turning the rest of the UK into our biggest competitor. We would be turning to 28 different EU governments for negotiations on Scotland’s future. The consequences are clearer. The decision is ours.”

The Trades Union Congress say that the Budget is ‘ a short-term Budget to shrink the state and help the rich’.

TUC General Secretary Frances O’Grady said: “This was a pre-election Budget, with its give-aways aimed at the better off rather than lifting the living standards of the many. It will be paid for by further years of austerity, public services brought to near collapse, public sector pay cuts and a welfare cap that bites into the safety net that any of us might need.

“There was nothing for the young who continue to face the worst job market in decades and unaffordable housing.
“Nor was there any relief for low and middle earners who, after years of falling living standards, have no spare cash to take advantage of the help for savers, and who now face year on year cuts in benefits for working families as the welfare cap bites.

“The best news for the long-term health of the economy is the genuine help for manufacturing, but it was the exception in this highly political short-term Budget that continued the Chancellor’s project to shrink the state and help the rich.”

However employers’ organisation the CBI gave the Budget the ‘thumbs-up’. CBI’s Chief Policy Director Katja Hall said: “The Budget will put wind in the sails of business investment, especially for manufacturers. This was a make or break budget coming at a critical time in the recovery and the Chancellor has focussed his firepower on areas that have the potential to lock in growth.

“It’s encouraging to see higher than expected growth in the short-term, but as the Chancellor recognised, tough challenges remain ahead, so it’s right that the Budget reflected the fiscal reality. The economy needs to rebalance and this Budget will help businesses hungry to invest and export.”

Taxing times: Osborne ready to deliver Budget

It’s Budget Day, and there’s no shortage of advice for Chancellor George Osborne ahead of today’s financial statement. The TUC says the Budget must address the UK’s growing investment gap, while Holyrood Finance Secretary John Swinney says Osborne’s ‘last chance’ Budget will mean more cuts in Scotland.

The TUC says the gap between current investment levels (14.5 per cent of GDP) and those originally forecast by the Office for Budget Responsibility (17.8 per cent) has grown to £12.4bn a quarter – a gap of almost £50bn. They maintain this has held back the UK economy and, unless addressed, could cause permanent damage to its economic prospects. The TUC’s Budget submission calls for a number of changes to boost investment, including:

Increasing the scope of the UK Guarantees scheme to match the scale of Help to Buy (which could also be scaled back by being limited to first-time buyers)
Bringing forward infrastructure projects scheduled for the next Parliament so projects could start in the next year or two, and;
Cancelling scheduled cuts to corporation tax and reinvesting the money into capital allowances to promote business investment.

TUC General Secretary Frances O’Grady said: “For decades our economy has suffered from over-consumption and under-investment. The Chancellor promised to address this failure but instead has presided over a growing investment gap that has held back growth and which risks causing permanent economic damage. He now has the chance to put things right.

“George Osborne can start to undo the damage caused by slashing capital spending by giving greater financial guarantees to infrastructure projects. This should encourage firms to crack on with the construction of much-needed homes, schools and transport routes.

“The Chancellor should also admit that the billions given away in corporation tax cuts have failed to spur investment. Future cuts should be cancelled and reinvested in more generous capital allowances. After four years of ineffective initiatives, now is the time to start making good on the government’s promise to rebalance the economy.”

With working people still suffering the longest real wage squeeze in over a century, the TUC Budget submission also calls on the Chancellor to halt the squeeze on working families and encourage firms to give their staff a pay rise. The TUC argues that the Chancellor should abandon shifting the personal allowance and higher rate tax thresholds and instead reverse cuts to tax credits and universal credit that are hitting working families on low and middle incomes.

Frances O’Grady went on: “The Chancellor has made Britain’s living standards crisis even worse for working families by cutting vital tax credits and child benefit at the same time as time as wages have shrunk in real terms.

“He has shown contempt for public sector workers by prolonging their wage squeeze even as the economy recovers. Damaging welfare cuts are also adding to the financial woes of hard-pressed working families and must be reversed.
“The one thing guaranteed to cheer working people would be a bigger salary. The Chancellor must do all he can this week to encourage firms to give Britain a pay rise. One way of doing this would be to encourage greater take-up of the living wage.”

This is the last UK Budget before the referendum on Scottish independence, and Scottish Finance Secretary John Swinney said: “This is Westminster’s last chance to seriously tackle inequality and turn away from a budget of continued cuts and austerity before Scotland votes in the referendum.

“Scotland is a wealthy country and we can more than afford to be independent. In each of the last 33 years Scotland has paid more in tax per head than the UK and in the last five years Scotland would be £1600 per head better off than the UK – money that could have been invested in the economy, in public services and reducing debts.

“Instead under Westminster we have seen capital spending cut by almost 27% and our overall discretionary spending power cut by 11% in real terms over the five years to 2015-16.

“We know that we are not even halfway through the cuts planned by Westminster, and that the Chancellor plans a further £12bn of cuts to welfare after the next election. It is also clear that if Scotland sticks with the UK system we could see the scrapping of the Barnett Formula which could result in a further £4bn cut specifically from Scotland’s public services.

“In just under six months’ time the people of Scotland will vote to decide whether budget decisions should continue to be made by Westminster governments Scotland didn’t elect or whether decisions about spending, taxes and public services in Scotland would be better made by the people and parliament of Scotland. Following a vote for independence we can end Westminster’s austerity agenda, tackle the economic challenges Scotland faces and build a fairer more prosperous country.”

Will George Osborne be listening? All will become clear – well, maybe clearer – when the Chancellor delivers his fifth Budget speech at 12.30 today.

Six months to go: gamble or golden opportunity?

With just six months to go until Scotland’s date with destiny the politicians have been having their say once again. To varying degrees the Better Together parties – Conservative, Labour and the Lib Dems – all now support the granting of further powers to the Scottish Parliament, the ‘Devo Max’ option, but the SNP and Greens argue that Scotland can only fulfill it’s potential through independence.

Prime Minister David Cameron told the Conservative Party conference in Edinburgh last weekend: “A vote for No is not a vote for no change. We are committed to making devolution work better still – not because we want to give Alex Salmond a consolation prize if Scotland votes No, but because it’s the right thing to do. Giving the Scottish Parliament greater responsibility for raising more of the money it spends – that’s what Ruth (Davidson) believes, and I believe it too.”

The prime minister added: “Here’s the re-cap. Vote ‘Yes’ – that is total separation. Vote ‘No’ – that can mean further devolution, more power to the Scottish people and their parliament, but with the crucial insurance policy that comes with being part of the UK.”

He was supported today by Scottish Secretary Alistair Carmichael, who said: “With just six months to go until voters make their choice in the Scottish independence referendum, voters need to remember that a referendum is not like an election. You cannot change your mind in five years’ time if you do not like the choice you make. Once the union with England, Wales and Northern Ireland has been unpicked there will be no going back.

“The UK has been the most successful social, political and economic union that the world has ever seen. The decision to end it is not one that any sensible person would want to take lightly.

“It’s important to realise that a vote for independence is a gamble – there are simply too many unanswered questions, particularly regarding currency, pensions and the economy. Why would anyone want to leave a successful union – which has helped Scotland prosper for generations – for such an uncertain future?

“That’s why, as a Scot, I appeal to all voters to get the facts and consider what is best for our future. And we also need to remember that it’s not just our future which is at stake – what kind of Scotland do we want our children and grandchildren to inherit?”

Scottish Labour chose to launch their devolution commission findings today. Introducing the report, Leader Johann Lamont said: “I set up Scottish Labour’s devolution commission because it was clear that while the majority of Scots want to stay part of the United Kingdom, they want a stronger Scottish Parliament.

“With colleagues from Holyrood, Westminster, the European Parliament, local government, the trade unions and party members, I wanted to have a debate about where power should best lie to serve the people of Scotland, so I am pleased to publish our plans to strengthen devolution today before putting them to our party conference on Friday.

“The commission has worked hard to ensure that our proposals are consistent with Scotland remaining strong in the United Kingdom but also give us the flexibility to do things differently where we want to.

“We have engaged widely with business, trade unions, academics and constitutional experts and believe this is the most comprehensive package of devolution while also allowing Scotland the security and certainty of the United Kingdom.

“I believe it will make our parliament more accountable and more progressive. We also want to see power devolved from Holyrood down to local government and our communities.

“Labour should be proud of our record on devolution. It was a Labour Government that brought about the Scottish Parliament 15 years ago and we initiated the Calman process which resulted in greater tax and borrowing powers for Holyrood through the Scotland Act.

“With six months to go until Scotland decides on its future, our devolution proposals set out part of our positive alternative to the narrow politics of nationalism. Labour has always been the party of change, and we will change Scotland for the better.”

However ‘Yes Scotland’ supporters argue that the changes being proposed by the Unionist parties do not go far enough and will not solve Scotland’s problems.

Deputy First Minister Nicola Sturgeon said a ‘No’ vote would mean handing control “straight back to Westminster” and she gave six reasons why Scotland should vote for independence: more jobs, control of taxes, protecting the NHS, not ending up with Conservative governments we don’t vote for, the prospect of retiring later than south of the Border and the creation of an oil fund to make the most of Scotland’s North Sea resources.

“Today I am setting out six reasons for Yes with six months to go,” Ms Sturgeon said. “The referendum is a choice between taking Scotland’s future into Scotland’s hands or leaving our future in the hands of an out-of-touch Westminster establishment.

“The No campaign call themselves Project Fear but we have seen a move to Project Threat in recent days with increasingly over-the-top comments. So it’s no wonder that support for Yes continues to advance in the polls while the No campaign has stalled, with a swing of only around 5 per cent now needed to secure a Yes vote.”

Scottish Green Party leader Patrick Harvie also believes that a ‘yes’ vote could transform Scotland. He said: “I urge those who are as yet undecided to seize the opportunity to challenge both sides in this debate, and consider whether a Yes or a No gives the best chance of transforming Scotland into the more equal, more sustainable and more democratic society we’re capable of becoming.

“Green Yes campaigners are reaching out to communities across Scotland. For us a Yes vote gives the best chance of achieving the kind of Scotland where wealth is more fairly shared, where nuclear weapons have no place and where communities have real power.”

Money, money, money set to dominate indy debate

The ongoing row about currency and the economy seem likely to dominate the independence debate again this week . The UK government will meet in Scotland, where the Prime Minister will again press the economic case for the Union, but ahead of the visit the SNP is urging HM Treasury to think again over currency union.

Speaking ahead of this week’s Cabinet meeting in Scotland, the Prime Minister said: “Two weeks ago I gave a speech setting out why I believe Scotland should remain part of the UK. In that speech I spoke about our long-term economic plan to move from a country sinking under too much debt to one that is dynamic, innovative and creating thousands of jobs for people right across our country.

“The plan is working. Last year the economy grew by the fastest annual rate since the financial crisis, we have the highest number of UK businesses on record and we have cut taxes for 25 million people.

“And last week we saw that 1.3 million more people are now in jobs across the whole UK compared with 2010 – that’s 1.3 million more people with the security of a monthly pay packet and the peace of mind that brings.

“This week I will take the Cabinet to Scotland where we will set out how the UK government can maximise the benefit of North Sea oil and gas to the UK economy for decades into the future, giving a vital boost to local communities and families across Scotland.

“For the past 300 years, Britain has led the way in finding new sources of energy. It is the strength of the UK’s broad based economy, which can make the difference and ensure we can invest in our energy for the long-term future.

“I promise we will continue to use the UK’s broad shoulders to invest in this vital industry so we can attract businesses, create jobs, develop new skills in our young people and ensure we can compete in the global race.”

While Mr Cameron emphasises the advantages of being better together – and his Chancellor has firmly ruled out a currency union – the Scottish Government maintains that, if Scotland does vote ‘yes’ in September, a currency union would be the best way forward for both Scotland and the rest of the UK. Scottish Finance Secretary John Swinney says any other settlement would have a ‘devastating impact of debt’ for the rest of the UK.

In the event if independence The Scottish Government will ‘negotiate with Westminster to agree a fair share of assets and liabilities that is fair, equitable and reflective of Scottish needs and those of the rest of the UK’.

However, following the warnings from academic Prof Christine Bell of Edinburgh University that “if the remainder of the UK keeps the name and status of the UK under international law it keeps its liabilities for the debt”, Mr Swinney has published an analysis of the implications such an approach by the UK Government would have for debt payments for the rest of the UK.

The paper shows that if the UK Government put itself in a position of having to accept all UK debts – which it has already accepted legal liability for – the rest of the UK would be responsible for:

Up to an additional £130 billion of debt,
between £4 billion and £5.5 billion a year in additional interest payments, equivalent to increasing the basic rate of income tax in the rest of the UK by one pence.

Finance Secretary John Swinney said: “The Scottish Government has consistently proposed that following a vote for independence we reach agreement with the rest of the UK on a fair share of assets and liabilities, including the Bank of England which holds a third of UK public sector debt.

“That is the fair, reasonable and responsible approach we continue to put forward. However, people in the rest of the UK deserve to know the logical consequences of the position the Westminster government are taking.

“The Treasury has claimed that the UK would be the continuing state with exclusive access to the role and responsibilities of the Bank of England. If you follow that argument to its logical conclusion then it is also responsible for the entire debt liability – which could mean the rest of the UK taking on additional debts of up to £130 billion.

“That would result in debt servicing costs of the rest of the United Kingdom increasing by between £4 billion and £5.5 billion each year – a devastating impact which would be the equivalent of increasing the basic rate of income tax by one pence.

“That would represent a significant and unnecessary cost to taxpayers in England, Wales and Northern Ireland when, as part of the proposals we have put forward, an independent Scotland would be quite happy to pay our fair share of UK debts as part of negotiated arrangements, which would include participation in a Sterling zone

“This is just one of the reasons, alongside the costs that rejecting a currency area would impose on business in the rest of the UK, that the Treasury will drop this bluff and bluster the minute the campaign is over.”

Gloves come off over currency union

A currency union in the event of a vote for independence ‘would not be in the interests of either the people of Scotland or the remaining UK’, Chancellor of the Exchequer George Osborne told an Edinburgh audience on Thursday. Unsurprisingly his claims have been rubbished by supporters of independence, but while the two sides disagree over currency union, one thing is clear – the gloves are well and truly off …

Mr Osborne’s speech follows official Treasury advice that in the event of independence they would not recommend a currency union to the Government of the continuing UK, and in an unusual departure from procedure he also published the advice he received from the Treasury Permanent Secretary on whether to join a currency union should Scotland become independent.

Speaking at the Point Hotel on Thursday, the Chancellor said: “I hope passionately that the people of Scotland choose to stay within our family of nations in the United Kingdom. I want Scotland to keep the pound and the economic security that it brings. But it is clear to me I could not as Chancellor recommend that we could share the pound with an independent Scotland. The evidence shows it wouldn’t work. It would cost jobs and cost money and wouldn’t provide economic security for Scotland or for the rest of the UK.I don’t think any other Chancellor of the Exchequer would come to a different view.

“The Scottish government says that if Scotland becomes independent there will be a currency union and Scotland will share the pound. People need to know – that is not going to happen.”

The Treasury also published the detailed analysis on the economics of a currency union which underpins its advice to the Chancellor. The paper states that while the United Kingdom is one of the most successful monetary, fiscal and political unions in history, the fiscal and financial risks of entering into a currency union with a separate Scottish state would be too great.

The analysis states:

UK is a successful union because taxation, spending, monetary policy and financial stability policy are coordinated across the whole UK, with risks pooled and clear political accountability

Scotland’s economy would be more exposed in the event of independence, with greater risks from shocks in the financial and energy sectors
in a currency union, the continuing UK would be exposed to much greater risk from a separate Scotland, with the possibility of continuing UK taxpayers being asked to support that state in the event of a fiscal or financial shock
if people in Scotland vote for independence, the Treasury would advise the continuing UK Government against entering into a currency union with an independent Scotland

The Chancellor’s view was supported by the finance spokespersons of both the other main Westminster parties.

The announcement was also welcomed by the Better Together campaign. Former Chancellor Alistair Darling, who leads the campaign, said: “If we vote to leave the UK in September, Scotland will not be able to keep the pound. That is the message Scotland must keep in mind when deciding how to vote. This was the day on which Alex Salmond’s bluff and bluster about independence came face to face with reality.

“Why would taxpayers in England want to bail out the banks of what would be a foreign country? Why would a continuing UK Treasury accept a veto from what would be a foreign government over tax, spending and borrowing?

“And why would Scotland agree to have its budget subject to a veto by the rest of the UK? That’s how a currency union works. You only have to look at the problems of the eurozone to see that. It makes little sense. Yet everything about the First Minister’s case for breaking up the UK rests on keeping the pound. The jobs of thousands of Scots in our financial services industry depend on using the pound. Without the pound, all of these are at risk. That is a big gamble we simply don’t have to take.”

The Better Together campaign called on Yes Scotland to explain what currency Scotland would use if we vote to leave the UK – would we join the euro, or maybe even set up a new, separate currency? Put simply, if yer no’ gettin’ the pound, what’s your Plan B?

Calling for clarity, Better Together campaign director Blair McDougall said:

“The nationalists have been in chaos on currency over the last few days. Alex Salmond is a man without a plan. First he says we will keep the Pound, even though it is now clearly off the table. Now Yes Scotland tell us we can keep the Pound without a formal agreement, even though the SNP’s own Fiscal Commission Working Group ruled this out. And Patrick Harvie, a Yes Scotland board member, today said that Alex Salmond needs to set out an alternative to the Pound.

“It is time they got their line straight. If Plan B really is the Panama plan that would mean if something like the collapse of RBS happened again a crisis would become a disaster in an independent Scotland.

“Leaving the UK and losing the Pound would mean higher mortgage repayments, more expensive credit card bills and a big risk to thousands of jobs in our financial services industry. Alex Salmond is gambling with the livelihoods of the people of Scotland.

“The message from those of us who support Scotland remaining in the UK is very simple – a vote for separation is a vote to lose the Pound. The only way to keep the Pound is to stay in the UK.”

However, supporters of independence have cast doubt on the Chancellor’s assertions. First Minister Alex Salmond accused Mr Osborne of ‘bluff, bluster and bullying’ and former Labour Scottish First Minister Henry McLeish also expressed concern over Osborne’s ‘misguided’ intervention, saying the Chancellor’s heavy-handed tactics could push more Scots into voting Yes.

Mr McLeish said: “He is basically saying vote yes and we won’t allow you to join a currency union. We will withdraw any goodwill and sacrifice the best interests of Scotland, England, Northern Ireland and Wales.

“Do we really believe that would be the response if Scotland voted to exit the Union? I don’t think so. Wisdom and sanity would return. It would help if the Union would spell out their vision, provide an alternative to independence and offer a bit more carrot and less stick to Scots voters.

“Let’s remember that Osborne’s party want to take us out of the EU. It is the Union that is on trial, not Scotland. Creating a currency union is first and foremost a political decision, not a financial or technical one.

The UK and Scotland would have to settle the politics of this in their respective parliaments or at the polls, so the people of England, Wales and Northern Ireland could have a say in this significant decision.”

Scottish Finance Secretary John Swinney maintains that an independent Scotland will continue to use the pound as it is in the best interests of Scotland and the rest of the UK .

Responding to the Chancellor’s comments on a currency union, the Finance Secretary said that the Treasury analysis has been developed without any discussion with the Scottish Government – and without acknowledging the independent expert work of the Fiscal Commission Working Group (FCWG).

The Scottish Government last year published comprehensive analysis of the different currency options available to an independent Scotland. This analysis by the Fiscal Commission Working Group, consisting of four pre-eminent economists including two Nobel laureates, considered the full range of options and concluded that a monetary union would be in the best interests of Scotland and the rest of the UK.

The Fiscal Commission provided advice on:

Banking union
Risk sharing
Monetary and exchange rate policy
Duration of a currency union

The HM Treasury has had no discussion with the Scottish Government on any of these points.

Responding to the Chancellor’s comments, Mr Swinney said:

“We welcome the opportunity to continue the debate with the Chancellor on the merits of our proposals on a currency union.

“However the Chancellor made clear his conclusions on currency union were based on the advice of Treasury officials. That advice is incomplete and with regard to the size of the Scottish financial sector and operation of monetary unions is backward looking and takes no account of the comprehensive evidence provided by the independent economic experts of the Fiscal Commission, including two Nobel laureates, Professor James Mirrlees and Professor Joseph Stiglitz.

“On every one of the four points the Chancellor rehearsed today, the FCWG have already published comprehensive advice and analysis and their proposed macroeconomic framework is a workable model that would ensure financial stability and allow both governments autonomy over economic and social policies, including fiscal policy. In addition the Governor of the Bank of England has confirmed the Bank will deliver a currency union if agreed by both Governments.

“On the banking union: no country should have to bail out banks again. Across the EU and UK recent regulation has been designed to break the link between taxpayers and banks. The Treasury hugely overstates the size of the banking sector in Scotland which is in line with the rest of the UK. It is the City of London which is hugely reliant on the financial services sector, accounting for 50 per cent of UK financial services GVA. A banking union with an independent Scotland is in the interests of the rest of the UK as the sector benefits from integrated trade.

“On fiscal risk sharing: Scotland’s fiscal position is stronger than that of the UK. An independent Scotland would have had the opportunity to spend more, tax less, invest in an oil fund and still borrow proportionally less than the UK. The Fiscal Commission proposition ensures a harmonised system for financial regulation and resolution of banks. Scotland would take its fair share of responsibility recognising that ‘both Scotland and the UK have a shared interest in ensuring financial stability’.

“On monetary and exchange rate policy: Scotland would have full fiscal and economic freedom to set taxes and economic policy, as has been shown by many countries in the different currency unions which have operated internationally.

“And on permanence; all Sovereign states have the ability to determine currency arrangements that are appropriate for their circumstances. That is not a barrier to successful currency unions.

“The model proposed by the Fiscal Commission Working Group has not been considered and the Chancellor’s statement today is political and completely counter to the spirit of the Edinburgh Agreement, which commits both Governments to working in the best interests of both countries whatever the result of the referendum.

“If the UK Government is to honour its commitment to the terms of the Edinburgh Agreement, the discussion that the Chancellor has entered into today must be informed by the best evidence available. The Fiscal Commission have recommended early engagement between the Scottish and UK Government to properly address these critical issues. The gaps in the Chancellor’s analysis demonstrates the force of that recommendation.”

So there you have the two sides of the currency union divide. The Unionists say it can’t and won’t happen, the Nationalists say it can and it will. Political panic over narrowing poll leads, or a pie in the sky economic gamble?

You pays your money, you takes your choice. For now at least, that money is sterling.

YES campaign comes to Craigroyston

Yes Edinburgh North & Leith and Yes Edinburgh West are hosting a community event to present the case for a ‘Yes’ vote in the forthcoming referendum at Craigroyston Community High School tomorrow (Thursday) evening at 7.30pm.

Confirmed speakers are Fiona Hyslop MSP, Robin McAlpine (Reid Foundation), Michelle Thomson (Women4Independence) and SSP national co-spokesperson Colin Fox, and the event – which includes a question and answer and discussion session – will be chaired by former Lothian Region Council leader (and former Pilton Partnership manager) John Mulvey.

All welcome, doors open 7.15pm.

While the Craigroyston event will focus on the case for a YES vote on 18 September, the Better Together campaign advances the argument for a different future for Scotland. To find out more about the case for staying together and information about local events and activities, visit the Better Together Edinburgh Facebook page or go to www.bettertogether.net

Seasonal food for thought …

Politicians praise voluntary sector efforts to tackle food poverty in struggling communities

The Cabinet Secretary for Finance, Employment and Sustainable Growth John Swinney has praised the essential work of the voluntary sector at Christmas during a tour of Transform Community Development’s new-look Dundee premises.

Through its work with national charity FareShare the Dundee project aims to reduce food poverty and offers training and volunteering opportunities to service users and local people in the community.

During the visit Mr Swinney saw first-hand the efforts of the third sector organisation which provides balanced meals and shelter to homeless and vulnerable people in the city, before going on to tour the Jessie Devlin Hostel, one of Transform’s residential and sheltered housing accommodation for vulnerable people.

He said: “Christmas should be a time for fun and festivities but it can be tough for people across the country who are living in poverty.

“The Scottish Government is committed to tackling and preventing homelessness. Official statistics published last month revealed fewer people are becoming homeless in Scotland, with a 14 per cent decrease of households living in temporary accommodation at the end of June compared with 2013.

“Transform’s work on Zero Waste Scotland’s Love Food Hate Waste campaign complements what they are doing with FareShare as it’s all about making the most of the food we have.

“Social enterprises, voluntary organisations and community organisations play an important part in Scottish society. They deliver superb services and help to connect with the most vulnerable people in our communities, which is especially important during the festive period which can be a particularly difficult time of year.

“It was an honour to meet the people who run and use Transform’s FareShare scheme and sheltered accommodation. Such excellent projects just show how charities can work in partnership with retailers like Asda and cut down on food waste and feed those in need at the same time.”

The charity collects donations of fresh fruit, vegetables, meat and dairy products from suppliers and retailers like Brakes, Nestle and Asda then hands them out to disadvantaged groups in the area.

The food, which would otherwise end up in landfill because of packaging errors, over production or short shelf lives, is redistributed to those in need in Dundee, Perth, Kinross and Angus.

Transform Community Development Trust’s CEO Simon Laidlaw said: “We have been involved with FareShare since it began and are extremely proud of what it achieves.

“In particular in times of austerity and public sector cuts it is good to be able to assist other voluntary organisations, taking some pressure off and enabling them to enhance the services they provide for vulnerable people.

“With food poverty on the increase it makes sense that we should be working with the industry to ensure that no good food goes to waste and that those in need get the benefit.”

Asda’s Scottish Corporate Affairs Manager Polly Jones, said: “With over 60 Asda stores in Scotland, even a couple of extra cases of food here and there can quickly add up to hundreds of tonnes of surplus stock. By working with FareShare we can ensure this good quality food doesn’t go to waste.

“Asda’s contribution provides 3.6 million meals for the good causes FareShare supports, helping to alleviate food poverty and saving the charities money to invest in essential services. The partnership is a simple and practical way for Asda to turn an environmental problem into a real benefit for the communities we serve.”

Edinburgh North and Leith MP has also highlighted the food poverty plight faced by many Scots families over Christmas.

Following a debate in Westminster called by the Labour Opposition on food banks, Mark Lazarowicz MP has highlighted that many ordinary Scots face crisis this Christmas due to the shocking increase in food poverty.

He pointed to the dramatic growth not just in food banks but all forms of help such as food vans and soup kitchens in Edinburgh and the rest of Scotland over the last two years as a response to real need amongst ordinary families struggling to put food on the table.

Speaking after the packed debate, Mark said: “In just two years the number of food banks in Scotland operated by the Trussell Trust, the main food bank charity, has dramatically increased from just one to forty-three today, with two more being planned in Edinburgh alone.

“But that’s just the tip of the iceberg with many other people either going without or getting into debt to get through the week.”

“The Government’s stock response is to point to all it is doing to support ordinary families but if so why has the scale of need grown so rapidly? According to Citizens Advice Scotland, half of those who use food banks are actually in work but their wages can’t keep pace with the cost of living – three-quarters of the rest turn to them because of delays in their benefits or changes to the benefit system introduced by the Government.

“I pay tribute to the civic responsibility and compassion of the volunteers and staff who run food banks and food vans but it’s a tragedy they are needed and needed they definitely are – not least because of Government policy.”

The North & Leith MP called for a thorough examination by the Government of why so many people need help followed by a major policy rethink if Citizens Advice Scotland and the Trussell Trust are proved right that Government policies are a key contributing factor.

At this time last year, the Prime Minister claimed that the growth in food banks was an expression of the big society. More recently, his Education Secretary has suggested that more people are turning to food banks because they are unable to manage their finances properly.

That is not borne out by either the findings of the Trussell Trust or a study produced by Citizens Advice Scotland tracking those they referred to food banks. Both pointed to the difficulty of in-work households in meeting basic bills because of low wages and the rising cost of living coupled with benefit delays and changes to the benefit system introduced by the Government as the main explanations.

Scotland’s Future: Cabinet to answer questions at EICC event

Over 300 people from organisations across civic Scotland will meet in Edinburgh today to put questions to the Cabinet about Scotland’s Future.

The Scottish Government has invited hundreds of people – from large and small businesses, trade unions, the voluntary and public sector, charities and other Scottish organisations to the event at the EICC.

The Scottish Government says it wants to provide as much information as possible to allow people in Scotland to make an informed choice in next year’s referendum. This event will see Cabinet ministers answer any questions Scotland’s key organisations might have about the detail in Scotland’s Future, and any issues they would like more information on.

The event will also be broadcast live online so anyone can watch.

Speaking yesterday, First Minister Alex Salmond said: “The publication of Scotland’s Future marks a significant moment in the referendum campaign as we set out a detailed prospectus for an independent Scotland, providing answers to the host of reasonable questions people have about the what a vote for independence will mean and the opportunities that will flow from that.

“We have a responsibility to provide as much information as possible to the people who will cast their vote in the referendum, allowing them to make an informed choice about the future of their country. This major event, bringing together representatives of Scotland’s key trade union, business, voluntary and public sector bodies, presents an ideal opportunity to do exactly that and my Cabinet colleagues and I are thoroughly looking forward to it.”

Reliance on food banks show that the economy’s not working – Larazowicz

Edinburgh North and Leith MP Mark Lazarowicz says the growing number of families turning to food banks for help is an indictment of the Chancellor’s autumn statement claim that his ‘economic plan is working.’

The MP recently helped local church volunteers from the Leith Food Bank with a food collection at Tesco in Leith. The food collection was organised in conjunction with food bank charity the Trussell Trust and food redistribution charity FareShare. Tesco donated an extra 30% to the food bank, on top of the goods given by customers.

Mark Lazarowicz said: “The Chancellor’s economic plan is certainly not working for the families who will be forced to look to food banks for help this Christmas. Initiatives like this one in Leith show the strength of community spirit here in Edinburgh but it is an indictment that they should be needed at all.

“The Chancellor talked of ‘difficult decisions’ on spending and ‘living within our means’– parents struggling to meet fuel and food bills are all too familiar with that.

“According to Citizens Advice Scotlandhalf of those helped by food banks are in work – they will be much less sure than the Chancellor that the economy is heading in the right direction.”

The North and Leith MP is also backing the campaign by Unite, the Daily Mirror and the Trussell Trust to raise funds for food banks to help families in crisis this Christmas and to call for a Parliamentary debate on the issue.

Leith’s food bank was launched in October as the result of an initiative by local churches – the number of UK Food Banks has trebled since 2009.