The new ConDem coalition in London has set out its stall for the start of a five year term. The watchword on all lips has been financial responsibility after an era of soaring personal debt that was fuelled by a regime of light touch regulation and unprecedented gambling in the stock markets. Indeed the responsibilities for the worldwide financial crash in the autumn of 2008 had its origins in the UK and US model of the free market.
Since I wrote two weeks ago the Holyrood Parliament has now debated both the prospects for Scotland in the new ‘respect’ agenda launched by Prime Minister Cameron and the enquiry done by the Economy, Energy and Tourism Committee into the future of financial services in Scotland.
Last week produced clear evidence that relations between Scotland and the UK can be much less of an impasse compared to New Labour days. In a Tory motion amended by the SNP, the Tories, LibDems and SNP made 79 votes to Labour’s 45 and 2 Green abstentions. It reads:
“That the Parliament welcomes the commitment of HM Government to establish a positive and constructive working relationship with the Scottish Government and Parliament to tackle the problems facing the country and, in particular, welcomes the commitment in the Queen's Speech to introduce legislation to implement recommendations from the final report of the Commission on Scottish Devolution and the willingness to consider matters in relation to the Fossil Fuel Levy and fiscal responsibility issues.”
This crucially opens up real debate about how Scots can both raise taxes ourselves, or cut them and be accountable in Holyrood for the decisions we make. It’s a big prize for negotiations at the highest levels between Edinburgh and London in the next very few weeks.
There is no mistaking the threats of deep cuts across the land, due to unprecedented borrowing in ‘peace time’. That is Labour’s legacy to all of us for having to bale out the big banks. It hits every area of public spending from potholes on the roads to jobs in schools and hospitals.
But to get this in perspective we heard at a meeting of NHS Highland that a proposed cut of a hundred jobs would be needed to help meet £15m cut backs this year. Importantly people should know that the annual turn over of staff in the Health Board is between six and seven hundred. So, even deeper cuts if postponed till next year, as proposed by Cabinet Secretary John Swinney, would have to be very swingeing indeed to reduce health service delivery, such as new dentists, increased ambulance staff and nurses. New treatments, where patients stay for far less time in a hospital bed, will change staffing needs and can improve the patient journey at this time.
My duty in the banking debate in Parliament was to give the closing speech for the EET Committee. It’s a sort of battle with the surrounding noise of MSPs arriving in the chamber for voting time at 5pm. Often the Presiding Officer has to call for order to let those with an interest hear the conclusions.
We interviewed among others Stephen Hester, CEO of Royal Bank of Scotland, the BBC’s reporter Robert Peston, Gillian Tett, the Financial Times commentator, Mervyn King, Governor of the Bank of England, Lord Adair Turner, Chair of the Financial Services Authority, and the UK committee on Climate Change. This gave the Scottish Parliament unrivalled access to key players, which was urgently needed due to three of the biggest failures in Britain being based in Scotland, namely RBS, HBOS and the Dunfermline Building Society.
Thanks to expert knowledge, our committee adviser Philip Augar helped us produce a most creditable report. Suffice to say the work by the Westminster Scottish Affairs committee continually referred to our evidence in its hurried work. The Scottish Parliament does many things well and more thoroughly than Westminster. This is report that looks at the strengths of Scottish financial bodies such as asset management and insurance with a 300 year old pedigree. It lambasts RBS and Lloyds Banking Group on whom so many of our small borrowers rely.
Suffice to say the new ConDem coalition in London has its job cut out to avoid Philip Augar’s parting shot in his book The Greed Merchants – here’s to the next time!
As part of the work of the Economy Energy and Tourism Committee we have been enquiring how to promote Scottish exports and encourage inward investment. I had the chance to join the committee delegation earlier this week to Düsseldorf and Brussels to see how North Rhine Westfallia and Flanders do the same job.
Our meetings show us that big utility partners such as E On, Scottish Power and Scottish and Southern Energy who have won Pentland Firth wave and tidal sites can be major partners with local businesses that develop prototype wave and tidal machines. The European Union will back Scottish developments and I see considerable openings for German companies like E On and our own power utilities who stand to gain big prizes from backing local firms in the marine renewables field. It’s a story of hope for Scotland and particularly for the Far North that shows the work of the Scottish Government and Parliament to back our renewables windfall requires national borrowing powers to underpin the international interest in our marine resources.