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Archive for October, 2012

Of The SNP, EU and South Sudan

A week is a long time in politics they say. Things can change very quickly – just ask Alex Salmond about that.

Not so long ago he was signing an agreement with David Cameron that will give him the power to call a referendum on Scottish independence. But since then he has seen a split in his party on NATO membership over which two of his MSP have since resigned from the SNP. And this week he was roundly condemned as a liar over the issue of legal advice on a theoretical independent Scotland’s relationship with the EU.

In short, here’s how things unravelled for the SNP. On Tuesday Nicola Sturgeon made a statement to the Scottish Parliament on the responses to the Scottish Government’s consultation on all matters referendum. A storm erupted when she said that legal advice would now be sought on the issue of the future relationship with the EU.

The reason for the storm? Alex Salmond has repeatedly stated that advice had already been sought. He had refused to reveal its content, citing convention that legal advice given to ministers should remain confidential. Even when the Information Commissioner ruled that the public interest made this an exceptional case and that he should reveal all, the First Minister went to court to challenge the ruling.

So what could it mean when the Deputy First Minister told MSPs that there had never actually been any legal advice in the first place? Paul Martin MSP led the Labour attack, saying, “It appears the First Minister is a liar and used taxpayers’ money to try to cover up his lies.”

The heart of the matter relates to an interview with Andrew Neil in which he asked Alex Salmond, “Have you sought advice from your own Scottish law officers on this matter?” Salmond replied, “We have, yes, in terms of the debate.” He then stressed that he could not “reveal the legal advice of law officers” but, citing Government documents which claim an independent Scotland would automatically be a member of the EU, added: “Everything we publish is consistent with the legal advice we receive.”

Now any reasonable person who saw the interview, the key part of which was shown on every news programme this week, could only come to one conclusion. Legal advice was sought and received. But that’s not what Nicola Sturgeon was now saying.

The First Minister was forced to make a statement to the Scottish Parliament to explain himself. He claimed that he had been given generic legal advice, but that what was now sought was specific advice in light of the agreement with David Cameron. Quite what the mechanics of the referendum have to do with possible EU membership is not clear. And Salmond also claimed that he could not even reveal whether specific advice had been sought without permission.

So the First Minister’s argument seems to be that the court case was to avoid revealing that there was nothing at all to reveal. What a good use of public money that was then.

Is this all just a misunderstanding? A confusion of terms? Perhaps. But the impression that is left is of a First Minister who at best was playing with terminology to suit his own ends and at worst was lying.

And in a new twist this weekend a story in the Independent suggests that Salmond’s legal advisors told him something very different from his repeated claim that an independent Scotland would automatically be an EU member. The story cites senior legal advisors telling Salmond that “an independent Scotland’s future inside the European Union was not automatic and was a “policy objective” that required “detailed negotiations””.

No wonder the First Minister wanted the whole think kept quiet.

It is not the first time that the SNP have been caught out over making assertions based on nothing and with no evidence to back them up. In a TV debate Nicola Sturgeon argued that letting the Bank of England set interest rates for a theoretical independent Scotland would not be a problem, as Scotland would be represented on the key Monetary Policy Committee. It later emerged that this had never been discussed with, let alone agreed by, the Bank.

But where does all of this leave us in relation to the core issue of whether an independent Scotland would actually be a member of the EU?

Well, the legal position is confused. There are several possible outcomes, and they depend on exactly how Scottish independence would be viewed in terms of international law. There is simply no precedent for a devolved part of an EU Member State becoming independent and having to determine its membership of the EU as a new state. And there is nothing in the various EU Treaties that cover the situation. The Treaty of Lisbon does now provide for Member States to leave the EU if they want to – but that’s not the same as part of a Member State becoming independent.

In general, under international law when a state breaks up any treaty obligations and membership of international organisations pass to the continuing state – if it is possible to discern one. So one possibility is that the rest of the UK (whatever it might call itself) would be seen as the continuing state with the newly independent Scotland seen as a brand new state.

There is a logic to this position when you look at th relative populations – and in terms of the EU it would mean that Scotland would not automatically become an EU member. It could of course apply to join. But all new EU members are expected to become part of the Euro, and that is a key issue.

There are two other possible interpretations of Scottish independence under international law.

If independence was to be viewed as the separation of one state into two, rather than as one part of a state leaving, then it could be argued that both retain treaty obligations including EU membership. This is the SNP position.

But if it is argued that the UK is dissolved and two new states created, then neither would retain the obligations of the current state. This was what happened when Czechoslovakia disappeared to be replaced by two new states, Slovakia and the Czech Republic.

In reality any EU decision would be a political one as much as a legal one. And with several Member States having regions within them that have independence movements it would be a very hot potato. Reports from Spain in particular suggest that they would oppose Scottish membership in order to discourage the Catalan nationalists from arguing that a precedent would be established.

This is an issue that the EU has not faced before. But perhaps the world’s newest country, South Sudan, can give us some indication as to what might happen. In 2011 a referendum in South Sudan saw 98.83% voting in favour of independence.

This created the new Republic of South Sudan. It did not inherit any treaty obligations and international memberships, which remained with the continuing state of Sudan. The republic of South Sudan was admitted to the UN after a vote and has since sought to join other world bodies.

While this is not exactly the same situation as a Yes vote in the Scottish referendum would create, there are similarities. And the outcome here must surely give a clue as to how an independent Scotland would be viewed.

So would a newly independent Scotland have to apply for EU membership?

Well, it would seem likely that the answer is yes, although that cannot be said to be a definite. The issue will continue to be debated over the next couple of years, and I’m sure that both sides will, in time, be able to cite learned legal opinions that back their views.

How crucial will this be in the ongoing referendum discussion? That remains to be seen. But what is clear is that Alex Salmond’s reputation has taken a massive hit over this issue.

 

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The SNP Conference took place in Perth just days after Alex Salmond had met David Cameron to sign the memorandum that will lead to an independence referendum. The Prime Minister’s agreement that Westminster will lend Holyrood the powers it needs to call a single question vote on 2014 was of course welcomed by the First Minister.

So it was an excited party that met in Perth. But, going by news reports and the blogs and tweets of those who attended, there was not a triumphant air. Rather this was the gathering of a party that realises exactly where it stands. The race may have started but they are a long way behind and have a mountain to climb if they are to win the prize. The mood was one of realism rather than triumphalism.

Much of the media attention was on the subject of defence. For many years the SNP has had a policy of withdrawing from the NATO nuclear alliance. But there have been fears that this could be a vote loser come the referendum and so a motion was submitted seeking to change party policy. It was submitted in the name of Westminster Defence spokesman Angus Robertson MP, but was known to have the support of the party leadership.

The party membership was clearly split on the issue, with many MSPs backing the old policy of opposing NATO. After a debate that was heated at times, the leadership won the vote by 394 votes to 365 – a difference of only 29. Pressure was clearly applied behind the scenes and it seems that many of those voting with the leadership did so more to avoid what could have been a damaging defeat that because they were swayed by the arguments.

So the SNP’s policy is now to remain a member of the NATO nuclear alliance but to outlaw nuclear weapons. A bit of a contradiction there surely? Well, that’s what can happen when you adopt policies that you think will be popular rather than sticking to what you believe in.

Alex Salmond confirmed yesterday that a theoretical independent Scotland would ask the UK government to remove its nuclear weapons from the country. But when asked by Isabel Fraser on the Sunday Politics Scotland programme whether an independent Scotland would prevent warships carrying nuclear weapons from doing exercises in Scottish waters Salmond was less committal. Here’s exactly what he said:

“The issue about visiting warships, etc., no country ever confirms the existence of nuclear weapons on its warships – that is well known. This is an issue all non-nuclear countries have to face up to within NATO and out of NATO and we will do exactly the same thing.”

So what does that mean exactly? Much like the issue of legal advice received by the Scottish Government on whether an independent Scotland would have to seek to join the EU, the First Minister’s answer seems to be, “I’m not telling you.” So much for a party that supposedly believes in freedom of information.

In many ways the NATO issue exposes the dichotomy at the heart of the SNP: it is both a single issue campaign and a political party. It primarily brings together those who believe in Scottish independence, but this inevitably makes political divisions on other key issues very likely. Witness the delegates who have said they will now leave the party because of this policy change. A trickle rather than a flood of course, but damaging nevertheless.

Most of the conference set piece speeches told us nothing new. There was much of the inevitable Tory-bashing, although to be fair it is difficult to do anything else at the moment, given the Mitchell resignation, Osborne’s train ticket and so on. And the referendum was clearly on everyone’s mind.

Alex Salmond talked of the once in a generation chance for independence in his speech. But this time he may have uncharacteristically understated the case – a heavy referendum defeat would move independence off the political agenda for much longer than a generation. Nicola Sturgeon, now dubbed the Yes Minister in her new constitutional role, followed Ed Balls’ calls for capital spending to get the UK out of recession. And other key speakers had similar themes, explaining just how independence would solve everything from poverty to poor health. They didn’t quite promise to stop the rain, but that might yet come.

So this was a conference that really revealed nothing new, with the change in policy to remaining in NATO the only real development of note. But Alex Salmond and co will be happy with that, as a defeat would have been seen as a loss of authority for the party leadership.

There are still two years to go until the independence referendum. And the SNP knows that it needs to work on those  who are still undecided on which way to vote. There appear to be many more hard core No voters than Yes voters right now, but there are still a large number of people who could, Salmond and co will hope, be convinced to go their way.

It’s going to be a long campaign.

 

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David Cameron, Prime Minister of the UK, and Alex Salmond, First Minister of Scotland, will be meeting on Monday. This is the culmination of months of negotiation on a Scottish referendum and it is expected that an agreement between the two will be signed.

And then we can get on with the discussion on Scotland’s future constitutional status rather than endlessly debating points of procedure.

Much of the detail of the final agreement is already in the public domain, and there aren’t too many surprises. Westminster will use what is technically known as a Section 30 notice to allow the Scottish Parliament to hold the referendum, which will take place in Autumn 2014. It has been reported that the power transfer will lapse at the end of 2014, so there can be no further delays. Surely two years is quite long enough, even for a decision of this magnitude?

There will be only one question on the ballot paper. And the franchise will be extended to include most of those aged 16 and 17, as well as those who will be on the electoral roll come referendum day.

Now back in January of this year Alex Salmond launched a consultation document “Your Scotland, Your Referendum”. We have been told that a lot of responses were received – but we have not been informed what they actually say. It seems very odd that a final agreement on the issues will be reached before some sort of announcement is made on what the Scottish people actually told the government.

Much attention has concentrated on whether the responses would back the inclusion of the so called Devo Max option – more, but unspecified, powers for the Scottish Parliament while remaining within the UK. Salmond has said that he would consider including another option, or indeed another question, if people wanted it. But it seems that it will be a single question now, whatever the responses actually said.

A single question has always a key issue for David Cameron and it seems like Salmond has conceded the point. While Scotland’s First Minister clearly wants independence it has always been thought that he would like to have the safety net of more powers for his government too.

I’ve always argued that a single question on the fundamental constitutional issue is the right way to go. Referenda are for matters of principle not of detail. And the key issue is whether Scotland remains a devolved part of the UK or becomes independent. If independence is defeated, and I expect that it will be, the gradual devolution process that started with the creation of the Scottish Parliament will then continue.

The wording of the question is an interesting one. Salmond’s initial proposal (“Do you agree that Scotland should be an independent country?”) was very much a leading question and the Electoral Commission was never going to allow it. The final wording will, quite correctly, be much more neutral. The SNP did talk about establishing a Scottish Electoral Commission to oversee the whole process, but backed away. Leaving the job to the established experts seems like a good call.

The big issue in the media is the apparent agreement of Cameron to Salmond’s proposed extension of the franchise for the referendum to include 16 and 17 year olds. It was postulated that this would give an advantage to the nationalists, as young people are assumed to be more responsive to the idea of change. But recent opinion polls, if they are to be believed, do not show this to be the case.

There is a strong argument for the extension of the franchise to include younger people. 16 year olds can pay tax, so why can they not vote on how public funds are spent? And many school pupils are better informed through civics classes at school than a lot of older people might be.

But I don’t believe that a referendum is the place to make such a change. And a deal between two leaders certainly isn’t the way to go about it. I would much rather see a proper public debate and a decision that covers all elections reached. Whether the qualifying age remains at 18 or reduces to 16 or 17 there should be a process to making that decision and not a behind the scenes political deal.

And there are technical problems that mean the issue might not be properly settled before the referendum in any case.

The Electoral Commission has warned that the current system excludes nearly all of those aged 16. They can only apply to be added to the electoral roll in advance if their 18th birthday falls in the year after 1 December. Because registration ends each October, only those who are older than 16 years and 10 months can therefore do so. According to The Guardian only about a third (44,000) of Scotland’s 123,000 16 and 17 year olds are included on the roll at present.

There is, of course, time to get that corrected. And a wholescale change in electoral registration across the UK is scheduled to come into force in the summer of 2014. It will then become a legal requirement for every individual to register, replacing the current system where one form is filled in for each household. Is it possible to bring in a new system and also change the rules for one vote? Probably it is – but it would have to be done very carefully to ensure that no one is excluded.

There might still be an issue over campaign spending – the amount that each side is allowed to spend in the last few crucial weeks of the referendum campaign. The Scottish Parliament will set the rules – but governments always do so on the basis of advice from the experts, the Electoral Commission. . But the SNP wants the Scottish Government to set whatever rules it wants – which would be as clear a conflict of interests as you can have.

So we are almost there. The process is almost agreed. And the campaigns have already started. It’s just a pity that the actual vote won’t take place a lot sooner than 2014.

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It has been widely reported that George Osborne has secured the Liberal Democrats’ agreement for a fresh round of £10bn cuts to welfare by promising that the cuts will be balanced at some stage by a bigger contribution from the rich.

And they believed him?

On top of the many cuts already made or in the pipeline, the use of ATOS to remove people from sickness benefits by ruling even the most severely disabled as fit for work and the further cuts expected under Ian Duncan Smith’s Universal Credit scheme, yet more savings are to be planned.

No housing benefit for school leavers? No inflationary increase on payments? Reductions in benefit for those who have babies while unemployed? Housing Benefit cuts for those with a spare bedroom? Stopping the benefits of those with terminal illness as they don’t really need money anyway?

OK, the last of these comes from spoof website The Onion. But the others have all been openly discussed within Tory circles.

We are also told that David Cameron has ruled out the Lib Dems’ pet plan for raising funds, the mansion tax. But apparently Nick Clegg and co are signed up to a promise that something else will instead be done to make the rich pay more. Sometime. Honest.

This comes of course from a Chancellor who gave anyone earning £1M annually a £40,000 tax cut each and every year in his last budget. His farcical package of measures may have led to later u-turns on caravans and pasties, among other things, but the yearly bonus for the rich remains.

Osborne likes to claim that the rich pay a greater share of our nation’s tax revenues than in any one of the 13 years that Labour were in office. But what does that claim actually mean?

To explain it we have to remember that unemployment is at a higher level now than it has been for many years. So that reduces the tax take, doesn’t it? Now it is highly likely that there are a lot more workers who were on average or low wages in the dole queue than millionaires. And therefore the rich pay proportionately more – which is not the same thing as saying that they are actually contributing extra money to the Treasury. There have also been pay freezes in the public sector – and these don’t affect millionaires either.

The coalition government’s economic policies have failed. Cutting to reduce the deficit has simply led to higher unemployment and the economic stagnation of a double dip recession – meaning that the government is actually borrowing more and not less. Plan A has failed, exactly as many predicted it would do. And we all know that there is no Plan B. In fact Osborne isn’t even looking for one. Like Canute he simply hopes that the economic tides will turn his way.

But who ultimately pays the price? The poor of course. Further cuts in benefits as well as reductions to the services that many rely on are the result. We are all in this together? Clearly not, as the poor are being made to pay now whereas the rich will possibly pay more in some as yet unknown way at some unspecified future time. Maybe.

Once more it is clear that the Liberal Democrats are happy to go along with whatever the Tories propose. The lure of the Ministerial cars and the places at the Cabinet table are clearly too much to resist.

Every opinion poll shows that support for Nick Clegg’s party has plummeted following their repeated u-turns and unquestioning backing for Tory policies. Yet once more they will back Osborne in more cuts. There will be some posturing of course. And they will promise to have gained concessions, to have taken the edge of Tory plans. But it will be all spin and no substance.

The Liberal Democratic party will be wiped out come the next election. And they will deserve every measure of retribution that the electorate takes.

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The company previously called The Rangers Football Club PLC (in administration) is now known, rather confusingly, as RFC PLC 2012. It will finally be placed in liquidation this month.

Over seven months ago Duff and Phelps were appointed to run The Rangers Football Club PLC. Now they have produced a final report to creditors – after running up over £3 million in fees and presiding over a trading loss of £4 million. Good job guys!

Later this month they will go to court to seek “a winding up petition and the immediate appointment of Malcolm Cohen and James Bernard Stephen of BDO LLP as Joint Liquidators.”

Yes, we are about to reach the final stage of the saga that has seen oldco, newco, incubators, phoenixing, Whyte, Blue Knights and Green become common in Scottish football chat.

As ever in this confusing world of corporate finance meets football, we need to be clear about our definitions. Because there are still two different companies claiming the name Rangers. But fear not – the Duff and Phelps report handily includes a Definitions section to help us out.

The first company listed is the old one that will be liquidated:

Rangers / the Company / the Club – RFC 2012 P.L.C. (Formerly The Rangers Football Club plc) (In Administration), Ibrox Stadium, Glasgow, G51 2XD (Company number SC004276)

And the second company is the new one that now runs the team currently sitting second in the fourth tier of Scottish football – otherwise known as Zombie Rangers:

the Purchaser and Newco – The Rangers Football Club Limited (Formerly Sevco Scotland Limited) of Ibrox Stadium, Glasgow G51 2XD (Company number SC425159)

So there you have it. The oldco, the company, the club, will be liquidated. The newco which purchased its assets will continue. A clear split between the two companies – and as I have always argued the football club is not a legal entity in itself but rather a part of the soon to be liquidated oldco.

Or, to put it another way, Rangers FC as formed in 1873 will be liquidated. The brand new team run by Charles Green and co will continue.

Taking out the inevitable legal niceties that others are in a far better place to comment on than I am, the rest of the report doesn’t actually tell us much that we didn’t already know. It simply confirms that the company is, to put it in common terms, bust.

The Big Tax Case though has still to report. Latest (informed?) speculation seems to be that the result will finally come this month – and will go against the club. This failure of the appeal against the tax bill resulting from the use of EBTs will add considerably to the final debts of the company/ club, to the tune of £94 million or so.

But the exact amount that the company/ club will owe at the time of its final death is of academic interest only, as it has been clear for a very long time that little, if any, money will actually be paid to anyone unlucky enough to be owed money.

So that’s over £100,000,000 of debts run up over many years that will never be paid. That is the real legacy of Rangers Football Club.

So Charles Green can call his Zombie club whatever he wants. It is clear that Rangers FC, the company and the club, will be coming to an end once and for all.

And not before time too.

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