Why did the banks become Scottish only after they failed?

Here's one for you. What do Andy Murray, HBOS and RBS have in common? Answer: it can appear to a cynic that whether they're Scottish or British depends on how well they're doing at the time. With Andy, listening to the BBC from time to time can be a bit irritiating but it's more amusing than anything else. But the banks? That's a more serious issue altogether.

The banks were wholly regulated from London. 90% of RBS and HBoS UK employees were based outwith Scotland. 90% of employers' income tax was paid to Westminster, and not counted as Scottish or Scottish Government revenue. 90% of the banks' national insurance contributions were paid to Westminster and not counted as Scottish. 80% of the losses of RBS were generated from the bank's London based operations. RBS paid £16 billion in corporate taxes to the UK government from 1998 to 2007. None of this was counted as Scottish Government revenue.

So if all the Government revenues associated with the banking operations in the boom years were added to the UK balance sheet, why should all the losses in the bust years suddenly become only Scotland's problem?

Bailouts are not matters of altruism but reflect the harm that will be done to a country (loss of employment and so on) if an enterprise fails. The location of headquarters has nothing to do with it. The name of a company or its historic origins have even less to do with it. Barclays was bailed out to the tune of £552.32bn (at backdated exchange rates) by the US Federal Reserve and £6bn by the Qatari Government. Or to put it another way, foreign governments bailed out Barclays to the tune of more than twelve times more money than the UK Government’s capital support for RBS (£45bn).

As an independent country, our contribution to bailing out the banks would have been roughly the same amount as we paid as part of the UK – about 10%.
 
For more, see the Business for Scotland analysis here and here.

What do the mibbees think?

There was lots of really interesting stuff about general attitudes in the Wings over Scotland poll. One part was about the views of people who said they were certain to vote (8 or more on a scale of 10) in the referendum but had not yet made their minds up which way: in other words, the so far undecided. What effect had the independence campaign had on them, so far? Had it made them more likely to vote yes, or no, or made no difference?

REACTION TO THE CAMPAIGN SO FAR
(Full sample)

Much more Yes: 4
Slightly more Yes: 32
No change: 54
Slightly more No: 8
Much more No: 2

There was fascinating analysis of what the don't-yet-knows think about various things that would explain why they're tending, by nearly 4:1, to Yes. The (as ever) readable analysis is spread over a few posts here , here , here , here , here , here , here and here. The raw data can be downloaded here .

Long-term thinking

Everyone agrees that an oil fund would be a good idea, in principle. But an oil fund is something to build over many decades, to leave something for our children and theirs. The occasional fluctuation in price, month to month, is irrelevant. If only we could somehow form some idea of what oil prices are likely to do, long term. How on earth can we know what is going to happen, over decades, to the price of a vital, finite resource for which the modern world thirsts?

Update: as at 10 October 2013,  Brent Crude was trading at just over $111 a barrel. Check the current price here.

Peer pressure

Someone recently swore blind to me that "Lord" Foulkes' elevation to the peerage was the result of deliberate appointment rather than, as I'd assumed, the reluctant acceptance of some sort of "Who Do You Think You Are?" revelation of an unexpected aristocrat in his ancestral cupboard. I find that really, really hard to believe.

Against whom?

This is a video of the debate at Abertay University a couple of weeks ago where there was a huge swing to Yes amongst the audience after the debate. Frankly, you can see why. There's a brilliant exchange at 54m00s onwards. One student says she's worried: "What if Scotland was to get invaded by, I don't know, Iraq or Afghanistan?". She says we'd be too wee to fight the invader off. Everyone, as seems to be de rigeur these days, listens respectfully to the baloney. However, the unrestrained relief and joy of the audience is palpable when the next questioner (who sounds American but is a first year student and who can't have planned his contribution) can't help himself and says:

"A few points. I want, not to be personal or anything, but maybe just to say something about the defence issue that just came up. [Pause]. In what world would any country decide to attack Scotland? [Laughter] [Applause]. The only country that would attack Scotland [Pause]. Is England. [Laughter] Any country that attacked Scotland, other than England, would be attacked. [Pause] By England. [Pause] And America. And France. And Germany. And Norway. And, I'm pretty sure, quite a few other countries. So, the issue of defence is non-existent."

It's impossible to put it more clearly. Out of the mouth of babes and sucklings. Do watch Stuart Hosie though as he's very good too.