I apologise for continuing to blog on the theme of the Scottish referendum, but little has so successfully revealed the true nature of the problems facing this country as a whole of late than this issue, and so it is well worth considering in detail.
Of course I am interested in the tax issues. That motivated many of my comments in Glasgow yesterday.
I am also interested in the ignorance that this referendum debate has revealed on the true nature of money, and its intimate relationship with tax and in turn the relationship of both to macroeconomics. It seems to me that there is a massive void in this area. I may blog on that later. It's certainly influencing the writing of The Joy of Tax.
But for a moment let's just focus on the lies - or at least, misrepresentations, which abound. Take this, from the FT this morning:
Sir Mike Rake, chairman of BT Group, deputy chairman of Barclays and president of the CBI employers' organisation, said independence would destabilise investment in Scotland and the rest of the UK. “The uncertainty will last for easily 10 years,” he told the Financial Times.
“Inevitably this uncertainty will lead to a slowdown in investment in the UK as a whole as well as Scotland.”
What Rake says may be true. But I think it a very long way from the whole truth. The whole truth is that around the world big business - the sort Rake has always been associated with - is not investing because it has no clue what to do with the mountains of cash it is sitting on, some if it offshore, of course.
There is reason for not investing: big business is earning massive returns from monopoly positions and has no incentive to innovate because that actually makes its position as an extractor of rent deeply vulnerable, so all it actually does is defend its position and the status quo whilst seeking to block innovation wherever possible. The tech industries are a great example of this.
So Rake is making an excuse for something that might happen anyway. That's because I suspect he wants nothing to change because what I suspect big business knows - and he speaks for the CBI so I can generalise - is that the investment that is needed in Scotland, in rUK and more widely, is not the sort business can provide. It is investment in people, in infrastructure, in care, in technology of the sort the state always has to develop first, and in the future of a post carbon world on which no big business will take the risk. In that case this is the type if investment that is ultimately tax related.
But Rake does not want to pay tax. He was after all head of KPMG once, and those were wilder days.
So what Rake says is business does not want to pay for the investment that's needed.
And does not want to invest itself.
And so what he's really saying is he wants business to keep things just as they are, fault ridden though the economy we have might be, because that suits his world interests very well.
And that, in my view, means what he said was disingenuous at best.
So too are other business interventions in this debate. Either they understand what they're doing and we need to be very cynical about what they say, or they do not understand and in that case we need to worry. But the forces for the status quo are just that: they are opponents of change when what we have is unsustainable.
I do not know what will happen next week, and have said this week that to some extent it dos not matter: what will matter will be what happens in the debate on the future of Scotland that starts on September 19, come what may, as it will. But I do know change is vital. And I do know that the forces against change will resist it, and have the power to do so. And I know that strong government of the sort we have not seen for too long will be required to deliver what people inherently know they need.
The worry is we will stagnate come what may. The referendum debate has been powerful for showing the desire for change exists despite the forces of conservatism (small c). And that's been encouraging whatever happens.
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Richard,you say “So to are other business intervention s in this debate”.
Couldn’t agree more: I caught this choice suggestion from the new head of Sainsbury’s, being interviewed on some news programme (I usually leave the room for the news, as I tend to comment loudly rant, my wife calls it, so she can’t hear!).
Well, this fine gentleman saidcthat, as operating costs were higher in Scotland, “inevitably” prices would have to go up in an independent Scotland, because “Scotland would be a different country”.
Given the way multinationals are able to jiggle around their tax accounting to suit their purposes, this struck me as little more than an unfounded and illicit – andcbullying – intervention in the debate, for there would be NO justification for any such price rises, as the differentials in operating costs will hardly be affected by Scotland’s relationship with the rest of the UK, independent or not.
Andrew
It’s always one rule for them and another for us
Richard
yes potential price rises at Waitrose and John Lewis apparently. i’m sure they’ll all be crying into their porridge over that one this morning.
Yes I agree with your opinion. it is clear that big business is scared of change and are lining up to try and stem the tide. One interesting thought- Could the Royal Bank of Scotland keep it’s name if it moved to England.
By the way Richard I seem to have been removed from your mailing list in the last week I haven’t had my daily does of tax stimulation for some over a week. can you fix that
Thanks
We are looking at RSS feed
Weirdly, I still get mine so it is not a universal fault, but there clearly is one
Some years ago, I asked Lloyds Bank why funds from an RBS cheque had not cleared in my account after a week. The answer was “It takes an extra day for funds to clear from a Scottish bank.”
I had not realised that Hadrian’s Wall was so thick and inpenetrable that it took electricity at least a day to get through!
Prior to 1996 the Scottish Banks ran their own clearing system for cheques & credits. Clearing an English cheque added an extra day over clearing a Scottish one in the same way.
For most of the years prior to this transmission of data through Hadrians Wall was not possible & actual paper had to be moved.
Hope that helps.
Nick Robinson asked Alex Salmond an extraordinary, but revealing, question:
“Why should a scottish voter believe you, a politician, against men who are responsible for billions of pounds of profits”
He then claimed the first minister didn’t answer.
What a strange world he must live in, pity we have to share it.
Salmond is selling us a capitalist Scotland. If capitalists say they don’t believe him, then it’s a problem.
I appreciate there are radical strands to independence as well.
The point was that Salmond replied, in depth, and made Robinson look a fool. Robinson reported formally after that Salmond had made no reply to his question. One has to ask what Robinson’s doing in a job after what appears to be quite deliberately misinforming the public in his role as reporter. Here are links Salmond’s reply and Robinson’s denial of it. Why are we paying Robinson’s salary?
The 1% with their greed, lies and tax dodging are trying to turn the referendum into a DEFERendum. We are the 99%; we do what WE want.
Richard,
Good points made here-
http://mainlymacro.blogspot.co.uk/2014/09/utopianism-and-scottish-independence.html
Couldn’t big business/ finance make its presence felt even more in an indpendent Scotland, if anything, than in the UK?
The risk exists, yes
Heck of a risk, isn’t it?
Finance, oil, defence.
Well said Richard Murphy!
Never I have seen such a short sighted and cynical campaign as that led by the ‘no’ camp. Scaremongering, supported by tame cohorts from the business world and some quarters of the media, many of them in hock to HMG (e.g. RBS) and wild nonsense about prices going up.
The fact is prices are going up anyway – just look at the railways, energy and other supposedly privatised and highly efficient industries. What I think Scottish voters are not hearing is some clear vision for an independent Scotland, what’s it going to feel like to live there, what values will it adhere to etc etc? It’s time more effort was put into communicating that rather than defending the yes campaign from spurious diversions.
Great piece Richard,the hollowness of the No vote is sickening. Scotland could do well if all Scots pull together just so long as they don’t listen to scaremongering?
Worrying point is Murdoch’s interference -,he is dangerous& Scots should exclude him from playing any part in the referendum or Independance afterwards?
Multinationals have disenfranchised Gen Y by denying them education& jobs in plan for docile uneducated workers stripping away INNOVATION & CREATIVITY by claims of Science& Math being more important. All have a place in shaping a well informed society?
I wholly agree with your logic on creativity
One of my continual bug bears is persuading people that unless they pay me to look out of the window sometimes I will not innovate
We perpetually value action and tangibility when value is very often elsewhere
Bang on! The truth is the establishment does not want to learn any new tricks, and therefore won’t look beyond its own footprint for innovative solutions to seemingly intractable problems. I wish the Scots well whatever they decide to do – the rest of us might, just might, learn from their experience.
@ screaminkid and @Richard
Richard, you won’t be surprised at my whole-hearted endorsement of screaminkid’s cri de coeur “Multinationals have disenfranchised Gen Y by denying them education& jobs in plan for docile uneducated workers stripping away INNOVATION & CREATIVITY by claims of Science& Math being more important. All have a place in shaping a well informed society?”
Frankly, I’m fed up to the back teeth of politicians who distort “education” into “training” – worse (for training his VERY important, in the right place and context) into mere moulding to fit the round holes the elite presume the majority are only fit to occupy (think our late, unlamented SoS Gove, or his patron Saint, Margaret T, who was a SoS for Education in Heath’s government
This turns “education” into something merely instrumental, to do with “getting a good job”, and “earning a good living ” (all VERY important, but…. And how about there being jobs to go to?), which is usually coded language for “shut up, keep you head down and don’t ask questions”, on a par with our appalling new Minister for Charities, Brooks Newmark, who thinks charities show “stay at home and stick to their knitting” see http://anotherangryvoice.blogspot.co.uk/2014/09/brooks-newmark-charities-tories.html)
I repeat what I’ve often said before – education, true education, is about freedom – about the freedom to see through lies, and waffle, and propaganda. And it is about fulfilment – becoming who you can become. So it is about innovation and creativity; it IS about woolgathering and staring out of the window (practices much engaged in by both Isaac Newton and Albert Einstein, but also by “useless” (i.e non-Gradgrind) poets and playwrights and artists and painters and musicians, all of whom would be squeezed out my the neo-liberal equivalent of “Socialist Realism”, which would have us believe in 20 impossible things, not only before breakfast, but morning noon and night.
I’ll be damned if I want to see an education system that mimics business values, especially those of the zombie economists and card-sharp businessmen who nearly bust the global economy in 2008, and now have the gall the preach down to us that ever more austerity is needed – there comes a time when bleeding the patient results in his death!
Andrew
I very strongly agree
Go well
Richard
These ‘threats’ by the MNC’s are utterly despicable and a variation of the the ‘too big to fail’ gun at the head approach of the banks.
I think Richard makes a good point here: they don’t want change because they are happy sitting on asset inflation and the overcapitalization that has led to it. In reality they are draining the economy while pretending they are it’s cornerstone (another perversion of language). The ‘benefits’ of a stock market boom have not spread to the economy at large and they seem to want to keep it that way. As Jan Toporowski has pointed out (http://www.youtube.com/watch?v=-H2o7_FKcSo) this really reveals the inefficiency of the capital market.
Politicians should be telling us all about this but judging by the Westminster trio’s visit to Scotland all they were capable of was the most staggeringly condescending and patronising dumbed-down drivel I’ve ever had the misfortune to witness -I’m getting old (still a year younger than Richard!).
The unionists marched today & Farage showed up. The only possible way I can interpret this is that forces on the right want Scottish independence.
Has anyone realised that if Scotland has to apply to join the EU as a new member it will have to impose VAT on food at a lower rate ?
I can see a nice job opportunity for Newcastle food smugglers going over the border to sell bootlegged joints of beef in Scotland !
Might you provide a source please?
Appreciated, if that’s possible