Sunday, 21 February 2016

Playing the Long Game

As an adult, do you honour the promises you made to yourself as a child? I do.

That's why you'll sometimes find me lingering a little longer than necessary at the confectionery fixture in a garage forecourt shop. The grown man able to buy any sweets he likes is pausing to allow his 12 year-old self to appreciate the moment. As I promised myself I would.

That's why - after I've climbed into my car and thrown another Curly Wurly onto the pile of uneaten confectionery on the passenger seat - you'll see me pause and smile. I'm allowing the 16 year-old me to appreciate the sense of freedom that comes with being able to drive. As I promised myself I would.

That's why one day I'll stop working for money and start writing for pleasure. The teenager who chose maths and sciences over English - who chose the pragmatic over the romantic, who chose business over pleasure - will finally find time to just sit and write. As I promised myself I would.

The past may be another country, but we shouldn't forget the promises we made when we lived there.


For me, keeping promises-to-self is an important part of "playing the long game". Apart from motivating and rewarding patience and tenacity, playing the long game forces you to think through the long-term consequences of your actions: don't make promises you can't keep, don't make assertions you can't support and don't pursue short-term objectives by offering long-term hostages to fortune.

Which brings us - of course - to the current political landscape in Scotland.

The SNP have famously been great players of the long game, eschewing short-term ambition and personal agendas (some might say principles) in favour of their one over-riding objective of independence for Scotland. But something changed during the referendum campaign when they thought they could see their end-goal in sight: they got summit fever. Like the climber pushing on to the peak despite bad weather closing-in, they dismissed any concerns about how they'd climb back down. The summit was all that mattered, the implications of possible failure were ignored. They stopped playing the long game.

Long after it became clear that the economic case in the White Paper was the stuff of fantasy they pressed on. They gambled the economic future of 5 million people on a set of flaky figures, they had no currency "Plan B", they defended their oil revenue forecasts when it was simply no longer credible to do so. Of course if they'd achieved a Yes vote none of that would have mattered because there'd be no turning back. Disgruntled voters may have come to realise that they'd been duped by a false prospectus, but they'd have no choice but to suck it up.

They didn't seem to care that, in the event of a No vote, they were leaving a hostage to fortune by hanging their case on £6.8 - 7.9bn of annual oil revenues. They may not have expected the out-turn to be as bad as the £0.1bn we're now seeing, but let's be clear: long before the referendum date they knew that £7.9bn pa. was the stuff of pipe-dreams. So in their summit fever they took the risk that they could be left exposed as reckless chancers, their economic credibility in ruins. The only thing that could spare them would be some big, bold, distraction, something to draw attention away from the unravelling of their White Paper forecasts - something like the fiscal framework negotiations.

Because of course the SNP weren't alone in falling prey to summit fever. With polls swinging dramatically towards Yes and the referendum date looming, the major Westminster parties panicked and cobbled together the now infamous Vow. Whether the Vow was necessary to secure a No vote we will never know, but what we can be certain of is that it was loosely defined and wide open to interpretation. As a result it has offered the SNP a life-line, the distraction they so desperately need.

Instead of digesting the scale of economic trauma we'd be facing if the SNP's false prospectus for independence had won the day, instead of focusing on the SNP's extremely patchy record in domestic office, voters are now distracted by a fresh head-to-head battle between Holyrood and Westminster. It's us versus them, it's Scotland versus the rest of the UK, it's the SNP fighting for Scotland's best interests. They're slap bang in the middle of their comfort zone.

Except that even here the expedient political rhetoric they adopted during the referendum is coming back to haunt the SNP, leaving them open to accusations of rank hypocrisy.

They find themselves tenaciously defending the dynamics of the Barnett formula, tacitly accepting that all of the objectively "fair" alternatives are not as beneficial to Scotland as the Barnett formula is in practice. The fact that they have to lean so heavily on an extremely broad interpretation of the "no detriment" clauses gives a lie to the notion that the existing settlement is somehow unfair to Scotland. Of course because they're currently negotiating in the best interests of Scotland (at least from a short-term economic perspective) it's hard to see this causing them too much harm. That said, assuming a deal is reached that preserves the economic insulation offered by Barnett, it'll be interesting to see how they square this particular circle when next trying to ramp up the grievance rhetoric.

But the latest point of disagreement in the fiscal framework negotiations is the one where the SNP really have been hoist by their own petard. The point of contention is the assumed one-off costs of establishing the systems to administer Scottish taxes (and the ongoing costs of running them). This matters because the UK Government is committed to paying a share of these costs, so it's important to Scots that they're not underestimated.

In Nicola Sturgeon's latest letter to David Cameron she has stated that, just for the limited welfare powers currently being transferred, the set up costs would be "between £400m-£660m". The obvious problem here is that during the independence referendum the SNP argued that the entire administrative infrastructure for an independent Scotland could be set-up for just £250m. This glaring discrepancy has not been lost on those negotiating on behalf of the Treasury - you don't have to be great exponents of the long game to remember fractious arguments that took place less than two years ago.

It's worth recapping quite how aggressively the SNP fought their corner over this £250m figure at the time. The approach they took was one which was well tried and tested during the referendum. First they found a tame expert willing to sacrifice their credibility for a political cause. As this blog highlighted at the time (Dunleavy and the Costs of Independence), some quite remarkable logical contortions were performed by said expert to deliver what was a frankly meaningless £200m headline figure. Then Salmond went into full Mr Bombastic mode, waving this number as if it was indisputable proof that the Treasury (who had suggested a figure of  up to £2.7bn) were up to no good. He demanded an investigation - of course he did - into the Treasury's "grossly misleading claim" and pronounced that it was "now very difficult for people in Scotland to trust any information on the independence referendum issued by the UK Government."

Without gaining anything like the headline coverage that Salmond's faux outrage did, further work by Oxford Economics suggested the figure was in fact likely to be £1.5 - £2.0bn and even drew an admission from the tame academic Prof Dunleavy that the figure could be up to £1.5bn. The Centre for Economics and Business Research (CEBR) subsequently suggested a figure of "nearly £2.5bn".

It's hard to believe that anybody would have been put off the idea of independence by the thought of a couple of billion of set-up costs, but the SNP apparently couldn't resist picking a fight with the UK Government over this and had no qualms pushing the patently ludicrous figure of £250m. I guess it's in their nature.

Salmond's bombast succeeded in winning the battle of the headlines at the time, but maybe if they'd kept their eye on the long game they'd have realised that playing silly-buggers with important numbers like this could one day come back to bite them.

It normally does.


Kevin from Walsall said...

As a potential "leaver" in the EU referendum, I find it annoying that someone as incompetent as Sturgeon thinks that Scotland should follow her lead in voting to stay in the EU.
It is plain that if a Yes vote in the Scottish referendum had won, Scotland would now be in an awful position, no oil revenue, no pound, no membership of the EU, no hope.
The SNP's strategy consists of hanging onto power by slagging off the UK government's policy of fiscal care whilst greedily sucking at the teat.

bucksboy said...

Slagging off UK institutions probably didn't do their cause much good either, the self same people they are having to negotiate with at the moment. It sounded infantile at the time, not the kind of noises a government of a newly independent country in waiting should be making.

The deviant Westminster narrative might have seemed like great mood music to play at the time as they introduced their shiny new kind of politics and politicians, but the halos are slipping now and the moral high ground has certainly subsided, showing them and and by implication the institutions they occupy to be no less capable of producing ethically dubious behaviours than anyone or anywhere else in the UK.

The temptation to go for the jugular proved too great.

Sticking with the short-term theme, a quick fix might be for the SNP membership to purge its current leadership (that white paper will be like a millstone around the neck of the SNP until it does). I seriously doubt that on those salaries they will jump for the good of the party, so may need a nudge!

vicfirth62 said...

Excellent Kevin. But the SNP have a firm grip over Scotland & thousands of loyal supporters who will continue to support the SNP regardless.

David GREEN said...

Kevin, Please correct me if i am wrong, but my understanding, on the limited information available, is that the revenue set-up figure agreed with the UK Government, is GBP 200 million, or about 80% of Salmond's estimate. If Miss Nippy's figures were what she was hoping for. then the Scottish Government got a pittance for setting-up costs.

However, something very odd is going on, and I don't know what. I am told that Sturgeon's announcement of the deal was very downbeat. If true, my guess is that, either she didn't get something she wanted, or she has been leant on very hard about something. The obvious, if erroneous guess, for the first explanation is that the setting up costs of devolving tax collection actually agreed upon used Salmond's ridiculously low estimate. They were so low that a bit here and there wouldn't matter. Or, for the second explanation, Osborne and Cameron have said to Sturgeon, on strictly Privy Councillor terms, no more Mr Nice Guys about tax help for North Sea oil exploration in the next budget if you start cutting up rough in public about the Fiscal Framework. As I have said in a previous response, rUK might regard GBP 8 billion a year as a not unreasonable rent to pay for Faslane. And if Cameron pulls off his EU referendum, rUK won't be paying for Border controls in the near future either. Keeping the SNP sweet (and quiet) in the short term, and putting money on them to cock up the medium term seems like a moderately good bet from where I am.

Anonymous said...

If Westminster had leant on Sturgeon you would know about, she cannot help portraying Scotland as a victim, to keep the mob seething.

Your first guess is probably correct in that she had to accept the figures due to the lies of the white paper.

Anonymous said...

Can't wait for the new Gers figures to be Published , it might finally wake up some of the numerically illiterate.

There must surely be some interesting TV programmes made that will be shown on the run up to the so called Indy Day degreed by Salmond.