Wee Blue Book of Errors Part II: Pensions

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Guest blog written by Neil Lovatt who can be found on Twitter @neiledwardlovat

Neil is an Associate of the Chartered Insurance Institute and blogs on financial services. He offered to deliver a professional's critique of the section in Wings Over Scotland's Wee Blue Book entitled "Pensions" and I'm happy to publish it here. As with all my own blog posts: if I'm notified of any material errors I will be happy to correct and/or offer Neil the opportunity to clarify

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As I say in the Live Red White & Blue Book, pensions are a highly complex topic. They need not be, but government tinkering over the ages has made them fantastically complicated. That’s why you can’t legally advise on pensions without being qualified in the UK. There's a very good reasons for this: it stops people who don’t know what they are talking about confusing others on the subject.

It’s a shame the Financial Services & Markets Act doesn’t apply in the circumstances of the Wee Blue Book as, in my professional opinion, it would be ruled illegal for failing the principles of “clear, fair and not misleading”.

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The first paragraph doesn’t get off to a good start:

Pensions are a matter of great concern to many Scots, and as a result the No campaign spends a considerable amount of its time trying to frighten people into believing independence represents a threat to their pension. Yet as with currency, pensions are one of the few aspects of the independence debate about which it IS possible to state the position with certainty.

Before I take this apart, I'll let the Wee Blue Book do it for me. The last line of the Pension section itself refutes the first paragraph:

The idea that a No vote provides either security or certainty over pensions is simply a myth. Nobody can say what the next government England elects will do.

This cuts both ways so the converse must be true.  The idea that a Yes vote provides either security or certainty over pensions is simply a myth. Nobody can say what a government in an independent Scotland will do.  It’s likely that Stu was tired - or more likely confused - when he wrote this last line; it completely contradicts the certainty that he set up at the beginning. For the record I agree with the latter sentiment.

There is no certainty over pensions in an independent Scotland other than the uncomfortable reality that we know with confidence that UK pensions would end on independence. The reason we can say this with such certainty is that both sides agree on this position.

The Scottish Government published a very good paper (> Pensions in an Independent Scotland) a full year before the referendum. In this they clearly set out the priorities for pensions and how they would operate in an independent Scotland.

The Scottish Government were unambiguous: existing pensioners in receipt of a UK State Pension and those currently accruing a UK State pension would - after independence - receive a Scottish State Pension paid for by the Scottish Government rather than the UK Government.

It's there in back & white: the UK State Pension ends and moves to the Scottish Government. What makes this worse is I know Stu knew this because we have had conversations about it at the time.

Conclusion : Factually inaccurate - the UK pension would have ended on independence.

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The Wee Blue Book then goes on to try and substantiate the certainty of UK pensions with evidence which is at best limited. It opens with a highly selective quotation from Ian Davidson:

For example, Labour MP Ian Davidson, chair of the Scottish Affairs Select Committee, made these comments in the House Of Commons in May 2014:

“The state pension of any individual in Scotland, in the event of separation, would not be adversely affected [...] they would continue to get the level of state pension, the same as everyone else in the UK… people themselves can be assured that their pensions are secure.”

This was followed by a report from Steve Webb’s evidence to the Committee:

 State pensions would still be paid after independence, a UK minister has told MPs, despite concerns raised by the Better Together campaign. Giving evidence to the Scottish Affairs Select Committee, Lib Dem pensions minister Steve Webb said that anybody who had paid UK national insurance would be entitled to their state pension whatever the outcome of the referendum. The intervention contradicts concerns raised by former Labour Chancellor Alistair Darling, the leader of the Better Together campaign.

This is consistent with Stu’s usual style - he's being selective with the facts to try and avoid the awkward reality that these quotes were specifically in the context of the right to a pension which an individual would accrue.  Ian Davidson clearly stated in his opening remarks that they wanted to talk about rights “as distinct of who is paying for it”. This important qualification seems to have been missed from the Wee Blue Book.

Furthermore Steve Webb’s evidence is very clear in his written evidence to the Committee on the subject of who is paying for pensions and the threat that independence posed to them. In this Webb states very clearly:

“I would think the Scottish people would expect their Government to take on full responsibility for paying pensions to people in Scotland including where liabilities had arisen before independence. Similarly people in the rest of the UK would not be expecting to guarantee or underwrite the pension of those living in what would then have become a separate country. The security and sustainability of pensions being paid to people in Scotland would, therefore, depend on the ability of Scottish tax payers to fund them.”

Again this vital piece of information is missing - readers of the Wee Blue Book are denied the opportunity to see that there is a clear and real risk to their pensions.

Finally in this section Stu goes on to muddy the waters with references to the DWP letters on the subject of pensions:

And in any event the facts had been well established long before then, with the Department for Work and Pensions having made a similar statement in January 2013:
“If Scotland does become independent this will have no effect on your State Pension, you will continue to receive it just as you do at present.  Anyone who is in receipt or entitled to claim State Pension can still receive this when they live abroad. If this is a European country or a country where Britain has a reciprocal agreement they will continue to receive annual increases as if they stayed in Britain."

This yet again misses the key point about rights of the individual: what matter is who those rights are against (i.e. -who is picking up the tab, the Scottish or rUK government?).

The DWP letters were carefully worded; after all it was not for the civil service to comment on who would be administering or paying for pensions in an independent Scotland. These replies were designed to reassure voters without straying into politics, sadly this gave people like Stu the opportunity to wilfully misinterpret them to contradict the mutual position of the UK and Scottish Governments.

Conclusion : Factually inaccurate - and certainly fails the “clear, fair and not misleading" test: all Scottish pensions would have depended on the Scottish Government’s ability to pay

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Stu’s claims about private pensions demonstrate nothing more than his limited knowledge on the topic. Whilst the cynic in me thinks that this was deliberate, it is more likely ignorance.

Private workplace pensions are the only area of uncertainty. EU rules impose funding requirements on pensions operating across national borders, which would apply to any UK-wide scheme.

However, there are numerous options available to circumvent this problem, the simplest of which is for the firms operating the scheme to set up a Scottish office and handle the Scottish and rUK sides separately. The decision as to which solution to adopt will be one for each company to make individually. Unfortunately it’s simply not possible to answer generically or in advance.

There are indeed numerous options available to firms available to deal with cross border schemes but they are all complex and expensive.

The “simplest” is not to split the schemes setting up separate ones for each region - especially if the schemes were in deficit i.e. the value of the scheme was lower than the cost of future benefits guaranteed by the scheme (quite common and, within reason, nothing in itself to worry about).  The reason for this is that a cross-border scheme would need to be fully funded (i.e. the value of assets must be brought up to equal the benefits) and that could cripple a number of employers, leading to the scheme closure.

Stu’s solution of setting up a new scheme in Scotland omits this crucial fact: it would have to be fully funded.  The likely consequence (if the employer couldn’t afford to close the deficit) would be that at least the Scottish part of the scheme would be closed. As has happened in the past, it is likely that many employers would use the opportunity of change as an excuse to end their final salary (gold plated) pension schemes.

Conclusion : Fails the “clear, fair and not misleading" test: independence would likely place huge pressure on private cross border final salary schemes, presenting members with risk but no beneficial upside.

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If you want to read about 10 glaring factual inaccuracies in the Wee Blue Book relating to Economics, please see this post > Wings & His Wee Blue Book of Errors

Wings and His Wee Blue Book of Errors

I resent having to write this post, but someone's got to do it.

When people attempt to dismiss this blog,  I consistently offer the same response: if there's a factual error I'll correct it.  Others repeat that promise on my behalf. My sometimes trenchant views on those who attempt to spread falsehoods via social media mean lots of people are highly motivated to trawl through here and find mistakes.

For the record - after over 100 posts and well over 600,000 views - there have been two so far.

• I presented an historical oil tax income graph which was not adjusted for inflation. I accepted that was misleading so I updated it within 24 hours (and still show the original beside it as a mea culpa)
• I once wrote that the S in GERS stood for Statistics instead of Scotland. Schoolboy error; I left the original mistake with a highlighted correction 

That's the beauty of having a blog - we'll all stumble from time-to-time but it's the work of seconds to make a correction.  If you seek credibility, if you're genuinely concerned about ensuring wide dissemination of accurate information, you simply must correct any errors you become aware of.

Which brings me to (fake⁵ Reverend) Stuart Campbell, custodian of Wings Over Scotland and proud author of the Wee Blue Book.

I and many others have frequently highlighted errors in his Wee Blue Book (and his blog more widely) and he really doesn't like it. He never posts corrections, instead he simply feeds his followers by personally abusing those of us who point out his many mistakes. Given how much he clearly hates me, you might think it's surprising that he's never identified any errors in my blogs¹. Go figure.

But we do know he's well aware of some of the many errors he's made (see Wings Over Scotland: an Apology or the Addenda to Sowing the Seeds).

All of which makes this recent Tweet of his either a remarkable demonstration of self-delusion or just simple trolling

15 months and still waiting for anyone to identify a single factual inaccuracy in the Wee Blue Book.

— Wings Over S******d (@WingsScotland) October 23, 2015

I genuinely worry that by engaging with Stu on stuff like this I'm just bullying. The problem is his social media reach is huge (far more people read Wings than will ever venture to this blog) and he directs so much abuse at me personally that I feel I should set the record straight. By collating this little highlights reel I hope to avoid ever having to engage with the question of Stu's credibility again.

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For context, it's important to understand the timeline with respect to the availability of the Scottish Government's Government Expenditure and Revenue Scotland (GERS) figures.

• March 2013: GERS 2011-12 published
• November 2013:  Scottish Government White Paper published
• March 2014:  GERS 2012-13 published (including a £1.2bn correction² to 2011-12 figures)
• August 2014: Wings publishes his Wee Blue Book
• March 2015:  GERS 2013-14 published

So the 2012-13 GERS figures (including corrected 2012 figures) had been out for 5 months when Wings first published his wee Blue Book. Since then we have had another year's worth of data published. For simplicity let's refer to 2011-12 GERS as "2012 figures" and so on.

Wings is strangely wedded to the outdated and incorrect 2012 figures. There are plenty of unforgivable things about the White Paper (not least the oil forecasts used) but, given when it was written,  it's not unreasonable that they fixated on what have turned out to be materially incorrect 2012 figures. Wings, on the other hand, has no excuse for not using 2013 figures (or for quoting the out-of-date 2012 figures when he chooses to quote those). He would only not use the correct and up-to-date figures if he's either hopelessly incompetent or willingly deceitful. You decide.

To understand the GERS figures and how they've changed over time you really only need to understand two graphs, so bear with me.

Firstly here's a simple graph of the most recent GERS figures expressed in terms of per capita deficit difference between between Scotland and the rest of the UK. These figures come straight from the most recent available GERS³ and are of course the "we keep our oil" version. Where the bar is above the axis Scotland is a net contributor to (if you like is "subsidising") the rest of the UK; of course when the bar is below the line we are a net beneficiary. I've marked the 5-year period that was quoted when the White Paper was written (and you can start to see why the fixation with 2011-12 figures).

Secondly here's a graph that explains the dynamics underlying this deficit difference. Again we're looking at per capita differences between Scotland and rUK: The black line is Total Tax Revenues (including oil & gas), the green line is Total Onshore Tax Revenue (i.e. excluding oil & gas) and the red line is Total Public Expenditure.

These two graphs are related of course: the blue deficit-difference bar-chart is simply a plot of the gap between the Total Revenue (black line) and the Public Expenditure (red line) shown on this second graph. The importance of oil revenues and the scale of the onshore (i.e. without oil) deficit gap is clear.

So now the context is set, let's see if the Wee Blue Book has any "factual inaccuracies" in it. It's worth noting that I've only bothered to look at the economics section here.

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1.  Wee Blue Book, page 10.

"the UK government and the No campaign desperately want you to believe that Scotland would be poorer as an independent country, and that it would therefore have to raise taxes and/or cut public spending to protect services.  But that simply isn’t true."

Nobody with any credibility disputes this point anymore and frankly nobody with any credibility disputed it prior to the indyref (because by then the nature of the oil decline was clear, even if the scale of the decline caught almost everybody out). If you doubt this point, here's the words of the SNP MP and economist George Kerevan as quoted in The National in March 2015 *

* < correction>
As the link shows it was actually May 2015 - I can't see it makes a material difference but somebody highlighted this as an error so I'm happy to correct it (it's good to see people are checking and this is the best they can find)
 < correction ends>

"We all know that in present UK economic circumstances a fiscally autonomous Scotland would face a significant budget deficit. For Scotland to accept fiscal autonomy without inbuilt UK-wide fiscal balancing would be tantamount to economic suicide"

But let's be fair to Stu - whilst he's been shown to be spectacularly wrong, was he factually incorrect at the time? Well he justifies his statement with a link to an FT article which was more than a year out of date when the WBB was published and uses 2012 figures. Give that the 2013 figures had long since been available and the certainty with which Stu stated "But that simply isn't true" I'm afraid the answer is pretty clear.

Conclusion: Factually Inaccurate

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2.  Wee Blue Book, page 10.

"Scotland subsidises the UK by billions of pounds every year, and has done for many decades"

A simple glance at the blue deficit-difference bar chart above tells you this is wrong; the only time we can be said to be subsidising the rest of the UK is when that bar is above the axis. So how did he attempt to justify this ridiculous statement? He cites his own blog quoting a government statement made in 1997 that looked at the cumulative picture since 1979 (when the oil boom started). As my graph below shows, you can see by inspection that statement was indeed true fifteen years ago

Even in 1997 it wasn't true that we'd "subsidised" the UK "every year" and it's certainly not been true since then. It's telling that when he's been challenged about this recently Stu deflects by pointing to a cumulative analysis that hypothesises an oil fund existed in 1979 - avoiding the "every year" element of his statement and the fact that he cites the 1997 data as his source in the Wee Blue Book. This alternative analysis is only of any relevance to the debate if there's an option to vote for a time-machine to allow us to rerun the 1980's.

At a very generous pinch you might let him away with saying "if things had been different in the 1980's and we'd created an oil fund then you could argue that Scotland would have been a cumulative net contributor to the UK since then".

But does Scotland subsidise the rest of the UK by billions of pounds ever year? Definitely not.

Conclusion: Factually Inaccurate

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3. Wee Blue Book, page 12.

"But the fundamental economic facts making Scotland stronger than the UK are the same now as they’ve been for the last 40 years"

Stu chooses his long-term figures to always start in 1979 because that's when oil started -  it's fundamental to his attempt to make an economic case. Even without the benefit of hindsight, you just have to glance at the long-term oil graph above to know this statement is simply wrong.

Conclusion: Factually Inaccurate

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4.  Wee Blue Book, page 12.

"The simple fact is that by any reasonable calculation, and even BEFORE the effect of different policies (such as scrapping Trident) is taken into account, Scotland will have more money as an independent country than it does as part of the UK."

Well - like vandalism in a multi-storey car park - this is wrong on so many levels.

"By any reasonable calculation" - This blog is one of many sources of reasonable calculations that disprove this asserted "simple fact".

"Before the effect of differing policies" - He's not even giving himself the out of saying you can't accept GERS because everything will change anyway.

"Will have more money as an independent country than it does as part of the UK" - only if (as we'll see Stu does) you take the snap-shot of 2012 and ignore the most recent figures, dismiss the decline in oil and assume there will be no costs-of-separation or any negative economic implications of separating from our biggest trading partner and facing an uncertain currency future.

But more simply than that: you just had to look at the GERS figures that were published 5 months before Stu wrote this to know it's clearly wrong.

Conclusion: Factually Inaccurate (Spectacularly Wrong)

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5. Wee Blue Book page 13.

"On average, UK spending is around £1,200 higher per person in Scotland than in the UK as a whole. But on average Scotland sends £1,700 more per person to the UK in taxes"

He quotes the FT (those 2012 figures again) and provides a link to the Scottish Government's White Paper to support the £1,700 per head figure. That figure does appear in the White Paper; its for the single year 2011-12 and comes straight from GERS (GERS had been updated and corrected 5 month's before Stu was writing this, so that single-year figure had already been revised down to £1,515 by then).

So definitely not an average and definitely not correct at the time of publishing even for a single year. I summed this up in a comment I have publicly addressed to Stu (and he admits to having read):

If you wanted to use the most recent figure (as you seemed to be trying to do in your original statement) you should really have said "In the most recent year for which data is available Scotland sent around £800 more per person to the UK in taxes".  I recognise that this is significantly less than the higher expenditure we receive; it's an unfortunate truth that doesn't really suit your central thesis.

So if you want to use an average figure to match the figure you (correctly⁴) use when you say "UK spending is around £1,200 higher per person in Scotland than in the UK as a whole" you should really say "on average Scotland sends around £1,200 more per person to the UK in taxes".  The next sentence would I guess then read "We actually get back 100% of the extra money we send to London".

Stu has since tried desperately (via Twitter) to find an alternative definition for the £1,700 figure so that he can defend it as an average. He faces two problems:

1. He provided a link to the source so we know where he got this incorrect figure from (to then incorrectly use)
2. If he's comparing to the £1,200 spend per capita figure (as he is) then he can't choose a different denominator (e.g. by saying he means "every tax-payer" not every "man, woman and child") because then the figures would obviously not be comparable

Conclusion: Factually Inaccurate (a Big Fat Lie)

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6.  Wee Blue Book page 13.

"we have to pay it even if we didn’t need or want the things it was spent on - like nuclear weapons, the London Olympics and the HS2 railway from London to Birmingham, all of which Scotland pays billions of pounds towards because Westminster claims they’re for the benefit of the whole country"

The latest GERS report is very clear on these two points;

• Page 77: Consequently, as discussed in previous editions of GERS, all capital expenditure associated with the Olympics has been assigned to the rest of the UK, primarily London and surrounding area, on the basis that Scotland will not receive a lasting benefit from the infrastructure and regeneration associated with the games.
• Page 77: Within GERS, the expenditure has been apportioned to Scotland in line with the regional breakdown of the benefits of High Speed 2 reported within The Economic Case for HS2, published by the Department for Transport. This assigns Scotland 2% of the total expenditure. 

So per GERS we don't pay for the London Olympics and we only pay for the apportioned value of HS2 that the Scottish Government (not Westminster) decide

Conclusion: Factually Inaccurate

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7.  Wee Blue Book page 14.

"the No campaign likes to make out that Scotland would be the only country in the world with a deficit"

A ridiculous assertion with no citation

Conclusion: Factually Inaccurate

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8.  Wee Blue Book page 14.

"Scotland’s deficit is in fact considerably smaller than the UK’s " 

He goes on to quote the 2011-12 GERS figure again. You know the drill by now: the 2012-13 figures had been available for 5 months and showed that statement to be simply false (blue bar below the axis on the chart above)

Conclusion: Factually Inaccurate

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9. Wee Blue Book page 15.

For most of the 1990s the price of oil was around $20 a barrel, but it’s been consistently over $100 for the last two years. The price of increasingly-rare commodities on which the world depends tends to go up, not down.

He then quotes a couple of selectively bullish forecasts. Surely I don't have to show a graph of the oil price to make my point here?

Conclusion: Turned out to be Wrong

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10.  Wee Blue Book pp 29-30.

Professor Sir Donald Mackay [...] said that Westminster’s figures were underestimating the true value of oil by £8 billion a year. “Mackay points to official forecasts by Oil & Gas UK which suggest an independent Scotland’s revenues in 2017-19 would be almost £32bn, double the £15.8bn forecast by the Office for Budget Responsibility.” - “He says there is no hole in the Scottish government’s oil predictions, as Danny Alexander, chief secretary to the Treasury, has claimed [..] That’s plenty of time to use the money wisely for Scotland’s long-term future

Well it's true that Pro Mackay said that, so Stu gets top marks for finding the most bat-shit crazy oil forecast I've seen yet.  Read that quote carefully: 2017-19 is a two year period and the Prof suggests £32bn over those two years - an average of £16bn a year.

You might, like like I did, be thinking those OBR numbers look quite big. To ensure we're not taking advantage of hindsight (Stu publishing in August 2014, the Prof was quoted in July 2014) I've checked old contemporaneous OBR forecasts.

The most recent OBR figures when Stu was publishing would have been the March 2014 OBR report. You can check for yourself here (see memo page 104) - they were forecasting £7.9bn for 2017-19 or £3.5bn per year; less than half the figure that Prof Mackay was quoting as the OBR's forecast. I've actually checked the March 2013 OBR report as well (see page 102) which shows a 2017-18 forecast of £4.3bn and doesn't include a 2018-19 figure. Wherever that £15.8bn OBR number comes from, it must have been a very out-of-date figure.

Of course we all know that the OBR have subsequently slashed their forecasts - they're now suggesting an average of  c.£0.1bn over the next 20 years. Remember: Stu quoted the Prof  as a credible source saying c.£16.0bn a year.

So Stu quoted a lone-wolf outlier and happily took their incredibly bullish forecast at face value. He also repeated what was clearly an incorrect representation of the OBR forecast that existed at that time. Stu was either trying to fool his readers or just showed appallingly bad judgement.

Conclusion: Very Wrong Indeed

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So that's ten howlers.  I've only covered about 5 pages of the Wee Blue Book and I'm sure if I looked further I'd find more, but I'm stopping there. Surely the case against the Wee Blue Book is now conclusively made?

Remember: the Wee Blue Book was distributed by Yes stalls all over the country and has often been quoted by sitting SNP MSPs. They really do insult he electorate by promoting this bilge.

Of course I know this blog won't make any difference, I know he won't correct any of these errors, I know he will simply respond with ad hominem attacks because that's all he's got.

Given I know there will now be more incoming, a parting few thoughts on Stu and his Wings-men's tirades against me:

• If I'm a "nutter", if I'm "mad mental", if I'm "not smart enough to piss liquid" ... how come it's so easy for me to find clear mistakes in his Wee Blue Book, yet he has still not found one material error in my blog?
• If I'm "just a guy who runs pet-shop websites*", isn't it slightly embarrassing that I'm able to dismantle his work in my spare time?
• Talking of spare time: for me this is a side-show, but for Stu? For Stu churning out this error-riddled and deeply misleading Yes propaganda is a full-time crowd-sourced lifestyle choice. If he's going to take money from well-meaning but gullible punters he really should at least make an effort to get a few of his facts right. Don't you think?

* Not that it really matters but:  it's actually two online business turning over £20m, based in Scotland, employing about 100 people. I'm also a founding shareholder and Non-exec Director of another even larger Scottish business, as well as being a board-level advisor and non-exec for other businesses. I actually think the quality of my analysis and the robustness of my logic is what I should be judged on rather than my cv - but if Stu wants to get into a pissing contest about business or economic credibility, I might humbly suggest that's yet another battle he'll lose.

Now: I'm off to enjoy what's left of my Sunday.

To read about the errors in the Wee Blue Book "Pensions" section see this guest post > Wee Blue Book of Errors Part II: Pensions



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Notes:

1.

The standard line Stu and his Wings-men offer is something like: "Hague assumes everything in the future will be the same as the past, whereas the whole point of independence is to change it. Also you can't base anything on GERS".

Firstly: no I absolutely don't assume that. In fact what I make very clear is that the reverse is the case - the nature of the onshore (i.e. without oil) deficit gap is such that it would be unfeasible for us to manage a sustainable economy without some combination of public spending cuts, tax rises and/or super-normal economic growth.  What I do is scale how much would have to change and show that some combination of a 16% rise in taxes and/or a 12% cut in Public spending would be needed.  If that tax increase is to be created through growth, I observe that 16% growth over and above the rest of the UK would take many decades even on the most optimistic assumptions. The White Paper itself uses an illustration that shows a 3.8% superior growth over a 30 year period might be realistic. We'd need 16% (and have to fund the gap in the meantime).

Secondly: to argue you can't base anything on GERS is to suggest the White Paper was based on a flawed premise, in fact the entire Yes camp's economic case was based on a flawed premise. It also means we can't say we are (actually "were") the 14th richest nation in the world based on GDP, we can't say we contributed massively to the UK during the 1980's (as we did, because of oil) - all we can say is we'd be leaping into a void of the unknown. As I've covered in depth elsewhere on this blog, most attempts to dismiss GERS are based on a misguided understanding of what they represent


2.

As detailed in Annex C of the 2012-13 GERS report

3.

2013-14 GERS: I have applied a GDP deflator so that historic numbers are stated in £ 2014 and I have calculated rUK = UK minus Scotland


4.

Although only in nominal terms and if you compare to the UK including Scotland instead of "rest of UK" - in which case the figure is £1,450 per person over the last 15 years

5.

Some have questioned my justification for referring to Stuart Campbell as a "fake" Reverend. Frankly it's hardly the substantive issue here, but for the record: Reverend (capital R) is "a title prefixed to the name of a member of the clergy" (Chambers Dictionary & others). Stuart has been famously evasive about which clergy he is a member of - if he isn't a "fake" reverend he could clear this up in an instant by simply telling us. I've searched; strangely for such a prolific blogger, he doesn't seem to have let this simple piece of information into the public domain.

It has been suggested that Stuart Campbell purchased his title online from the Universal Life Church (as many gamers did in the early 2000s) - other online ordination websites are available. To take the ULC's own wording on the nature of their ordination process;

It is an unfortunate fact of the ordination process we use – where anyone can get ordained online for free within a matter of minutes – that people who are trying to be funny (or “prove” that we are a scam) exploit the weaknesses of our system and create accounts for things that are clearly not real people. Ordaining your vacuum cleaner doesn’t prove that we are a scam in that it does not impact the legality of the ordinations of real people who use them to perform genuine, legally-recognized ceremonies (like weddings). Ordaining “Adolf Hitler” (which our ordination database reveals that people have done over two dozen times) who lives on “666 Hell Lane” proves nothing other than the fact that you have too much time on your hands and a peculiar sense of humor

If Stuart would like to clear up which clergy he is a member of, I will happily retract my use of the term "fake Reverend" and apologise if it turns out his title is more meaningful than one I could use for my dog if I could be bothered to go through a free online form-filling exercise.

Joan McAlpine and Scotland's Missing Whisky Taxes

A couple of days ago this (authored by SNP MSP Joan McAlpine) appeared in the Daily Record;

A mini twitter-storm ensued as people highlighted the obvious flaws in her argument and quite rightly criticised the article for being deeply misleading.

I was pleased and grateful to be given an opportunity to put The Record straight and they published my response today:

As is the way with these things, my statement was juxtaposed with Joan McAlpine's response to the criticism she'd received. I presume she hadn't seen what I'd written as I hadn't seen her attempt to defend herself

Frankly I think I could just leave this as it stands and trust the intelligence of readers of this blog to see how nonsensical Joan's riposte is.

Just in case though;

"no tax raised from these sales goes to Scotland, also factually accurate"

I'm not sure quite where Joan thinks the money to fund Scotland's public services comes from.

As the Scottish Government's own GERS figures show - the one's which apportion corporation and employment taxes to Scotland as they assume they'd fall were we separate - we in fact receive far more in spending than we contribute in taxes (that's the definition of running a deficit). More than that though: we receive proportionately more in spending than we generate in taxes (which is why we have a £8bn deficit gap). That deficit gap is after assuming "tax raised from these sales goes to Scotland".

Joan may not like the concept of pooling and sharing, but surely she should at least make an effort to understand it.

"duty ... which raises substantial revenue for the London Treasury"

The London Treasury - which then redistributes these taxes throughout the UK by way of public spending, in the process ensuring that we get our fair share back.

Again: Duty is a consumption tax so - quite correctly - only the Duty raised on whisky (or wine or vodka or cigarettes) sold in Scotland is attributed to Scotland in the GERS analysis that we all use.

"corporation taxes - none of which is paid in Scotland"

Technically true - all corporation taxes are paid to HMRC and then we get them (and a lot more) back by way of public spending as the Scottish Government's own GERS figures conclusively show.

"the exported whisky will also raise duty and sales taxes in those countries where it's sold."

So what?

She's said she's not mentioned duty and then goes on mention it - presumably on the off-chance she might still be able to muddy the waters for inattentive readers. Again: duty generated in overseas markets is no more relevant to us than duty we raise on sales of French wine in our market is relevant to the French

"to suggest the £4bn doesn't generate any tax is absurd"

Indeed it would be if anybody was suggesting that; nobody is.

"we can say with 100% accuracy that it generates nothing in Scotland"

Huh? Does Joan really think that those whisky companies employing people and spending money in Scotland are "generating nothing in Scotland"? And of course - at the risk of labouring the point which unfortunately does seem to need labouring - the corporation taxes they pay are attributed to Scotland in the GERS figures that everybody uses.

"unionist bloggers"

This is straight from the approved SNP script - if anybody points out flaws in my argument they must be dogmatic unionists so can't be trusted. I wrote about this yesterday

"most readers will struggle to understand"

A statement made more in hope than expectation I think - she knows she only wins if people don't understand what's actually going on.

"revenues from our most successful export go everywhere except Scotland"

A truly remarkable note to finish on.

Surely by now everybody understands that these revenues go into the UK tax pool from where they are shared back out as public spending. The Scottish Government's own GERS figures very clearly shows that not only do we get some of that revenue back, in the last few years - and given oil decline, for the foreseeable future - we get a larger share from that pool than we contribute. That's the beauty of pooling and sharing.

I do hope the majority of right-thinking Daily Record readers can see through Ms McAlpine's rather clumsy attempt to stoke misguided resentment.

The Fabulously Absolute SNP

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True Story

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A couple of weeks ago I had a cordial chat over coffee with someone who was elected as an SNP MP.

They started by flattering me:  I was clearly a bright and decent guy and during the referendum I had been the only proper challenge on the numbers.

I smiled and thanked them.

They suggested we probably agree about more than we disagree about when it comes to the challenges and opportunities that Scottish businesses face.

I sipped my latte.

They wanted to talk about how Scotland moves forward post-indyref, to seek common ground because we all just want what's best for Scotland.

I put down my cup.

I suggested that it might be difficult to find common ground. I offered that I can contemplate that independence might be the right answer for Scotland, but I'd need to know that they could contemplate that it might not.

I promise this is an accurate description of the exchange that followed:

Oh I'm not an absolutist about these things, I just want what's best for Scotland.

But don't you believe that whatever the circumstances, whatever the economic downsides, however much pain it might cause, independence has to be the right answer? 

Oh yes, absolutely. 

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Absolutely. Isn't that just fabulous?

Of course we carried on with our chat, but in truth there was really nowhere we could go from there.

This is the problem: for many SNP supporters it's a self-evident truth that independence for Scotland is the right answer. If there's a choice to be made between "what's best for Scotland" and independence, independence wins every time. Absolutely.

Of course they avoid admitting this (even to themselves) through the simple expedient of never even contemplating the possibility that "what's best for Scotland" and "independence" might be mutually incompatible.

This absolutist position was famously codified in the SNP's constitution;

Just the two aims there: independence first, furtherance of all Scottish interests second.

In what might have been a below-the-radar clause 2(a) moment, I notice that when the SNP website was recently relaunched their constitution appears to have been changed. Quite remarkably it now takes the form of a first-person statement from Nicola Sturgeon. It seems Nicola now is the SNP. Here's what she says:

My vision is of a successful Scotland which governs itself, taking its place on the world stage alongside other independent nations. The SNP remains committed to Scottish independence as we believe that it is the only way to create a socially just, progressive and successful country.

It's a subtle change of emphasis but the absolute dogmatic insistence that independence "is the only way" remains - and therein lies the rub for any hope of reasoned political debate.

Without getting into some Nietzschean argument about the existence of shared moral absolutes, it's probably fair to say that most people want the same things (like justice, fairness, equality and prosperity) but disagree about the best way to get there. The problem is you can't have a debate about the best way to get there with someone who's already bought a non-refundable ticket.

Many SNP supporters protest that they're not nationalists whilst simultaneously branding those who disagree with them as unionists. To contemplate that others may be more open-minded - that others may have reasoned their way to a conclusion, may be willing to consider a variety of possible answers - would require them to admit to themselves that their minds are closed. The easier way out is to assume that those who disagree with them must be the mirror-image of themselves: if you don't think Scottish independence is the right answer it must be because you're a dogmatic unionist.

At a personal level I experience this when I'm branded as "a unionist blogger". I'm not a unionist blogger because I'm not dogmatically opposed to independence, I don't start from that position and work my way back. That means my approach is in stark contrast to those nationalist bloggers and campaigners who use the term unionist to try and create a perception of equivalence. What I think they're really saying is: look, you know we'd make up any old shit to sell the cause of independence, so you can safely assume they're doing the same and ignore anything they say.

It's revealing that the only caveat Nicola Sturgeon has placed on another referendum taking place is popular support. Nothing to do with - for example - the economic conditions or the practical financial implications of independence. To introduce those concepts would be to admit that there may be logically sound economic reasons for staying in the UK, reasons that best serve the interests of the Scottish people - she's constitutionally prohibited from admitting that possibility. That, I'm sorry to say, makes the SNP a difficult party to trust.

So if I sometimes slip into the trap of "SNP bad", that's why. I want to be able to look at specific initiatives taken by the SNP and assess them on their own merits. Of course there are good people within the SNP and some of their policies will be sensible, will succeed in delivering good outcomes. I don't want to find myself wishing the SNP screw up policing, health or education because in doing so they damage peoples' lives.

But I can't constructively engage with a party that I can't trust, a party that is absolutely committed to independence at any price.

Electoral Commission Response

Last week I wrote to the electoral commission. I enquired if recent news reports about leaked emails surrounding Business for Scotland may have implications with regards to the electoral commission's rules about separately registered campaign bodies "working together". If you're unfamiliar with the background you can read the detail here > Tugging at Threads.

The electoral commission responded publicly last week (without informing me, the "complainant") and their conclusion was unambiguous:

The Commission has found no evidence during its assessment that the SNP and BFS worked together in a way that broke the law. There is therefore no need to open a full investigation.

Fair enough. One of the roles of the electoral commission is to respond to enquiries from the public. If in the process this helps a wider understanding of electoral commission guidelines (I'll come on to explain what I think this judgment clarifies) then all well and good.

Of course there was some rather hysterical reaction to the electoral commission's findings from the usual suspects who referred to my enquiry as "nonsensical", "malicious" and "sensationalist". You can read my two emails for yourself and decide if that is fair.

I have since discovered I was not the first to raise these questions, but I presume Business for Scotland meant me when their press release referred to the "original complainant" being "a well known unionist blogger and social media troll" (translation: somebody who looks at economic data and challenges people like Business for Scotland when they blatantly misrepresent both the economic facts and the nature of their own organisation).

I of course did ask the Electoral Commission for some explanation of their judgement and received a brief email.  Their explanation fascinated me and I think may have very significant implications for how regulated bodies behave in future referendums.

Here's the reply I have sent them; I hope it speaks for itself.

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Thank you for your response.

It is unfortunate that you didn’t notify me of these findings on the day that both the Electoral Commission and Business for Scotland put out press releases about them. I of course accept your apology and explanation that this was simply an oversight on your part.

I would hope that you welcome engagement with people wishing to understand the rules you enforce and I'm sure you would not want to discourage other people from coming forwards with any concerns they may have. With this in mind I would be grateful if you could confirm whether or not you consider the nature of my initial enquiry to be in any way "nonsensical",  “malicious” or “sensationalist” (these are all words used by Business for Scotland in their press release following your judgement).

Turning to the contents of your email, there would appear to be two key elements to your conclusion and I hope you will be able to offer some clarity about both;

1. The point of law: what activities might be considered to constitute “working together”?
2. The point of fact: what would constitute “reasonable grounds to suspect”?

The point of law: What activities might be considered to constitute “working together”?

I know several campaigners during the independence referendum interpreted these rules more strictly than you appear to and may have compromised their effectiveness as a result. It strikes me therefore that your assessment may provide some helpful clarity as to what would not be considered “working together”.

You state:

“Under SIRA schedule 4 paragraph 20, campaigners were considered to be working together if they had agreed and implemented a common plan or joint campaign during the referendum period to promote or procure a particular outcome”

You go on to say

“… does not amount [to] having agreed a common plan to work together as defined in the legislation”

So it is clear that you assessed this enquiry on the basis of whether or not there is evidence that the bodies involved “agreed a common plan to work together as defined in the legislation”.

Here is the full text of the relevant clause in the legislation (the highlighting is mine):

“20 (1) This paragraph applies where— (a) referendum expenses are incurred by or on behalf of an individual or body during the referendum period, (b) the expenses are incurred as part of a common plan or other arrangement with one or more other individuals or bodies, (c) the common plan or arrangement is one whereby referendum expenses are to be incurred by or on behalf of both or all of the individuals or bodies involved in the common plan or arrangement with a view to, or otherwise in connection with, promoting or procuring one particular outcome in the referendum, and (d) there is a designated organisation in respect of each of the possible outcomes in the referendum.”

The semantics of this are clearly important. I know many campaigners have interpreted “other arrangement” to mean they should avoid coordinating ongoing decisions around activity and expenditure during the campaign (for example by attending board meetings of other bodies and/or directly discussing how resources should be focused).

One possible interpretation of your assessment is that an “agreed … common plan” would have to be seen to be in place before two bodies would be deemed as working together. Can you confirm if this is correct?

If this is correct could you formally confirm that this sets the precedent that campaign bodies are free to attend each other’s board meetings (and by implication any other planning and strategy meetings) and to contribute to each other’s decisions about how to focus resources, so long as a “formal plan” can’t be seen to exist?

I may have interpreted your judgement incorrectly. It’s possible that - although your explanation refers only to the lack of evidence of an “agreed plan” - you also concluded that there weren’t sufficient grounds for suspicion that some “other arrangement” may have been in place.

It would be helpful therefore if you could clarify whether you considered the wider definition of working together which your own guidance notes describe as:

if: you coordinate your activity with another campaigner – for example, if you agree that you should each cover particular areas, arguments or voters; another campaigner can approve or has significant influence over your leaflets, websites, telephone scripts or other campaign materials

It strikes me that these are all the sorts of things that might be discussed at board level. If the above only applies if the coordination happens as part of an "agreed plan" (as opposed to as part of an ongoing decision making process) then that clearly raises the threshold for what would be considered working together. I know I would not be alone in welcoming clarity around this point.


The point of fact: What evidence would constitute “reasonable grounds to suspect”

Quoting directly from your email to me you state:

“Our assessment looked at those press reports as well as the concerns you raised about their implications [..] You referred to comments attributed to Peter Murrell, and Tony Bank [sic] about Michelle Thompson’s [sic] employment, and Ivan McKee about Colin Pyle’s exclusion from BFS meetings. While the SNP and BFS were registered with commission [sic] as permitted participants supporting a ‘yes’ outcome in the referendum, this and the contents of these emails, if correctly reported, does not amount having [sic] agreed a common plan to  work together as defined in the legislation.”

Clearly what you deem to be an appropriate level of assessment will depend on your answer to the question surrounding the point of law: are you just looking for grounds for suspicion that a “common plan” existed or would some “other arrangement” (such as active involvement in ongoing decision-making) count as potentially working together?

If the threshold for “working together” is evidence that a plan existed – something that you could put your hand on and say “there’s the plan” - then I accept that my enquiry warrants no more than the apparently cursory assessment it has received.

If, however, you interpret the question of law more broadly (to include “other arrangements” such as attending each other’s board meetings), I think it is reasonable to ask more about the nature of the assessment you carried out.

You make no mention in your assessment (or your press release) of Yes Scotland. Obviously you know Colin Pyle was Head of Development for Yes Scotland which was a separately registered campaign body. I presume this is merely an oversight on your part and we are to infer that you have also concluded that there is no evidence (or there are insufficient grounds for suspicion that) BfS may have worked together with Yes Scotland.

You state that you “looked at the press reports” and refer to “the content of these emails, if correctly reported”. This seems to imply that your assessment did not go any further than reading the press reports – could you confirm is this is correct?

This matters because your email assessment refers to “Colin Pyle’s exclusion from BfS meetings” which seems to imply that you have concluded he did not attend BfS meetings. The blog by Paul Hutcheon (the source for these press reports) concluded “It is unclear how the Pyle issue was resolved”.

I recognise that this assessment process is simply about determining whether sufficient grounds for suspicion exist to launch a full investigation, but your process documentation states that the assessment process can include “making initial inquiries of the subject of the allegation and other individuals or organisations”. I would therefore be interested to know if you deemed it worthwhile to make enquiries in particular with respect to the specific questions I raised in my second email (which you acknowledged you would be considering):

1. Did Mr Pyle attend any BfS Board meetings (before or after this email exchange)?
2. If he did, did his attendance involve interventions or knowledge transfer that might constitute “working together”?

Of course depending on the “point of law” question above, you may be signalling that it is acceptable for members of different registered bodies to attend each other’s board meetings and so these questions are not relevant. If this is the case, among those who will be surprised will be Ivan McKee himself who, if the emails are correctly reported, stated:

“Frankly struggling to see how someone in the payroll of Yes Scotland coming to a BfS meeting can be classed as anything other than ‘working together’.”

In conclusion:

• It may be simply that your judgement helps inform campaigners that the threshold for what might be considered "working together" is in fact far higher than many thought. If this is the case I am sure a lot of people will welcome this new clarity
• It may be that you carried out a wider assessment than your brief email suggests and you have in fact confirmed to your satisfaction that Mr Pyle did not attend any BfS meetings. It may be that if you had reasonable grounds to suspect that he had attended BfS board meetings this may have triggered an investigation. Again, I am sure I will not be alone in wishing to know which is the case.

I hope you appreciate that my tenacity on understanding the detail here is motivated by nothing more than a desire to ensure that the rules you enforce are as widely understood as possible and fully adhered to.

I look forwards to your response.

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Tugging at Threads

There many so many fascinating threads to the Michelle Thomson story that I think a rather significant one may have been somewhat overlooked: in their haste to throw Ms Thomson under the bus, have the SNP unintentionally leaked information which may be of interest to the Electoral commission?

I emailed this letter to the Electoral Commission yesterday (09/10/2015)

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Dear Sirs

I read with interest a recent article in the Sunday Herald which revealed some interesting information regarding the management decision making processes within Business for Scotland;

The paragraph which particularly piqued my interest read as follows:

He [Chairman Tony Banks] added that SNP chief executive Peter Murrell – described as ‘PM’ in emails – believed there was duplication in the Macintyre-Kemp and Thomson roles: “There have been remarks made by PM regarding having the both of you and the fact both of you should have been fund raising over the last few months! He does not think that we need both of you.”

The report went on to detail how one of the individuals referred to (Ms Thomson) subsequently had her consultancy contract terminated and was no longer paid for her role. It seems clear that Peter Murrell had a direct influence on that decision (there may even be questions as to whether his influence means he would have been considered as a “Shadow Director” under the Companies Act (2006)).

Of course both The Scottish National Party (SNP) and Business for Scotland were registered referendum participants who – as I understand it – have to abide by your guidelines.

Your guidelines clearly state:

Campaigners can work together if they wish to do so. Some combined spending will count towards the limits for each campaigner involved. This is to stop people getting around the spending limits by coordinating several campaigns at the same time

The guidelines go on to clarify:

The guiding principle is that, in all cases, you should make an honest assessment, based on the facts, whether you or another campaigner are spending money as part of a common plan or arrangement.

In our view, you will be very likely to be working together if[ …] you coordinate your activity with another campaigner – for example, if you agree that you should each cover particular areas, arguments or voters; another campaigner can approve or has significant influence over your leaflets, websites, telephone scripts or other campaign materials

It appears to me that the Herald article offers evidence that – through Peter Murrell’s direct involvement - Business for Scotland and the SNP were indeed “working together” and that specifically the SNP were exerting influence over Business for Scotland’s fund-raising activities and expenditure.

I would be interested to know if this “working together” was declared and accounted for when assessing the spending limits of each of these campaigners. If it wasn’t, will the electoral commission be formally investigating the relationship between these two separately registered campaign organisations and assessing whether any electoral commission rules were broken or campaign spending limits breached?

Yours sincerely

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Of course we knew all along that Business for Scotland were an SNP front organisation (as I detailed at the time > Who Do Business For Scotland Represent), but despite the laughably poor quality of their output it seems many media outlets were taken in.  As a direct result I'm sure some voters were fooled and I suspect well-meaning businesses were duped into becoming members of BfS.

They were brazen about this - let's not forget that their website stated very clearly:

"Business for Scotland is an independent and political party neutral business and economic policy think tank and network"

In fact at the time of writing they have the brass-neck to still state this on their website.

I raised this directly with Ivan McKee (one of their Directors and more vocal spokespeople) in a public debate during the referendum - he was outraged at the very suggestion that they might have close ties with the SNP. Possibly he was worried about electoral commission rules; I don't know.

But to learn that Peter Murrell may have been directly involved in the day-to-day management of BfS takes this to a whole new level. There are electoral commission spending limit limits for a reason. Imagine for a moment that there were suspicions that the Better Together campaigns had broken electoral commission rules - we'd be subject to a grievance frenzy, the usual suspects would be whipping up a crowd-funded mob. We'd never hear the last of it.

Of course had there been a Yes vote the participants all knew that any subsequent electoral commission investigation was hardly going to reverse it. Maybe that led the SNP to throw caution to the wind and go all in. It was, after all, a once in a generation opportunity.

I don't know if what we now know of Mr Murrells's involvement in Business for Scotland means any spending rules were broken - I trust the Electoral Commission to work that out and take any appropriate action.

One last thought: we only know about all of this because of the leaks triggered by the Michelle Thomson story.  If the SNP were hands-on with Business for Scotland, were they perhaps coordinating activities between other registered Yes campaigners as well?

I don't know what investigative powers the electoral commission have, but I hope they will be using them to the full.


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ADDENDUM
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Following the wide ranging coverage my letter to the electoral commission received in the national press I was alerted to another report on the leaked emails which suggested the Yes Scotland might also have been working together with BfS.

Today (12/10/1015) I have sent the following follow-up to the electoral commission

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Dear Sirs

Further to my previous correspondence (below) I read today of another extract from the leaked emails as reported by journalist Paul Hutcheon

He highlights an email in which reference is made to Yes Scotland Head of Development Colin Pyle possibly attending Business for Scotland (BfS) board meetings.

One of the BfS board members Ivan McKee explicitly raises concerns that this would constitute “working together”.

It is unclear from the article if Mr Pyle had already attended BfS board meetings or how the debate was resolved with respect to future board meetings.

I trust that if you decide to investigate the issue of BfS possibly “working together” with other campaign organisations that you will directly address these questions:

• Did Mr Pyle attend any BfS Board meetings (before or after this email exchange)?
• If he did, did his attendance involve interventions or knowledge transfer that might constitute “working together”?

Finally: given we are now (by chance) aware of communications between the board of BfS and both Peter Murrell (of the SNP) and Colin Pyle (of Yes Scotland), will you be using your investigative powers to ascertain whether BfS may have been “working together” with any other representatives of these or other registered campaign bodies?

Yours Sincerely

Kevin Hague

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