Scotland’s main parties to discuss further devolution at Smith commission


Scottish Parliament

Scottish Parliament, Edinburgh

By Shaun Gibson : @ShaunyNews

SCOTLAND’S politicians will put aside party differences today to work on more devolved powers to the Scottish parliament. Representatives from five Scottish parties – two each from the SNP, Labour, the Conservatives, the Lib Dems and the Greens – will be told by Lord Smith of Kelvin to find consensus on bringing new powers to Scotland when they meet in Edinburgh Lord Smith and the politicians are on a tight timetable to deliver the vow made by the pro-Union parties to deliver more powers for Scotland in the event of a No vote. With a Command paper already issued, the parties have to agree a way forward by the end of November . Then the UK Government will put forward draft legislative proposals based on what is agreed in a bill in January.

Lord Smith has the responsibility of getting parties to agree

Lord Smith has the responsibility of getting parties to agree

The bill will be brought forward after the general election by whatever government come in. Reaching consensus on the points that can be agreed will be the easy part in the first formal session of the Smith Commission. The five Scottish parties have already submitted their proposals so everyone is aware of each other’s demands. The focus will be on finding common ground, something Lord Smith is optimistic about. He said: “Having spoken to all of the parties individually, I believe the will is there to reach 
agreement. “Today’s talks give them the chance to sit down together, find common ground and begin the process of delivering what the people of Scotland expect – a package of new powers which will strengthen the Scottish Parliament within the UK.”

Easily-dealt with issues include devolving the powers of the Crown Estate Commission, who own 
the seabeds around the UK and receive rents from Scotland’s fish farm and offshore wind turbine operators. Moving beyond that, there may be agreement on devolving powers such as funds for housing benefit and aspects of welfare including attendance allowance and job training. Nicola Sturgeon has already said that the process must deliver “something substantial.” The First Minister-elect knows independence won’t come out of the talks but wants something very close to it. She said. “The language that was used during the referendum campaign was very clear. The other parties, in seeking to persuade people to vote No, said that more powers would amount to near federalism, a modern form of home rule, devo max.”

Nicola and Alex have all the balls in their side of the court

Nicola and Alex have all the balls in their side of the court  😉

Parties

All 5 must agree

The SNP submission makes great play of the campaign pledges of other party leaders, laying plenty of ground to cry foul if, in their eyes, the powers package falls short of what was solomnly pledged. Alex Salmond, now cast in the role of pointman for the SNP as his formal leadership role fades, has already talked of “betrayal”. The Scottish Government have called for maximum devolution within the UK, including full control over tax and fiscal policy, in a wide-ranging set of proposals stopping just short of full 
independence.But the demands of the SNP and the Greens for devo max powers will sail right over the bar of one of the Commission’s key remits, to maintain the integrity of the UK. The great faultine may not be if the Commission deliver devo-max demands, they will not, but on how much and how far they will go up to that limit.

There are major disagreements between Labour and the Conservatives on the issue of tax devolution . In the run-up to the talks the trickery of David Cameorn on linking whether or not Scottish MPs should continue to be allowed to vote on English-only issues in the House of Commons has fouled the atmosphere . The Tories want to go further on the handover of tax levying powers than Labour do. Complete devolution of tax raising powers would be independence by the back door, Gordon Brown has argued. But the Lib Dems, who want Holyrood to have complete control of the rates and bands of personal income tax, seem unfazed.

The Conservatives and Lib Dems want Edinburgh to be in charge of setting rates and bands of personal income tax while Labour would impose limits, lower than even Brown wants. Brown wants Holyrood to be responsible for raising 54 per cent of its own revenue, quadrupling the figure from the £4billion it currently raises to £18billion in 2016. Scottish Labour want powers that would allow the Scottish Government to raise 40 per cent of their budget. There is plenty of room for the parties to fall out, as they will, but also pressure on them to find 
agreement too.

Meanwhile, former first minister Jack McConnell fired a shot across the bows of the Commission and his own party yesterday saying that the quick fix must stand the test of time. He said: “If you are designing a new tax system for Scotland, the system has to work and be sustainable for at least a number of years. “I hope Lord Smith will note the proposals from the different parties but then start a discussion on the basic principles that should then determine what is delivered.” He added: “Deals reached behind closed doors are not going to reach a semi-permanent solution. This has to be seen as based on principle and stand the test of time.”

The representatives on the commission:

SNP – Scottish Finance Secretary John Swinney and Linda Fabiani MSP.
Scottish Labour – Finance spokesman Iain Gray MSP and shadow work and pensions minister Gregg McClymont MP.
Former Scottish Conservative leader Annabel Goldie will represent her party with Glasgow University law professor Adam Tomkins.
The Scottish Liberal Democrats – Former Scottish Secretary Michael Moore MP and former party leader Tavish Scott MSP.
The Scottish Green Party – Co-leaders Patrick Harvie MSP and Edinburgh councillor Maggie Chapman.

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http://www.theguardian.com/uk-news/2014/oct/22/scotland-main-political-parties-devolution-smith-commission

http://article.wn.com/view/2014/10/22/Scotland_s_main_parties_to_discuss_further_devolution_at_Smi/

http://www.rte.ie/news/2014/1022/653981-scotland-devolution/

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Independent Scotland could be AAA rated – Standard & Poors – Another MYTH BUSTED!


The highly credible Standard & Poors

The highly credible Standard & Poors

The very same group who monitor countries credit ratings and downgraded the USA to AA from AAA have came out and said Scotland would be an AAA Rated country, the highest rating a country can have. This is a massive blow to the No camp on the eve of the vote and a story we MUST get viral over night. The polls close around 27 hours from now, lets get this amazing information out there. For people not in the know or who do not understand, you can see America is High Grade and not prime, Scotland would be prime. So another Myth shot to pieces Scotland

In a massive blow to the credibility of the No Campaign’s scaremongering, the credit rating agency Standard & Poor’s released a report yesterday, clearly stating that an independent Scotland would be an investment grade economy.

The report states emphatically that S&P would expect Scotland to ‘benefit from all the attributes of an investment-grade sovereign credit’  due to its ‘wealthy’ economy, and that it sees ‘no fundamental reason’ in terms of Scotland’s balance sheet why Scotland could not float its own currency (even though we do not intend to).

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Standard_poors_ratings_mar302009Interestingly, given that it comes on the heels of yesterday’s exaggerated media coverage of the statement by Standard Life, S&P actually reported that  ‘a shrinking of Scotland’s ‘unusually large’ financial services sector could boost the country’s sovereign credit rating by reducing the size of the economy’s external balance sheet and reducing its liabilities’.

In other words, the perception of Scotland’s credit-worthiness could be even stronger if one or two banks left. They won’t of course, which is why we only mention this for academic interest, but it reminds that we should be careful about presuming that if certain institutions did leave, it would be a disaster. RBS comes to mind in particular. Of course, RBS is deleveraging so quickly that the size of its asset base in Scotland is likely to have reduced even more significantly by independence day in March 2016. And the financial sector in Scotland contributes to a smaller share of GDP than the UK as a whole anyway.

Far from worrying about the volatility of oil prices, credit ratings agencies seem to be more concerned about the highly volatile financial sector that dominates the UK’s economy, and of course contributed to the recession and credit crisis. Business for Scotland has long argued that this is where the real threat to Scotland’s economy lies.

The report gives Scotland a positive rating even under the scenario that:

  • Scotland would not have a currency union and would have its own currency (which BFS does not believe will happen)
  • Scotland would inherit a population share of UK debt (which BFS expects to happen because Scotland will gain a fair share of assets including currency)
  • A major financial institution or two were to leave (which they won’t in our view)

There are seven major rebuttals to the No Campaign’s position in the report:

1) Oil revenues are bonus to Scotland, not something we are dependent on.

S&P state that Scotland could manage independently even without the contribution of the North Sea. Our GDP without oil is roughly similar to other credit-worthy nations.

2) Scotland is not excessively reliant on oil.
S&P says it only considers an economy to be over-reliant on a particular industry if it accounts for more than 20% of GDP. Oil in Scotland is between 12-16% of GDP.

3) The people of Scotland and the business community can be confident in the strength of an independent Scotland’s economy.

S&P cites  ‘high-quality human capital, flexible product and labour markets and transparent institutions’ as further reasons for confidence in the Scottish economy.

4) Scotland has a strong balance of payments.
The report states: ‘Overall, then, from a balance of payments perspective, there is
little evidence that Scotland depends on the rest of the world to finance a large share of its annual GDP. In other words, net external financing on an annual basis appears to be relatively low’.

5) Scotland is a wealthy nation.

The report compares the GDP (wealth in the economy) on a per head basis with other countries, stating:

  • Scotland GDP p/capita = $47,369
  • Germany GDP p/capita = $43,855
  • UK GDP p/capita = $41,066
  • New Zealand GDP p/capita =$39,840

All of those nations have an AAA credit rating from at least one of the three big credit rating agencies and Moody’s rates New Zealand higher than it does the UK.

6) Scotland has a varied tax base (and by extension a diverse economy).
S&P states ‘even excluding North Sea output and calculating per capita GDP only by looking at onshore income, Scotland would qualify for our highest economic assessment. Higher GDP per capita, in our view, gives a country a broader potential tax and funding base to draw from, which supports creditworthiness’.

7) Danny Alexander’s credibility is in tatters

 

Danny Alexander credibility in tatters

Danny Alexander credibility in tatters

Was his evidence incompetent or knowingly misleading?  As another element to the self-styled Project Fear bites the dust how, can anyone believe a word that the No Campaign say?Treasury Minister Danny Alexander is one of the gang of three who have schemed with Alistair Darling to convince Scots we have no rights to our own currency. In February, he gave evidence to the Scottish Parliament’s economy committee where he said interest rate rises in an independent Scotland would suffer from an “independence premium” on borrowing from the markets, leading to “an extra £1,700 a year for the average mortgage-payer”.
Now one of the credit ratings agencies has suggested Scotland would be investment grade and compared it to peers who are all AAA rated.

 Is it all milk and honey then?

No, clearly not. The world is recovering after a major recession and financial crisis caused in part by the lack of regulation and foresight of previous Chancellors such as the No Campaign’s Alastair Darling or Shadow Chancellor Ed Balls. Scotland faces significant issues after a No vote, not least the generations of Westminster austerity budgets to come and the associated deep cuts in Scotland’s budget.

The S&P reports clearly states there would be a transition period and that: ‘If Scotland were not to join a monetary union then Scottish financial institutions would not have access to lending facilities from a major central bank such as the European Central Bank (ECB) or the Bank of England’.  This is true and is one of the reasons why the Scottish Government is willing to accept a fair share of the UK national debt in return for a long term agreement on continuing the currency union that will benefit both Scotland and rUK, not least by both minimising small business transaction costs on business both sides of the border and, as it happens, helping to protect the rUK’s credit rating.
The report concludes: ‘In short, the challenge for Scotland to go it alone would be significant, but not unsurpassable’.

Conclusion
Several of the No Campaign’s scare stories about Scotland’s financial position as an independent nation have been completely blown out of the water by this report. It states, emphatically, that an independent Scotland would be an investment worthy nation. It also highlights that Scotland’s economic peers are all AAA rated by at least one major credit agency.

We have a choice, with a NO vote we have the significant and possibly unsurpassable challenges of staying in the union or vote YES and face the challenges and opportunities of the world in control of our own destiny. We can deal with the “not unsurpassable”, challenges with the freedom to be the country we want to be and to head in the direction we choose to go.

With a YES vote we can, create a successful and sustainably growing economy whilst sharing wealth more fairly in the interests of the economy, business and Scotland people as a whole.

http://newsnetscotland.com/index.php/referendum/8806-credit-agency-confirms-indy-scotland-set-for-triple-a-credit-rating

http://www.standardandpoors.com/products-services/RatingsDirect-Global-Credit-Portal/en/us