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Monday, 13 February 2012

Who Does CBI Scotland Speak For?

Thanks to the diligent work of Calum Cashley, an SNP party member and blogger, we can have a fairly accurate picture of just who is represented by CBI Scotland. In January, Calum produced a very good piece of work, in which he calculated exactly how many firms are represented by this organisation. Acccording to Cashley's research, there are 296,780 business enterprises in Scotland, with 148,760 Scottish owned. The CBI Scotland's own Business Directory shows that the membership amounts to the grand total of 62 or 0.04% of the total. In an attempt to give a fair and accurate picture, Cashley decided to include only the medium sized and large firms, which came to 2,695. Membership of the CBI therefore accounted for only 2.3% of this smaller figure but, given the amount of publicity it attracts, the attention that is given to every utterance of its Council, we could be forgiven for believing the entire Scottish business community had one single mouthpiece - CBI Scotland. By contrast, the Federation of Small Businesses has more than 20,000 members.

That doesn't answer the question, "Who does CBI Scotland speak for? because it has been found that representing Scottish businesses is not the same as speaking for them. There have been numerous complaints over the years, about statements, purporting to come from the Scottish business community, which are later denied by firms who claim never to have been consulted. In January Ian McMillan, Chairman of CBI Scotland, issued a statement to the effect that the membership were "very much at one" with the Council, that the referendum on Scottish independence should be held "sooner rather than later". McMillan claimed the decision had been taken at a recent meeting of the organisation but an immediate rebuttal from several prominent companies in Scotland, appeared in the Sunday Herald, forcing McMillan to admit his claim was false. The rebuttal by the firms was given in language that left no doubt that McMillan did not make a mistake or might have been inadvertantly misled by what was said at the meeting. Was McMillan's claim a deliberate attempt to mislead, in other words, was it a lie?

Barclay's Wealth said, "Barclay's is totally agnostic about when the referendum should be held." Both Edrington and the Law Society of Scotland made very similar statements while others said they had not discussed the issue and therefore held no position. Aquamarine Power said they "felt very strongly that this is a decsion for the SNP government", all of which calls into question other statements and claims made by CBI Scotland. The distinction between "representing" Scottish business and "speaking for" Scottish business will become even more important, the closer we get to the referendum. The Daily Mail may not be popular with Nationalists, with good reason as it has committed to campaign for a No vote with all the "power it can muster" but it has to be remembered it is the most popular newspaper in Scotland. Today, it runs a piece highlighting a series of ten question CBI Scotland has posed, allegedly to express concern for employment in an independent Scotland.

Some of the questions are a complete nonsense and could not be answered by any government, unless they believed in crystal ball gazing, which suggests they were posed for that reason, not in the expectation of receiving any kind of answer. Of course, it will then be argued that more and more uncertainty will have been created, leading to a "complete lack of confidence for employment prospects in an independent Scotland" in the business community. As the ruling Coalition's cuts began to bite and figures for employment prospects at the beginning of January, created mounting concern, particularly among the trade union membership, Ed Balls was asked to say what the Labour Party would do about those cuts in public expenditure, if they were returned to office. He refused, claiming that it was impossible to answer that question this far away from the next election. This means that Labour, while being opposed to the Coalition's cuts on the grounds that they are wrong and immensely damaging to the economy, refuse to commit to restoring them. The next election is no more than four years away.

This is standard fare from Westminster politicians, who refuse, even during the customary three week election campaign, to commit to any spending proposals "until they see the books". This is deemed acceptable by the business community but nevertheless, they demand commitments and spending plans from a Scottish government years in advance of taking office. The following is a selection of some of the questions posed by CBI Scotland:-

1) How would the Scottish Government fund current levels of public spending in the current era of declining oil and gas production?

2) How would Scotland's inflation target be set and met, and what level of interest rates would be set to control inflation?

3) Has the government assessed the risks of potential losses of business to Scottish firms operating in the remaining parts of the UK after secession?

4) What are the estimates of the costs to businesses in Scotland of exchange rate risk and currency conversions between Scotland and England?

5) How would an independent Scotland sustain the immediate loss of jobs in the navel and shipbuilding industries?

Unfortunately for CBI Scotland, on the very day their "killer questions" were published, the Centre for Economics and Business Research published their new report which showed that the deficit in Scotland between revenues and expenditure, is exactly the same as for the UK, which prompted The Scotsman to head up a leader, "Myth of Scotland as subsidy junkie of the UK is scotched". Of course this myth has been scotched regularly, by the SNP researchers thirty odd years ago and more recently by Jim and Margaret Cuthbert, not that it matters to CBI Scotland and other Unionists who continue to foster the false claim. The recent "find" in the North Sea West of Shetland has just increased the life of the oil fields for another fifty years and there will be other "finds" discovered years ago, which will be brought on stream as and when it suits. What should concern CBI Scotland and the Unionists, is what will happen to the rest of the UK when it is denied the oil revenues, which have kept the economy afloat since 1975. After independence, Scotland will continue to have the revenues, the rest of the UK won't but little or no concern for that part of the country, is ever expressed about the consequences of having the oil taps turned off. The Daily Mail somehow missed that report.

If the referendum timetable is adhered to - vote in 2014, independent  2016 - we are four years away, at least, from an independent Scottish government. Balls cannot say whether Labour will reverse cuts, which Labour insists are unecessary and damaging, in the same time period. He was not asked to give figures, he was not asked to even estimate or anticipate the nature of the damage he claims will be done; he was simply asked to say whether or not he would reverse a policy - and refused. What would have been his response if he had been asked, "What rate of interest will you set in four years?" No? Well, how about two years, or one year maybe; six months even? CBI expects a Scottish government to say not only what rate of inflation there will be in four or five years from now, but the interest rate that will be set in order to combat an inflation rate that cannot even be guessed at.

I don't agree with it but the SNP has committed to retaining sterling in the immediate aftermath of the restoration of independence or "secession" as CBI Scotland seems to prefer. The party has been heavily criticised for it, with critics claiming it is not independence, but that is the current policy and we have to assume that is what will happen. "We" obviously does not include CBI Scotland as it wants to know what the costs of currency conversion will be and the costs to business of exchange rate risks. They either have not noticed that part of SNP policy, or don't believe that is what will happen or, well they will have to explain that one a bit more. As critics of the policy have pointed out that London will continue to control monetary policy, set interest rates just as they do now, will even have some control over fiscal policy, CBI Scotland should be applauding it, as I suspect it was drawn up with them and the business community in Scotland in mind.

Finally, there is the old "job losses" threat, fear, paranoia, call it what you will. It is the same argument raised every time there is any mention of leaving the EU; what about all the jobs that will be lost? "There are three million jobs at stake." The UK currently runs a massive trade deficit with the EU, something which has grown larger every year. For those who are hard of thinking or who would sell their grandmother if it meant remaining in the EU, that means they sell far more to the UK than we sell to them. If the UK left the EU, it would potentially be losing one of its largest single markets. According to the Europhiles, all those European exporters would refuse to sell us their goods and services if we left. The unemployment in the EU would suddenly rise by about 3.5 million. Does anyone actually see that happening? Similarly, Unionists see only one side of the argument and if Scotland decided to become independent, England would stop selling us their goods, all cross border trade would cease. Point out the silliness of such an argument and the customary response is, "Why should they buy our goods if we cut ourselves off from them?" Maybe it would be because we were buying their goods, or would they be so spiteful, they would create unemployment in England just to get back at us? If it were true, what would it say about the English as a people? CBI Scotland assumes there will be job losses, among those companies that do business in the rest of the UK, therefore want to know what a Scottish government is going to do about it and how much is it going to cost them? CBI Scotland obviously think as little of the English as they think of their fellow Scots.

There comes a point where rational argument becomes impossible because we are not debating with rational people. The frightening thing is that these people are running some of our biggest companies and if they are not threatening to leave the country a la Mone, they are raising the kind of arguments one would expect to get from a rather dim child. In the old days, they only ever produced one side of the balance sheet viz. how much was spent in Scotland, figures which have been shown to be totally false. The current argument is all about costs. Having successfully denied us the information for years about the tax revenues, until it was forced out of them, they managed to hide the McCrone Report for over thirty years, which showed how they had been stealing the oil revenues all of that time. Obsessed with the costs or the price of everyuthing, they have completely lost the ability to appreciate the value of anything.

For example, what will the peace dividend bring to Scotland? How much will we save by getting rid of Trident and how much is it going to cost the rest of the UK to find another home for it? Or is that one of the items they appreciate only too well and don't like the answers very much? Once we have control of government spending, and use the money on projects which we want to prioritise and the multiplier begins to kick in, has CBI Scotland ever given any thought to the revenue side of the equation? Obviously not because outside of oil, there is a total absence of any consideration of revenues or income in their calculations. Anyone who gives any thought to the questions being posed must realise that this is not an organisation seeking truth or even information. It is an organisation which will do what it can to stop the people of Scotland voting for independence and the more uncertainty it can spread, the happier it will be.

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