Tuesday 14 January 2014

The Meerkat Of Badenoch

Danny Alexander, our Coalition Chief Secretary to The Treasury, has come up with an unexpected wheeze that apparently flies in the face of sense or reason. 

He has proposed that the UK Government should guarantee the whole of the current UK loan book and that any possible Scottish portion is not an issue in the business of the coming Referendum. 

Alex Salmond with his typical reflex reaction claims that this strengthens the Scots negotiating position, but it might be quite the reverse.

Danny is the Member of Parliament for Inverness, Nairn, Badenoch and Strathspey, it might be suggested that he has a special interest in the matter given the political risks to him in the coming series of votes. 

He argues that a clear statement and policy on the matter is of major importance to the financial markets and their confidence in the pound etc. Well, he would, wouldn't he?  But there is more to it than that. 

If the new UK were to insist on some part of the historic debt, all those wars and the booze, betting, bonking, benefits and borrowing society that recent Scots got us into, then going to the new Scotland there would be endless discussion with concessions etc. to be made on a raft of matters.  If there is no transfer of debt then the new UK does not need to make concessions in other areas.

Danny could have taken away Alex's bat, leaving him to face the bowling with whatever might come to hand.  If the fracking does go ahead the new UK will not need Scottish oil.  If fracking goes ahead elsewhere there will be an effect on oil prices.  The EU in the parts that do not frack may want the oil, but if the new Scotland goes into the EU then it will surrender any independence it has and probably be obliged to join the Euro Zone which means losing control over its own budgets.

What the international markets may then make of new Scotland's credit rating is something that cannot be forecast.  If new Scotland does go in for large state spending as promised then this may not be good. 

But those wanting a new Scotland imply that borrowing on any scale should not be needed.  There has been the blithe assumption that it can rapidly build up a sovereign wealth fund on the Norwegian model.

Figures that appeared in the media recently suggested that this amounts now to a million kroner per citizen.  That does sound a lot but at ten to the pound that is one hundred thousand, again seemingly a lot until you run the figures. 

It is about five to ten years of benefits to some families.  Perhaps around ten or a few more years of old age pensions.  Then put in the medical and other ancillary things and a hundred thousand is not much these days.

All this assumes existing population figures.  Is Scotland to be for the Scots or is it to be a relatively open state?  The SNP say that it will be both.  Is this in conflict or does this mean that what those voting think of as being Scots will not be the Scots of the future?  This is a minefield for debate and in shaping future policies.

All depends on the relevant economies holding up and moving on from the recent crash.  Even given that it seems that the next few years is going to be messy, uncertain and there is a lot that can go wrong and some of it will. 

Just over 600 years ago, in another age of turmoil, a leading figure in all the strife was Alexander Stuart, The Wolf of Badenoch, son of King Robert II, who rests in the Cathedral at Dunkeld.

In comparison, Danny is more like the Meerkat of Badenoch. Not far away on Friday 8 April 1870, an Alexander Salmond, out on a fishing trip on the Tay was murdered by poachers out to steal his catch.

Has Danny mugged Alex?

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