Marlyn Glen MSP

3 December 2010

Before the SNPís council cuts come, remember this.......

While we wait for the SNP minority administration on Dundee City Council to cobble together the courage to reveal to the people of the city the details of the cuts that they will unleash to preserve their disintegrating everlasting council tax freeze, itís time ( to use a political partyís 2007 election slogan) to end their casual commentary on the cause of the state of the councilís finances.

No statement appeared to be complete without the SNP referring to "Westminster cuts" when Labour was in power at Westminster, despite Labour increasing the funding of the Scottish Parliament, which included almost an extra £1 billion last year.

Now that the Tories are in government, the SNP act as their weak echo in describing the previous Labour governmentís economic rescue measures as "Labourís economic mess".

The SNPís solution, of course, is presented as a supposedly easy, financially painless one -, independence - even although itís an unwanted remedy, repeatedly rejected at the ballot box by Scots.

The SNP incantation of "Westminster cuts " when Labour was in office deliberately avoided reference to the global recession.

However, this was a world-wide banking crisis, and not one spawned South of the Border at Westminster.

The then Labour Government had to shore up the banking sector to protect peopleís savings and jobs, even to the extent of ensuring that such an everyday necessity as money was available at bank cash points in the streets, and through a massive public investment programme to preserve the economy from sliding into a catastrophic collapse.

Labourís model of recovery, sneered at the SNP, was copied by government after government across the world.

The SNPís preference was for their small nation "success syndrome", in this instance, to emulate the so-called economic achievements of the "Celtic Tiger" of Ireland with a Scottish "Celtic Lion"

Rolling back to March 2008, Alex Salmond told Harvard University of

"our belief and our aspiration in building a Celtic Lion - a new economic powerhouse that will be one of the great success stories of the global economy.

"This is the defining mission of my Government."

Now rolling forward from then and back to the present day, Ireland is to receive a massive 85billion euros rescue package for its ailing banking system.

This is a tragedy for the Irish nation.

It is also a huge blow for the SNPís Westminster-fixated explanation of the cause of Scotlandís problems.

The size of the UK bailout of Scottish-based banks such as RBS Ė £37 billion, more money than the Scottish Parliament has to spend Ė illustrated how the SNPís "Celtic Tiger" copycat ambitions would have enfeebled Scotlandís economy for years afterwards.

There has been the occasional rumble of rage from the nationalists against the bankers, to follow the public mood , but itís much more instructive to discover the SNPís attitude towards Scottish-based banks just before the crash.

During the 2007 Scottish election campaign, Alex Salmond set out the SNPís staunch support for a "hands-off" approach to banks in a separate Scotland, saying,

"We are pledging a light-touch regulation suitable to a Scottish financial sector with its outstanding reputation for probity, as opposed to one like that in the United Kingdom which absorbs huge amounts of management time in "gold-plated regulation."

In other words, Labourís rules on regulating banks were too tough for the SNP, and were holding back the very banks who were to feature prominently in the UKís financial crisis.

An important Freedom of Information victory was won this year after an 18-month struggle against the SNP Government.

This made public a letter which revealed the SNPís accommodating attitude towards the banks still further.

Alex Salmond offered Fred Goodwin, of the Royal Bank of Scotland (RBS) fame, the support of his SNP Government in its calamitous bid to take over the Dutch bank ABN Amro, a move at the very heart of the financial crash.

The offer was never taken up.

Iain Gray, Labourís Leader in the Scottish Parliament, described the letter as

" another example of how Alex Salmond was too close to RBS, and his bad judgment.

"There were many warning signals about this disastrous deal but all along Alex Salmond was an avid supporter of Ďlight touchí regulation and giving RBS and other banks a free rein.

"At the very moment the Scottish banking system was on the verge of collapse, Alex Salmond was holding it up as a model to follow."

Yes, there should have been tighter regulation of the banks, but Labour did increase spending on public services greatly in real terms, and nationalist-Tory talk of "profligate" Labour spending is at odds with Labourís performance on inflation which was low, interest rates which were low, and a Scottish Parliament whose funding increased year after year.

The deficit can be reduced by job creation and economic growth that generate tax revenues and by measured reductions in spending, and there are more radical alternative approaches to the Tory deficit hawk approach of deep, swift cuts in public spending.

Tax Research estimates that over £120 billion of tax revenues is outstanding in the UK Ė £25 billion in tax avoidance, £70 billion in tax evasion and £28 billion uncollected.

PCS, the Public and Commercial Services Union, have illustrated how the deficit can be tackled by employing many more HMRC staff to claw back the uncollected tax.

Furthermore, the Robin Hood Tax group say that £20 billion could be generated annually in the UK by a "tiny tax" on global financial transactions.

These are real solutions, a political world away from the simplistic slogans of the SNP.

So while we wait on the cuts to come from the SNP in Dundee, consider what their national party leader said in February 2008 of the banks that were to be at the centre of the economic collapse ,

"The Scottish banks are among the most stable financial institutions in the world."

Less than a year later, one of them, RBS, The Royal Bank of Scotland, recorded the biggest loss in British corporate history.

The Times of January 2009 reported :

"The scale of losses at RBS is breathtaking.....it had paid between £15 billion and £20 billion too much for the Dutch bank ABN Amro last year.

"The Royal Bank of Scotland was on the brink last night after the biggest loss in British corporate history sparked a collapse in its shares. .... The scale of losses at RBS is breathtaking.....it had paid between £15 billion and £20 billion too much for the Dutch bank ABN Amro last year."

This was the very same takeover bid for which Alex Salmond offered RBS the support of the SNP Government.

 

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