Category Archives: Economics

The wages of Scottish independence – infrastructure

Geographically Scotland is very isolated. It is a stranded at the top of mainland Britain with a single land border with England.  Any goods or people coming and going to Scotland have a choice of independent access by air and  sea  or dependent  entry and exit via rail and road through England.

Why does this matter?  Two reasons: Scotland cannot assume free passage for goods and  people through England in perpetuity. They might not have it immediately after independence if  Scotland  is  unable to gain EU membership,   either because the  reduced UK (henceforth the UK) opposed it or the other EU members did.  Alternatively the UK (or England on its own) might leave the EU.  It would also be in the UK Government’s hands
to impose its own restrictions on the free movement of Scottish imports and exports.

In any of these eventualities Scotland would be severely hampered in its importing and exporting.  EU law would prevent the free export of Scottish goods to and through the rest of the UK  if Scotland was not part of the EU and to the EU through the UK if the  UK  did not remain in the EU.  If the UK did not remain in the EU, exports to Scotland  from the UK would also be subject to EU protectionism and even goods from the EU could become subject to tariffs and quotas if they passed through the UK.  As for the UK Government taking steps off their own bat to impose restrictions, that could be a real possibility if the UK left the EU,  either in retaliation for EU imposed restrictions on UK trade with the
EU or EU restrictions on the movement of goods to and from the non-EU nations of Europe  to the UK . There might also be disputes between the UK and Scotland which could result in restrictions, for example, Scotland failing to pay the interest on their share of the UK National debt at the time of independence or Scotland operating too lax  an
immigration policy resulting in immigrants coming into Scotland with the intention of moving across the border to England.

The precarious geographical situation of Scotland shows the importance of it remaining on good terms with the UK  in the event of independence.  But it also means that  the UK  would have no incentive in improving railways and roads right up to the Scottish/English border.  In the UK  it may make sense for political  reasons to build a high speed rail line from London to Glasgow and Edinburgh as is presently under discussion (http://news.scotsman.com/edinburgh/Scotland-must-be-on-new.6606935.jp),
although the proposed HS2 route is being fiercely resisted by those parts of England through which it will wend on its way to Scotland (http://www.rail.co/2011/01/31/why-britain-needs-hs2/).  But if Scotland were independent , at best it would make no  political sense for the UK to extend such as line further than Carlisle, a city ten miles short
of the Scottish border and  70 odd miles from Glasgow.  More likely than extending  the high-speed line to Carlisle  would be a decision to extend it no further than Manchester, a city 170 miles from Glasgow. The same reasoning would be likely to apply to all rail and road access between England and Scotland,  because there would be little benefit  to the UK in improving  the links right up to or anywhere near the Scottish border.

But even if the UK was willing to improve railways  and roads up to the Scottish border, it is doubtful whether an independent Scotland could afford to extend the links to Glasgow and Edinburgh. HS2 if it ever gets built will cost tens of billions of pounds  (http://stophs2.org/news/2368-hs2-bill-1000-family).  A substantial part of the line, around a fifth of its length, would be in Scotland if it runs  to Glasgow and/or Edinburgh.  Bearing  mind that Scotland’s GDP at present is  less than £140 billion (in 2009 it was
officially estimated at £131 billion – http://www.scotland.gov.uk/Publications/2011/06/21144516/5), it is difficult to see how Scotland would fund the construction, maintenance and running of the HSE on their side of the border.

Poor communications,  external and internal,  would  not hinder only Scottish exports and imports of goods . It would  also adversely affect large sections of the private enterprise part of the Scottish economy  such as tourism and dissuade talented  individuals from coming to work in Scotland or businessmen to invest there. Poor infrastructure generally would be a disincentive to individuals and businesses.  Existing well qualified individuals and companies located in Scotland might well decide to move elsewhere.

But infrastructure is about much more than main roads and rail links to major cities. An independent Scotland would have to fully fund all new capital projects in  Scotland including the rail and road network over the sparsely populated highlands and islands, and maintain the existing networks.  This would not be easy to do even under the present devolution arrangements because  Network Rail (which has responsibility for the
railway in Scotland)   is projecting  considerable cuts in funding (http://www.guardian.co.uk/business/2010/may/31/rail-industry-prepares-for-public-funding-cuts)

Amongst other things, an independent Scotland would also have to build new schools, universities, prisons, law courts   and hospitals and maintain the old ones;  prevent coastal erosion (a considerable task with such an extensive coastline for such a small population);  fund most the local council’s infrastructure spending and maintain state-owned Scottish Water  infrastructure . Of course much of this is already done via the UK Treasury block grant Scotland receives each year, but  thereby hangs a tale: in the first ten years of devolution public spending in Scotland increased dramatically. Now it is due to fall, viz:  “In the last decade, Scottish Government departmental expenditure has grown by over 5% a year on average in real terms. It is projected that between 2011/12 and  2014/15 it could fall by an average of 2.9% in real terms per annum and be £3.5 to £4bn lower.” (http://www.scdi.org.uk/downloads/SCDIBlueprintforScotland.pdf).  That  is the official estimate in the event of Scotland remaining within the UK  with  all the benefits that provides, such as assurance for business investors that Scotland is effectively  underwritten by England  and   a massive annual subsidy from England. (Shortly before Labour left office in 2010, the monetary benefits to Scotland since devolution in 2000 were calculated by  the Scottish Secretary Jim Murphy’s office at £76 billion, that is the difference between tax raised in Scotland and public expenditure in Scotland since 2002 – http://www.scotsman.com/news/Scotland39s-76-billion-39devolution-dividend39.6009619.jp).

In short, infrastructure spending in the ten years since devolution has taken place in the most benign economic and fiscal circumstances. Those circumstances would not exist come independence. Indeed, they would probably be far  worse by the time independence was reached because  according to the Murphy report the tax deficit is already at  dangerous levels : ‘… an examination of “real money” government expenditure that excludes capital spending, Scotland Office economists found total expenditure in Scotland currently amounts to 145 per cent of all Scottish tax receipts.”

An independent Scotland would find itself immediately saddled with a massive national debt as the result of taking on a proportionate share of the financial obligations of the UK at the time of independence (this would be in excess of £200 billion – https://englandcalling.wordpress.com/2011/06/02/the-wages-of-scottish-independence-public-debt/), further debt in the shape of PFI contracts for work undertaken in Scotland
and local authority debt. On the other side of the fiscal ledger, the tax base in an independent Scotland would shrink because of the unhealthy  proportion of its GDP which is  dependent  on public spending (https://englandcalling.wordpress.com/2011/05/19/the-wages-of-scottish-independence-public-sector-employment/) and the receipts from oil in Scottish waters would not compensate for the £8 billion pa Scotland receives in extra funding from the UK Treasury because the per capita funding is around £1,500 per head higher in Scotland than it is in England.  The oil is also a rapidly declining asset. (https://englandcalling.wordpress.com/2011/05/14/the-truth-about-uk-oil-and-gas/).
It is also a fact that Scotland has a dangerously narrow private sector being far too dependent on oil, Scotch whisky, material and tourism.  This means it could easily be blown off course by a sudden change of fortune in one of the main revenue earners .

With additional costs and tax revenue falling, it is improbable in the extreme that Scotland’s infrastructure could be maintained at its present level let alone substantially improved.  Nor  is there any reason to believe that  an independent Scotland would be wise in its use of money for infrastructure investment.  The Scottish parliament was estimated to cost £40 million and cost  £414 million (http://www.parliament.uk/documents/commons/lib/research/briefings/snpc-03357.pdf) and a tram scheme in Edinburgh which bids fair to waste £750 million with
precious little to show for it (http://scotlandonsunday.scotsman.com/comment/Edinburgh39s-disgrace-II-Tram-fiasco.6783582.jp).  Those are serious amounts of money for an economy the size of Scotland. A massive like England could shake them off, but a few fiascos of this magnitude could seriously damage Scotland.

The likely outcome for infrastructure in an independent Scotland is more ridiculously expensive projects, less of it and worse maintained.

The wages of Scottish independence – the currency problem

The most problematic  decision for an independent Scotland is the currency.  There are three choices: to keep using the pound, join the Euro or create their own currency.   If they choose the pound or Euro they will not be truly independent because they will have to relinquish control over   a large slice of Scotland’s fiscal policy.  True independence
would require the creation of a new currency.

If Scotland chooses to stay with the pound, as things stand  they would l be subject to the
decisions  about interest rates made by the Bank of England  (BoE). It is improbable that the Westminster  Government  would change the present regime to suit an independent Scotland, and any change, for example, returning control  of monetary policy to the Government from the BoE’s Monetary Policy Committee (MPC) or the alteration of the MPC’s remit,  would be made to suit the UK Government not Scotland.

The MPC’s  present remit is to keep inflation under control around a 2% target:

“ The Bank’s monetary policy objective is to deliver price stability – low inflation – and, subject to that, to support the Government’s economic objectives including those for growth and employment. Price stability is defined by the Government’s inflation target of 2%. The remit recognises the role of price stability in achieving economic stability more generally, and in providing the right conditions for sustainable growth in output and employment. The Government’s inflation target is announced each year by the Chancellor of the Exchequer in the annual Budget statement.”

(http://www.bankofengland.co.uk/monetarypolicy/framework.htm)

The  MPC  has ignored that remit since the recession began in earnest in  2008, leaving
inflation to look after itself by first reducing Bank Rate  to an all-time low of half a per cent and then keeping it there.   Ostensibly this has been done because of fears of a severe shrinkage in the UK  money supply. In addition, to boost the money supply the BoE has engaged in what is politely known as Quantitative Easing (QE)  and impolitely known as printing (virtual) money.   A cynic might say that the reason the MPC and the BoE have behaved in this fashion is to covertly do the Government’s bidding, namely,  (1) preventing
a  wholesale collapse of house prices through massive defaults caused by keeping  Bank
Rate at a sensible, much higher, level and (2) reducing  public and private debt by inflating it away.  Whatever the truth, the management of the economy since 2008 illustrates an important truth: whoever controls the currency to a very great extent controls the politics of a country.

If  an independent  Scotland opted to keep the pound, when shove comes to push they would have to accept whatever Westminster decided, not only  from the direct
management of the economy through MPC  decisions and strategies such as QE, but also
the effects of the general fiscal regime decided by Westminster which would affect the value of the currency.   This would include the tax regime in the UK and Westminster’s  attitude towards debt, especially private debt. It is not inconceivable that credit controls such as those which existed before Thatcher removed them in the 1980s could be re-imposed,  for example restrictions on bank loans and mortgages.

There are also dangers  for the rest of the UK if an independent Scotland is  tied to the pound. One of two arrangements would exist:  either no Scots  say in how the Westminster Government acts  (probable)  or  some arrangement by which  Scotland would have
a formal say in the setting  of interest rates (improbable). Whichever it was you can bet the  Scots Numpty Party (SNP) would complain  that interest rates are set to benefit England.
That would create a danger  that  politicians in Westminster would give some
ground to them even if there was no reason to do so.  If you doubt this reflect on the fact that David Cameron has  not laid down any conditions for Scottish independence merely said that he would campaign against it. (http://englandcalling.wordpress.com/2011/05/06/scottish-independence-yes-but-only-on-these-terms/).  If the Scots do  vote for independence , it is not probable  that negotiations  between the SNP and Westminster would  result in the Coalition Government giving a great deal away to the SNP in the vain hope they can cobble together a deal which  allows them to pretend the UK as presently territorially  constituted still exists in some form. This is an issue which needs to be aired in public as often as posssible.

More fundamentally,  the division of a currency between two supposedly sovereign states would create uncertainty in the  money markets  because it would not be clear who was pulling the strings or  what would happen if  Scotland got into the sort of economic trouble
Greece is currently experiencing.  The danger for the UK would be that Scotland would get into such a financial mess that the rest of the UK (in reality England as both Wales and Northern Ireland are economic basket-cases)  would come under immense pressure to bail Scotland out, exactly the predicament the richer  EU countries have found themselves in over the Euro turmoil. Even if  Scotland did not suffer a Greek-style economic collapse;
if it turned out to be church-mouse poor http://englandcalling.wordpress.com/2011/05/06/scottish-independence-yes-but-only-on-these-terms/)  rather than the  oil-tax El Dorado  which fills the dreams of SNP members,  that would have a serious  effect on the behaviour of the currency,  because the money markets would  look at the combined economic performance of the UK and Scotland.  That would mean UK Government borrowing would cost more.  It would also probably mean higher Bank Rate than would otherwise be the case or higher inflation in the BoE kept rates low despite what the economic indicators were saying.

The Euro poses the same problems as the retention of the pound writ large.  Whether  the Euro will survive in its present form or even at all is uncertain. But even if it does manage to overcome the present difficulties which besiege the currency, it is dubious whether the richer Euro members, especially Germany, would welcome into the Euro fold another small country with a dangerously high dependence on public spending, much of which
would vanish at independence.  However,  if  Scotland did gain membership of the
Euro,  its government would have absolutely no effect on  how the currency was managed  and would be much more likely, because of the number and diversity of the Euro members,   to find itself trapped by interest rates and the value of a currency which was not suited to Scotland’s  needs than they would have been  if they kept the pound ,
a stable, important currency which has been shared between  Scotland and the rest of the UK for 300 years.  The present mess that Ireland, Portugal and Greece find themselves in should be warning enough of these dangers.

The other problem with being in the Euro is the likelihood of ever more invasive powers over  economic decisions such as oversight of banks being  given to the  Eurozone members .  Even as things stand, in theory at least there are severe restrictions on the amount of public debt a Eurozone member may run up.  The current Euro crisis is bringing ever louder calls for much more stringent controls over what Euro members can
do and meaningful enforcement of Euro regulations.  Scotland would have far less fiscal freedom if they joined the Euro than if they retained the pound.

That leaves the creation of an entirely new currency.  This would give Scotland fiscal freedom, but would come with its own  vast problems.  Getting international credibility for a currency is difficult for a large country with vast  natural resources (think of Russia after the dismemberment of the Soviet Union); it is much more difficult for a small country (Scotland has a population of around 5 million) even one with still substantial oil reserves.

An Independent Scotland  would not seem an attractive economic proposition to foreigners.  Around 60% of current Scottish  GDP is derived from  public expenditure and this is projected to rise to nearly 70% by 2012 (http://www.telegraph.co.uk/news/uknews/scotland/4217793/Scotlands-dependence-on-state-increasing.html).  Much of the public expenditure is dependent on a subsidy from England (the difference in per capita Treasury funding alone means  Scotland takes  around £8,000 billion from England  each year – (http://englandcalling.wordpress.com/2011/05/06/scottish-independence-yes-but-only-on-these-terms/) and the likely tax revenues from oil and gas  in Scottish waters  (some of the oil and most of the gas is in English waters)  are likely over a the medium term to be considerably less than the subsidy  received from England.  (http://englandcalling.wordpress.com/2011/05/14/the-truth-about-uk-oil-and-gas/).
Moreover,  the amount of oil extracted  in the future will depend on the price and likely tax regime and the amount of oil will decline steadily even if the price remains high.

Foreigners would also be concerned at the very  narrow economic base of Scotland’s economy.  Of the forty odd percent of  the economy which is not publicly funded, a substantial  part  derives from  the oil and whisky industries (http://www.corporatewatch.org.uk/?lid=1827).   Moreover, much of  Scotland’s private enterprise, especially the oil firms and  rather humiliatingly the whiskey producers, is foreign owned so that the profits  emigrate .

There is also a lack of  entrepreneurism in Scotland so the private sector is unlikely to swell:

“Scotland has the lowest ratio of businesses per head of population in the UK, according to figures published by the Department for Business Innovation and Skills (BIS). At the  outset of 2010, Scotland had 672 private sector enterprises per 10,000 adults, while England had 922, Northern Ireland 860 and Wales 783.” (http://thescotsman.scotsman.com/6983/Scotland39s-private-sector-lags-UK.6773823.jp)

An independent Scotland would also start with a massive national debt.  Here is Bill Jamieson of the Scotsman dealing with the UK national debt:

“What of deficit and debt apportionment? Both in the immediate term and in the final settlement, the SNP has called for more borrowing powers. But how much more borrowing will be sought on top of Scotland’s share of UK debt? To give a proximate idea of what we face, let’s assume Scotland’s debt share is similar to that of her share of UK GDP – circa
10 per cent. By 2015-16, when a referendum vote may be held, UK net debt is projected at £1,359 billion (69 per cent of GDP) and the annual interest charge would have risen to £67bn. Scotland’s share would be £136bn, and £6.8bn respectively.” (http://thescotsman.scotsman.com/holyroodelections/Bill-Jamieson-The-burning-independence.6766635.jp?articlepage=2)

That would not be the full debt  Scotland would have to take on. There would also be a proportionate  Scottish share of the funding of UK public sector pensions up to the advent of  independence;  either a proportionate share of the UK’s PPP and PFI  obligations at the time of independence or full responsibility for all PPP and PFI contracts in Scotland plus any other debt accrued for  Scottish projects,  both at local and national level,  and other UK  debt  up to the time of independence.  It is dubious whether foreign investors or the money markets would see an independent Scottish currency as a safe bet with those massive starting obligations.

More generally,  companies operating in Scotland now have the assurance that they are operating within a country  which is controlled by   a much larger and richer national entity namely England.  That is particularly important for the oil industry who need safe  seas to operate in. They would have no such assurance if Scotland was independent.

Finally, there is the thorny question of the Scottish banking system.   It is not merely that the British taxpayer (in reality the English tax payer because the Celtic Fringe take vastly  more out of the UK tax pot than they put in) has put  directly “The Government has pumped around £45 billion into RBS and £20 billion into Lloyds – holding stakes of 84% and 41% respectively – although the taxpayer is currently sitting on almost £20 billion in paper losses on the holdings.” (http://money.uk.msn.com/news/articles.aspx?cp-documentid=152384309).  Those are horrific figures for an economy the size of Scotland (£140  billion approx – see below) . However, that is only the tip of the taxpayer cost iceberg.   Part at least of the ongoing costs of  the recession and the burgeoning UK national debt  is down to the reckless behaviour of  financial institutions and the two Scottish banks RBS and HBOS were by far the greatest contributors to the  need  for taxpayer support and the ravaging of value by  feeding inflation through QE.

The size of the damage done can be seen from the Jamieson quote above: if the UK national debt reaches £1.4 trillion by 2015 that will mean the national debt will have nearly trebled (excluding inflation) since 2008 when it was around £500 billion (http://www.ukpublicspending.co.uk/uk_national_debt_chart_10_G.html).  Even worse, the official national debt figure does not include the costs of bailing out the banks or  the full cost of PPP and PFI expenditure, debt which  was kept off the official national
debt by Gordon Brown’s off-the-books Enron style accounting.  The official national debt figure with all identifiable  costs included (the unadjusted measure of public sector net debt ) was £2252.9 billion  or 148.9 per cent as at May 2011. (http://www.economicshelp.org/blog/uk-economy/uk-national-debt/).

Exactly how Scotland would be able to sustain an independent currency  against the background of  the loss of English subsidy, the narrowness of the Scottish economy, the over-dependence on the  public sector, the huge national debt  Scotland would start with and the  awful mess of their banking system is to put it mildly difficult to see.  That economic  background also  makes the idea of Scotland using either the pound or Euro  very unattractive, because not only would it drag down the credibility of the currency (especially in the pound’s case),  but the likelihood of a either England or the Eurozone having to bail-out Scotland with vast amounts of money looms very large.

All those obligations and difficulties  have to be set against the small size of the
Scottish economy. No official GDP measure is produced but the ONS 2009  figure for Scottish Gross  Value Added  (GAV),  which is GDP  without  taxes (less subsides) on products,  was  £102,552 billion  (http://www.statistics.gov.uk/pdfdir/gva1210.pdf).
The GDP today is in the region of £130-140 billion.

Whatever currency choice Scotland made one thing is certain:  borrowing  by Scotland’s government, both central and local,  and any other  public body in Scotland would become much more expensive.   The UK can borrow at a  rate which is moderate: an independent Scotland would, because of its precarious economic situation, have to borrow at considerably  more than the UK rate, if things go really wrong  at the extortionate  rates the Greek Government is having to pay despite being part of the Euro.

The wages of Scottish independence – the loss of the military

One of the most complex aspects  of disentangling Scotland from the rest of the UK should  Scotland become independent is defence.   It is complex because of  (1) the siting of the Trident submarines and other major ships at Faslane; (2) the  awarding of MOD research contracts to Scotland  and (3) the fact that the armed forces which  now exist in Scotland would not be suited to Scotland’s defence needs, they being designed to fit into a UK defence strategy not a Scottish one.

Back in 2002 the Scotch Numpty Party (SNP)  had these rather grandiose plans:

“Colin Campbell, the party’s defence spokesman, gave details of a Scottish Defence Service (SDS) which would operate in a nuclear-free Scotland following the removal of Trident.

“Mr Campbell said current estimates showed that a defence programme would cost £600 million a year with an extra £300 million for works.

“The total defence budget of £1.8 billion would be about the same figure as the Ministry of Defence currently spends in Scotland.

“He told the delegates: “We are looking at a maximum establishment of 20,000 regular personnel in Scotland … that is 5,000 extra people being paid in Scotland and spending their money in Scotland. That’s worth about £150 million a year.”

“He reckoned there would be 7,000 more indirect jobs as a result of the SNP’s defence policy.

Apart from 20,000 full-time regular troops, Scotland would also have 20,000 regular reservists and 8,000 part-time  reservists.  (http://news.scotsman.com/snpconference2002/SNP-proposes-nuclearfree-Scottish-Defence.2364594.jp)

A more realistic  idea of the armed forces and independent  Scotland could afford  can be gained from those of the Republic of Ireland RoI) which has an estimated  population of  around 4.5 million http://www.cso.ie/releasespublications/documents/population/current/popmig.pdf)  to Scotland’s estimated five million.

The RoI  has an army of approximately 8,500, a navy of 1,100 and an airforce of 1,000. (http://www.military.ie/home).  Total defence expenditure for 2011/12 is EUR725 million (£632 million – (http://articles.janes.com/articles/Janes-Sentinel-Security-Assessment-Western-Europe/Armed-forces-Ireland.html).  To put that in context the UK’s defence
expenditure for the same year is £ £33.8bn, or around 53 times that of the RoI. (http://www.mod.uk/DefenceInternet/DefenceNews/DefencePolicyAndBusiness/DefenceBudgetCutByEightPerCent.htm).
The RoI  armed forces could offer little meaningful opposition to an invasion by any serious invader. Their armed forces can  perform a domestic  quasi-police function at best .

An independent Scotland would have  substantial  revenues from oil which the RoI
does not have, although these are very susceptible to violent  fluctuations in the oil price,  something  which  would make planning for the future especially difficult as the oil tax receipts  would form a substantial part of the anticipated revenue an independent Scotland would need.  The oil is also a diminishing resource. (http://englandcalling.wordpress.com/2011/05/14/the-truth-about-uk-oil-and-gas/).
In addition an  independent Scotland would lose the subsidy they receive from England each year (around £8 billion at present –  http://englandcalling.wordpress.com/2010/11/12/celtic-hands-deep-in-english-taxpayers%e2%80%99-pockets/)
and begin their independent life with a large national debt as their share of
the UK national debt. That share would be at least £100 billion  with the UK National Debt as it is now  at around  £1.1 trillion (http://www.statistics.gov.uk/cci/nugget.asp?id=277)
, but by  the time a referendum is held on the proposed SNP timetable in 2015 it will probably have grown to £1.5 trillion. This would make Scotland’s proportionate share (based on her proportion of the UK  population)  around £140 billion. In addition there would be large sums of   additional  debt for Scotland arising from the rescue of the Scottish banks RBS and HBOS, PFI projects and the funding of public service pensions.  Scotland would also have to fund a great deal of initial extra expenditure resulting from the setting up their separate public administration.

Taking these financial constraints into account, it is most unlikely that an independent Scotland would be able to support armed forces  substantially  greater than those of the RoI.  If that were  the case,  Scotland would lose out in terms of  the numbers of  servicemen in Scotland,  the number of MOD civilian workers and  the lucrative contracts  (with the jobs attached) for defence which they now receive from the UK Treasury. The MOD website gives a snapshot of  the material benefits which belonging to the UK currently brings  to Scotland via the defence budget:

“Scotland makes a very important contribution to UK Defence. Scottish military links and heritage remain strong and all three Armed Forces continue to have a significant presence at 381 sites across the country.

“There are 5,000 Armed Forces Volunteer Reservists and 10,000 Cadets throughout Scotland, plus ten University Squadrons and Corps. The Army alone has 58 Territorial Army centres, 17 Combined Cadet Force units, four University Officer Training Corps, and 228 Cadet detachments, which are supported by 1,000 adult volunteers.

“The MOD and the Armed Forces employ 20,000 people throughout the country. Each year the MOD spends an average of £600 million in Scotland, and awards over 500 direct contracts, sustaining additional jobs in Defence manufacturing. Scottish industry produces cutting-edge, hi-tech ships and equipment to enable our forces to carry out their operations.

“About 130 Royal Navy and NATO ships visit ports in Scotland every year, bringing money to the local economy.”

“An estimated 11,000 Scottish jobs are directly dependent on Defence contracts, with thousands more jobs supported in Scotland through the presence of the MOD and its spend in local areas. Defence industry varies greatly, from specialists in chemical protective clothing to shipyards that have produced Type 45 destroyers. The new royal Navy Aircraft Carriers will be built at Clyde shipyards in Glasgow and assembled as Rosyth Dockyard in Fife.”

(http://www.mod.uk/DefenceInternet/FactSheets/DefenceInScotland.htm)

Much of that would go because of the financial constraints described above.    In the case of research and manufacturing , all of it would be removed as soon as alternative arrangements could be made and existing contracts expired.  Without the patronage of the UK Treasury there would be  greatly reduced  opportunities for Scottish defence manufacturers and Scotland would, like most  countries of her size,  buy the bulk of her military equipment from foreign suppliers.

The heaviest  loss would be the submarine base at Faslane which is scheduled to get even  more work than it presently has because during Gordon Brown’s premiership (in 2009) the decision was taken to base all the UK’s  new submarines – including those on which the UK’s nuclear deterrent Trident  is now entirely based – at  Faslane by 2016. It is a substantial facility to say the least viz:

“In May 2009 the then Minister for the Armed Forces announced that three Trafalgar Class submarines will transfer to Clyde by 2017, joining the Vanguard Class submarines and the Royal Navy’s new Astute Class vessels.

The announcement confirmed HM Naval Base Clyde’s future as the home of the UK Submarine Service and paved the way for Faslane to become the country’s submarine centre of specialisation.” (Once the transfer of work to Faslane has happened it will contain: “Four nuclear powered Vanguard Class SSBN submarines – HMS Vanguard, HMS Victorious, HMS Vigilant and HMS Vengeance – which between them maintain a continuous at sea presence of the UK’s Independent Strategic Nuclear Deterrent.

“Eight Sandown Class Single Role Mine Hunters (SRMH)….

“HM Naval Base Clyde can be thought of as a garage for all these vessels – keeping them ready to go to sea – and the hotel for the ship’s crews.  Indeed, with over 2,000 beds, the base is one of the largest hotels in Scotland!…

“In March 2010, the MOD signed a long-term partnering agreement with Babcock, consolidating the company’s relationship with the base until 2025, guaranteeing cash savings for the MOD of at least £1.5 Billion.  The agreement also helped to protect the long-term future of the maritime industry, hlping to preserve capabilities and vital skills neded to carry out future work.

“The Naval Base is the largest single site employer in Scotland, currently employing around 2,500 service and civilian personnel, of whom around 1,500 work for Babcock.  When Fleet staff and other Lodger Units are taken into account, the total number of
people based at HM Naval Base Clyde rises to around 6,500.” http://www.royalnavy.mod.uk/operations-and-support/establishments/naval-bases-and-air-stations/hmnb-clyde/what-is-hmnbc/

That  gives some idea of the potential  scale of the losses of jobs and expertise  and the complications caused by contracts already completed.

Since the 2011 elections in Scotland which unexpectedly delivered  the SNP a majority in the Scottish parliament, the SNP leader Alec Salmond  has attempted to push an “independence lite” agenda  (http://www.telegraph.co.uk/comment/columnists/alancochrane/8516142/Dont-believe-SNP-on-Diet-nationalism.html)
which includes  the suggestion that Scotland would “share” defence facilities with the UK. This would be impractical because of (1) the gross imbalance in the size of the defence resources of  an independent Scotland and the UK and (2) the potential for conflicting foreign policies meaning the UK would want one thing and Scotland another. (http://www.telegraph.co.uk/news/uknews/scotland/8515034/Sir-Mike-Jackson-tells-Alex-Salmond-British-soldiers-have-only-one-master.html).
In addition, in the case of the nuclear submarines and deterrent,  the SNP has as a policy of  the removal of these from Scotland. (http://thescotsman.scotsman.com/politics/SNP-call-to-scrap-nuclear.4666024.jp).   The submarines and the deterrent could be  transferred to the facility at Devonport, Plymouth.

A taste of what the re-shaping of the military in Scotland would mean can be gained from the response to the cuts proposed by the Coalition Government in Westminster:

“There are specific parts of Scotland where defence-related employment makes up a  significant proportion of local employment, including Moray which is home to two RAF
bases  (Kinloss and Lossiemouth) and Fife, which is home to RAF Leuchars. Cuts in the defence  budget (made in Westminster) will profoundly affect localities such as these. The UK  Government has confirmed that RAF Kinloss will cease to operate after 31 July 2011 and the  futures of RAF Lossiemouth and RAF Leuchars are still uncertain (an announcement will be  made after the Scottish elections). In response, Moray Council and local businesses and  communities have launched an action plan to stimulate the local economy in response to  fears about the impact of the RAF job cuts and subsequent reductions in local economy  activity and spending (BBC News 18th March 2011)”. (http://www.sac.ac.uk/mainrep/pdfs/publicsectorbudgets.pdf).

But even if an independent Scotland was wealthy,   it would not simply be a question of  taking over the Scottish military facilities which presently exist. These exist within the context of  a UK defence strategy.   It is improbable  that an independent Scotland
would wish to get involved in overseas escapades such as Iraq and Afghanistan.
Her  military  needs would  be to defend Scottish territory and patrol her
territorial waters.  That alone would mean that much of the military establishment in Scotland would be scrapped and new equipment and training provided., another considerable expense.

The idea that Scotland could  defend its  land and territorial seas  against a determined and  large enemy is in truth nonsensical. Scotland is a relatively  large country  (30,000 sq miles) with a small population (5 million) , most of which is crammed into the lowland stretch from Glasgow to Edinburgh.   Compare that with England, 50,000 sq miles and
a population of 54 million.  Scotland has neither the bodies on the ground or the wealth to present a serious threat to an invader.

Because of  Scotland’s inevitable military weakness,  the rest of the UK (in reality England)  would have to come to her aid if she was invaded by an enemy who was using Scotland as a backdoor to invading England.  Scotland would also shelter under the UK
nuclear deterrent and her general military and diplomatic strength.   Those two things cannot be avoided. However, it would be reasonable to make it a condition of independence that Scotland paid the remainder of the UK for that protection.

The wages of Scottish independence – public sector employment

One of the many major issues which an independent Scotland would have to address is the extent to which the Scottish economy is  dependent on public spending and in particular the number of public sector jobs which would be  moved from Scotland to England  for strategic reasons (for example,  nuclear submarines),  because Scotland could not afford to fund them (for example, troops) or  the repatriation of public sector jobs which service England but which were moved to Scotland to provide employment there (for example, the administration of much of English social security).

In the first quarter of  2010 Scottish Government employment figures were:

2,427,000 Total employment  in Scotland

1,816,800 in Private sector employment   comprising 74.9% of employment

610,200 Public sector employment  comprising  25.1% of employment

http://www.scotland.gov.uk/Publications/2010/06/15171937/8
This compares with 20.1% of English GDP being public sector.

http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/snep-05625.pdf

A quarter of employment in the public sector is  daunting enough,  but  the distinction between public and private is increasingly blurred.  If the directly employed public employees and private employers largely or wholly dependent on public funding are included the numbers  rise substantially, viz:

“Research by Manchester University shows the total figure climbed from 603,773 in 1998 to 772,048 in 2007.

The sharp growth can be explained by the researchers combining the number of people directly employed in the public sector with the number indirectly employed in the “para state” sector where private employers depend on state support.

The “para state” includes everything from consultants working for private companies to people involved in rubbish collection, healthcare and nursery education and other jobs
where the funding is dependent on the Government.

The report claims the UK has an “undisclosed business model of using publicly supported employment to cover the continuing failure of the private sector to generate welfare through job creation”. http://www.heraldscotland.com/news/home-news/one-third-of-scots-work-in-public-sector-1.1003448

However the 2007 figure does not include the banking jobs which became public after the bail-out of RBS and HBOS another 36,000 can be added taking the total to over 800,000 the Scottish dependent on public funding . That constitutes 30% of total Scottish employment.

The independent  Scottish Item Club (http://www.ey.com/UK/en/Issues/Business-environment/Financial-markets-and-economy/Economic-Outlook—What-is-ITEM-Club)
2010 report highlighted the dangerous reliance of the Scottish economy on
public funding:  “

‘ Scotland‘s second major hurdle is its dependency on the public sector. The public sector has contributed to over 30% of Scotland’s GDP growth over the last 10 years, compared to just 20% in the rest of the UK.
Scottish ITEM Club says that the impending squeeze on public sector spending
will have a disproportionate impact on Scotland’s economic recovery.

Dougie Adams[ senior economic advisor to the Ernst & Young Scottish ITEM Club] comments: “Although there is scope for productivity and efficiency improvements to be made to Scotland’s public sector, which may help to mitigate some of the impact of future spending cuts, a decline or slow down in public sector output will significantly hamper Scotland’s economic performance over the next few years.”

While the extent of any budgetary cuts remains unclear, recent forecasts suggest that Scotland won’t see a return to 2009 levels of public sector spending before 2020, such is the scale of the retrenchment. This will inevitably have a knock on impact on jobs; Scottish ITEM Club predicts that public sector employment in Scotland will decline by around 30,000 over the next four years.’ (http://www.ey.com/UK/en/Newsroom/News-releases/Item—10-06-06—Scottish-ITEM-Club-summer-2010-forecast).

Scottish public sector employment is divided between the devolved (that which is  the responsibility of Scotland) and the reserved (that which arises from the powers
which have not been devolved).  The breakdown of the two is as follows:

Chart 4: Breakdown of devolved public sector employment by sector, Headcount, Q1 2010 http://www.scotland.gov.uk/Publications/2010/06/15171937/5

Chart 4: Breakdown of devolved public sector employment by sector, Headcount, Q1 2010

Chart 5: Breakdown of reserved public sector employment by sector, Headcount, Q1 2010 http://www.scotland.gov.uk/Publications/2010/06/15171937/6

Chart 5: Breakdown of reserved public sector employment by sector, Headcount, Q1 2010
Chart 6: Breakdown of devolved civil service employment, Scotland, Headcount, Q1 2010 http://www.scotland.gov.uk/Publications/2010/06/15171937/7

Chart 6: Breakdown of devolved civil service employment, Scotland, Headcount, Q1 2010
Chart 7: Breakdown of reserved civil service employment, Scotland, Headcount, Q1 2010

Chart 7: Breakdown of reserved civil service employment, Scotland, Headcount, Q1 2010
How much of Scotland’s public sector employment would  vanish if independence occurred?  This is impossible to exactly quantify because the unknown factor is what Scotland would be willing and able to fund.  Nonetheless,  Scotland would definitely lose the jobs which serviced England and items such as the nuclear submarine facility at Faslane and would have to substantially reduce the number of jobs serving
Scotland.

The truth about UK oil and gas

The Scots Numpty Party (SNP) bases its case for the viability of Scotland’s independence  on the idea that wicked England has been “stealin’ ouir oil” and that  if only they had control of the tax revenues from UK oil and gas Scotland would become a Caledonian El Doraldo.  Sadly for such people a 2009  a  Scotland Office paper  “Scotland and Oil” dealing with the tax income from oil  and gas  fields around the UK painted a rather different picture. It concluded that:

“• If all North Sea oil revenues had been allocated to Scotland there would only have been 9 years out of  the last 27 when Scotland’s finances would have  been in surplus.

• Including all North Sea oil revenues the last year  of surplus was in 1988-89 and since then there has been 18 years of annual deficits with Scotland’s spending being greater than the tax raised in Scotland.

• Even if all oil revenues had been allocated to Scotland the total deficit would have outweighed the total surplus by £20bn since 1980-81. “ (see page 1 – all references below to pages without a url  refer to this url – http://www.scotlandoffice.gov.uk/scotlandoffice/files/Scotland%20and%20Oil%20-%20Background%20paper.pdf)

So there you have it, the official view is that even if all the oil and gas revenues were   allocated to Scotland they still would not pay their way. Of course, a substantial part
of the oil and gas  tax revenue would not go to Scotland because of the fields  in
English waters.  Exactly how much is debatable, but  most of the remaining gas
is in English waters, viz:

“The SNP claims that Scotland would receive 95 per cent of oil revenue, but its calculation is based on the total revenue from oil and gas. Its opponents say that they do not take into account the large number of gas fields in English waters.

“THE EXPERT SAYS: Prof Haszeldine says: “The vast majority of the oil is in Scottish waters. With practically all of the gas in  the UK in the southern North Sea, that is in ‘English’ territory.” He says it is hard to separate the revenue from oil and gas. “(http://thescotsman.scotsman.com/politics/Can-oil-and-gas-fuel.2834598.jp)

There is also the intriguing prospect of  the outer Islands, the Orkneys and Shetlands,  not wanting to leave the UK or seeking independence.  That would take more oil and gas
revenue out of Scottish hands.

The fact that even  the total  oil and gas tax revenues did not bridge the gap between what Scotland received in money from the Treasury and what she contributed to the Treasury is unsurprising. The price of oil is high now but this is an abnormal. In the period 1980-2003, the price was always below $20 a barrel  apart for two years in the mid 1990s when it was a couple of dollars a barrel  higher.   (see page 3 “Scotland and Oil”) . The price did not rise above $50 dollars a barrel until 2007.

There has also been great volatility in the tax take in recent   years:

“In July last year [2008-9] sitting with the price of oil breaking new highs at $147 a barrel and  projected revenues for the current year [2008-09] at £13.2bn, finances were looking  incredibly good. However, sitting today with oil prices at $70 per barrel and projected  revenues for the current year [2009-10]  of £6.9bn the finances would be looking  substantially different and spending plans would have had to have changed.” (see page 10 “Scotland and Oil”).

At present the Scottish Parliament is in a very fortunate situation. It knows, more or less,  what revenue it will have to spend  for the coming financial year because its funding comes from the UK Treasury. Thus it is spared the  responsibility of raising money from its electors . It is in the same position as, for example, the BBC.

If Scotland were independent it would have to raise the money to be spent by central government.  That would bring a very different relationship between the politicians
and the Scottish electorate.   If  a very large slice of  Scottish government revenue was dependent on oil  and gas revenues , massively swings in the tax collected from year to year, as happened in the years 2008/9 and 2009/10 , it  would  make  forward planning very difficult indeed.  To understand just how volatile tax revenue from oil and gas  has been since production began see http://www.hmrc.gov.uk/stats/corporate_tax/table11-11.pdf.
No electorate is going to be cheering if politicians are constantly having to change spending plans.  The worse case scenario  would be that the oil and gas revenues would be so low that  a Scottish government would simply not be able to fund  the ordinary business of government.  That is not so far-fetched because of the great difference between revenue and expenditure when oil and gas revenue is ignored.   For  2007/8 the Scotland Office estimated that  without including any revenue from oil and tax,  Scotland paid £45,191 billion  into the UK exchequer and received £56,285 billion back, a deficit of £11, 094 billion. (http://www.scotlandoffice.gov.uk/scotlandoffice/files/Time%20Series%20Analysis%20of%20Government%20Expenditures%20and%20Revenues%20in%20Scotland.pdf).

Apart from the volatility of the oil and gas price, there is also the rapidly depleting reserves of oil and gas around  the UK.   Production has already fallen from just under  3 million barrels a day in 1999 to  about 1,25 million barrels in 2014. ( see page 5 “Scotland and Oil”).  The amount of oil and gas will continue to fall over the medium term and the quantuity  oil and gas extracted will be strongly influenced by the oil and gas price. The
lower it is, the less exploitation of the smaller marginal fields.  In the medium term Scotland can look forward to diminishing tax returns whatever happens.

There is a further fly in the Caledonian water.  As the price of oil and gas has risen and the
political volatility of  many of the major oil and gas producers has increased, increased interest has been shown in extracting gas and oil from shales. Most of the likely sites in the UK are in England or English waters.  http://www.bgs.ac.uk/research/energy/shalegas.html.
If this source of hydrocarbons proves to be as abundant  as its advocates claim, the demand for oil and gas from the ever more marginal fields around the UK will diminish.

There are many other economic dragons which an independent Scotland would need to slay, including dealing with their over-reliance on taxpayer funded jobs and how they would fund their share of the UK’s public financial obligations at the point of independence, but the volatility and shrinking of the UK’s oil and gas tax receipts  would be arguably their greatest challenge simply because of the heavy dependence the
advocates of independence have placed upon their continuation at a high rate.

England calling 2011-05-14 22:19:04

The Scots Numpty Party (SNP) bases its case for the viability of Scotland’s independence  on the idea that wicked England has been “stealin’ ouir oil” and that  if only they had control of the tax revenues from UK oil and gas Scotland would become a Caledonian El Doraldo.  Sadly for such people a 2009  a  Scotland Office paper  “Scotland and Oil” dealing with the tax income from oil  and gas  fields around the UK painted a rather different picture. It concluded that:

“• If all North Sea oil revenues had been allocated to Scotland there would only have been 9 years out of  the last 27 when Scotland’s finances would have  been in surplus.

• Including all North Sea oil revenues the last year  of surplus was in 1988-89 and since then there has been 18 years of annual deficits with Scotland’s spending being greater than the tax raised in Scotland.

• Even if all oil revenues had been allocated to Scotland the total deficit would have outweighed the total surplus by £20bn since 1980-81. “ (see page 1 – all references below to pages without a url  refer to this url – http://www.scotlandoffice.gov.uk/scotlandoffice/files/Scotland%20and%20Oil%20-%20Background%20paper.pdf)

So there you have it, the official view is that even if all the oil and gas revenues were   allocated to Scotland they still would not pay their way. Of course, a substantial part
of the oil and gas  tax revenue would not go to Scotland because of the fields  in
English waters.  Exactly how much is debatable, but  most of the remaining gas
is in English waters, viz:

“The SNP claims that Scotland would receive 95 per cent of oil revenue, but its calculation is based on the total revenue from oil and gas. Its opponents say that they do not take into account the large number of gas fields in English waters.

“THE EXPERT SAYS: Prof Haszeldine says: “The vast majority of the oil is in Scottish waters. With practically all of the gas in  the UK in the southern North Sea, that is in ‘English’ territory.” He says it is hard to separate the revenue from oil and gas. “(http://thescotsman.scotsman.com/politics/Can-oil-and-gas-fuel.2834598.jp)

There is also the intriguing prospect of  the outer Islands, the Orkneys and Shetlands,  not wanting to leave the UK or seeking independence.  That would take more oil and gas
revenue out of Scottish hands.

The fact that even  the total  oil and gas tax revenues did not bridge the gap between what Scotland received in money from the Treasury and what she contributed to the Treasury is unsurprising. The price of oil is high now but this is an abnormal. In the period 1980-2003, the price was always below $20 a barrel  apart for two years in the mid 1990s when it was a couple of dollars a barrel  higher.   (see page 3 “Scotland and Oil”) . The price did not rise above $50 dollars a barrel until 2007.

There has also been great volatility in the tax take in recent   years:

“In July last year [2008-9] sitting with the price of oil breaking new highs at $147 a barrel and  projected revenues for the current year [2008-09] at £13.2bn, finances were looking  incredibly good. However, sitting today with oil prices at $70 per barrel and projected  revenues for the current year [2009-10]  of £6.9bn the finances would be looking  substantially different and spending plans would have had to have changed.” (see page 10 “Scotland and Oil”).

At present the Scottish Parliament is in a very fortunate situation. It knows, more or less,  what revenue it will have to spend  for the coming financial year because its funding comes from the UK Treasury. Thus it is spared the  responsibility of raising money from its electors . It is in the same position as, for example, the BBC.

If Scotland were independent it would have to raise the money to be spent by central government.  That would bring a very different relationship between the politicians
and the Scottish electorate.   If  a very large slice of  Scottish government revenue was dependent on oil  and gas revenues , massively swings in the tax collected from year to year, as happened in the years 2008/9 and 2009/10 , it  would  make  forward planning very difficult indeed.  To understand just how volatile tax revenue from oil and gas  has been since production began see http://www.hmrc.gov.uk/stats/corporate_tax/table11-11.pdf.
No electorate is going to be cheering if politicians are constantly having to change spending plans.  The worse case scenario  would be that the oil and gas revenues would be so low that  a Scottish government would simply not be able to fund  the ordinary business of government.  That is not so far-fetched because of the great difference between revenue and expenditure when oil and gas revenue is ignored.   For  2007/8 the Scotland Office estimated that  without including any revenue from oil and tax,  Scotland paid £45,191 billion  into the UK exchequer and received £56,285 billion back, a deficit of £11, 094 billion. (http://www.scotlandoffice.gov.uk/scotlandoffice/files/Time%20Series%20Analysis%20of%20Government%20Expenditures%20and%20Revenues%20in%20Scotland.pdf).

Apart from the volatility of the oil and gas price, there is also the rapidly depleting reserves of oil and gas around  the UK.   Production has already fallen from just under  3 million barrels a day in 1999 to  about 1,25 million barrels in 2014. ( see page 5 “Scotland and Oil”).  The amount of oil and gas will continue to fall over the medium term and the quantuity  oil and gas extracted will be strongly influenced by the oil and gas price. The
lower it is, the less exploitation of the smaller marginal fields.  In the medium term Scotland can look forward to diminishing tax returns whatever happens.

There is a further fly in the Caledonian water.  As the price of oil and gas has risen and the
political volatility of  many of the major oil and gas producers has increased, increased interest has been shown in extracting gas and oil from shales. Most of the likely sites in the UK are in England or English waters.  http://www.bgs.ac.uk/research/energy/shalegas.html.
If this source of hydrocarbons proves to be as abundant  as its advocates claim, the demand for oil and gas from the ever more marginal fields around the UK will diminish.

There are many other economic dragons which an independent Scotland would need to slay, including dealing with their over-reliance on taxpayer funded jobs and how they would fund their share of the UK’s public financial obligations at the point of independence, but the volatility and shrinking of the UK’s oil and gas tax receipts  would be arguably their greatest challenge simply because of the heavy dependence the
advocates of independence have placed upon their continuation at a high rate.

Make sure the costs of Scottish independence get into the media

The letter  below was published in the Times 10 May 2011. It is extremely important that the debate on independence for Scotland  is conducted on the basis that Scotland will not be allowed to walk away from the financial obligations of the UK.  Left to his own devices Cameron will almost certainly be willing to sell-out English interests, for example, by developing a formula which did not require Scotland to take a share of the UK’s financial obligations based on their proportion of the UK population but on some spurious calculation based on need (think Barnett Formula) or a continuation of the English subsidy to Scotland for years as a “transition” payment.

Cameron was asked at Prime Minister’s Question on 11 May 2011 to confirm that the Scotland would, in the event of independence, be expected to take on a share of the UK National Debt and cease to receive any subsidy from England.  He confirmed that this was the case – you could hear the reluctance in his voice – but then said that he did not want to campaign against independence by threatening the Scots, but by persuading them that staying in the Union was the best thing for all concerned.   It was very telling that Cameron thought that the mention of Scotland taking on part of the National Debt and the ending of the English subsidy  constituted threats.  This matter needs close watching.

Sir – I have no visceral objection to Scotland leaving the Union  provided the Scots meet their UK financial obligations. This means taking on a share proportionate to Scotland’s percentage of the UK  population of the UK’s  financial obligations existing at the point
of  independence. These obligations would include the National Debt; all public  sector pensions; all PFI/PPP  contracts  and any other public debt not covered by the previous categories.

The English subsidy to Scotland – currently around £8 billion a  year – should cease and the division of the UK oil and gas fields would be  decided on the UN Law of the Sea which defines territorial waters as those  within a line drawn at the angle of the border of two countries. That would  place a significant amount of oil and gas in English waters. In
addition, the  many English public sector jobs which have been moved to Scotland should be  repatriated.

Yours sincerely,

Robert Henderson

NB  On the day my letter was published, there were several other letters in the Times which also dwelt on the question of Scotland taking on a proportionate share of the UK’s financial obligations.  This may be a signal that the Murdoch papers have decided to push this issue.

How English football became foreign football played in England

Robert Henderson

English football has “enjoyed” the benefits of more or less unrestricted market forces
and the globalist ideology for twenty years. The result is instructive: a combination
of huge amounts of new money (primarily from television, sponsorship, inflated ticket
prices, the cynical merchandising of club strips and money introduced by immensely rich foreign owners) and greatly increased freedom of movement for footballers has gone a long way to destroying the character of English professional football and the nature of its support.

Before all this happened English league football had existed very successfully for more than a hundred years – the Football League was formed in 1888, the first in the world. With 92 clubs, England has supported (and still supports) the largest full-time professional football league in the world (since 1992 the Football League has been divided into the Premier League – the old First Division – and the Football League which contains the other three divisions. As there is relegation and promotion between the Premier league and the rump of the Football League, the position structurally is essentially the same as the old 4 division Football League).

Despite many alarms about clubs going bust, very few went out of business in those one
hundred odd years. Their teams were overwhelmingly staffed by Englishmen and the minority who were not English were almost always drawn from the rest of the British Isles. Players frequently stayed with one club for much of their career and many came up through the youth and reserve teams of the clubs for which they played. Frequently the players were also supporters from childhood of their clubs. Ticket prices were cheap and even the poor could regularly watch their teams. It was truly a game for all.

The poorer clubs made ends meet by selling players to the richer clubs. Even if a player was out of contract, a club could demand a transfer fee or insist on a player continuing to
play for them, provided they had offered the player another contract not inferior to the one he had previously had with them. Until the early 1960s, players were subject to a maximum wage and could not move at all if a club refused to release their league registration.

Very much a controlled market. The point is it worked. English club football was stable. After the reforms of the 1960s players had reasonable freedom of movement and decent wages. The Football League was also strong in footballing terms. Until they were banned from European competition in 1985 after the Heysel stadium disaster, English clubs  dominated European club competition, winning the European Cup every year between 1977 and 1984. Although such extravagant success was not matched at national level, the England side had a record which was more than respectable – in the 1990 World Cup, despite having been kept out of European club competition for five years, the England side reached the  semi-finals.

In twenty years the leading English clubs have gone from being staffed overwhelmingly by English players to a position whereby most Premiership clubs regularly put out sides with
fewer than half the side made up from English players. In some cases, such as Fulham and Chelsea, teams frequently take the field with two or fewer English players. In 2009/10 the average number of foreign players in the first team squads of Premier League clubs was 13. (http://news.bbc.co.uk/sport1/hi/football/eng_prem/8182090.stm.) Moreover, the more prominent the club, the less likely English players were to play English. Arsenal illustrates the change dramatically: 1989-90 season: 19 players were born in UK, two born abroad; in 2009-10 four players were born in the UK, 23 were born abroad. The Premier League inquiry into the “tapping-up” of the then Arsenal and England left back Ashley Cole by Chelsea (http://news.bbc.co.uk/sport1/hi/football/eng_prem/4596209.stm)n quotes Peter Kenyon of Chelsea as claiming that ‘Cole told him at the meeting that there were a series of cliques at Arsenal, that the “team was primarily run by the French boys” and that he was concerned with a lack of team spirit at Highbury. (http://www.independent.co.uk/sport/football/premier-league/french-clique-runs-arsenal-coles-revelation-to-chelsea-492976).
That epitomises what is wrong with the current English elite mentality. Arsenal
are a team run by a French manager who has systematically excluded English
players from the team whilst ensuring that his own countrymen are dominant in
the imports.

Why do foreign managers favour their own? It is partly because those are the players they
know. They come to England knowing next to nothing about English players other than those in the top clubs or England side. Football below the Premier League is unknown to them. But there is also the ethnic factor. When a foreign manager comes into a country the thing he is most fearful of is a homogeneous phalanx of native players. He fears this because they people he doesn’t understand and because they are representatives of the dominant culture. The manager’s response is (1) to divide and rule by bringing in many foreigners and (2) to bring in many of his own countrymen to act as a cultural guard for him.

But it is not only foreign managers who have gorged on foreign players. British managers,
including English ones, have done so albeit to a lesser degree. One of the drivers of this behaviour is driven by the demands of owners for instant success. It is obviously easier to buy an established player from abroad than taking a chance on young English players untried at first team level. Even if the foreign players do not bring success the manager can say well I tried and the board can point to foreign purchases as evidence that they are “willing to invest”. However, there are other incentives, legal and illegal, for English managers to buy foreign. Managers’ contracts can contain clauses which give them a percentage of any fee if a player is subsequently sold on. That’s the legal way. The illegal way is to take “bungs”, that is, payments made to a manager by the selling club as a reward for selling a player they would not otherwise have sold or persuading the board of the buying club to pay far more than a player is worth. Deals for foreign players make it much easier to hide bungs because the buying and selling clubs are in different legal jurisdictions.

The destruction of the old ties between players and their clubs has other pernicious effects.
Foreign players are mercenaries and move very frequently chasing higher wages. The wages of players have become so astronomical that the future of many clubs has been placed at risk. The fans have been milked by ticket prices which have gone through the roof. Many of the poorer followers who had watched their clubs man and boy have found themselves unable to continue going regularly to games. What has happened in the Premiership is mirrored in varying degrees by the clubs in the Football League.

If other circumstances had remained the same, things might not have changed radically. But of course circumstances did change and, indeed, the Premier League would almost certainly not have been formed when it was formed if new media opportunities had not arrived. Satellite television was in its infancy, but provided a dynamic competitor for the  terrestial channels. The only British satellite broadcaster BskyB was in severe difficulties in its early years. The company decided to try to save itself by concentrating on high class sport. It began paying massive amounts for sporting events which had previously been seen only on terrestial TV. No sport was more handsomely rewarded than Premiership football. The formation of the Premier League resulted in a five year contract with BskyB worth £304 million, riches which utterly dwarfed anything which had gone before. Not only that, but the amount of televised football was massively increased. That in turn increased media exposure generally which inflated revenue greatly as international interest grew. The Premiership TV deal in 2010 was worth £1.4 billion (http://www.independent.co.uk/sport/football/premier-league/premier-league-nets-16314bn-tv-rights-bonanza-1925462.html)

To the new TV money was added much increased sponsorship deals, itself driven by the additional media exposure football was getting. Merchandising became a racket with the larger clubs changing their strips every five minutes. Clubs also found they could put their ticket prices up substantially and still fill their stadia. This was not surprising because Margaret Thatcher had insisted after the Hillsborough disaster in 1989 that clubs in the higher divisions become all-seater. That commonly reduced the capacity of stadia by 50%. By the early 1990s that policy was taking effect.

So much money came into Premiership football that it changed utterly the way the top clubs were run. Many floated on the stock market and became responsible first and foremost to their shareholders. They could also afford to pay wages which matched those of the more extravagant clubs on the continent such as Real Madrid and Inter Milan. If nothing else had  changed, it is a fair bet that the likes of Manchester  United would still have employed some of the great foreign players of the world. However, the numbers would have been few and the quality high. Unfortunately, in the decade in which the new money became available, two events greatly increased the mobility of players both
domestically and internationally.  These led to a massive influx of foreign players, managers, coaches and eventually owners into England.

The first event was ever increasing scope of the EU’s single market regulations followed by the “Bosman ruling”. Together they allow free movement within the EU of players with
citizenship of an EU country, provided the player is out of contract. (Bosman is an obscure Belgian footballer who in the mid 1990s successfully challenged the right of his  club to prevent him playing at the end of his contract by refusing to transfer him by holding onto
his registration).

The position was worsened by the pusillanimous behaviour of successive British Governments when dealing with players from outside the EU. In theory any non-EU player can be banned from playing in Britain. However, the Major government introduced a system of work permits for such players whereby any player playing more than 75% of his country’s international matches in the previous year could play in Britain (the rules
were somewhat tighter for the weaker FIFA ranked nations). Not content with this concession, clubs began pleading special circumstances, to which the Government almost invariably acceded if the appeal was from a leading  club. The result was that for the Premiership at least, any player from anywhere could in practice be employed.

Without the Bosman ruling allied to the Single Market regulations and government weakness over non-EU  players, the basic form of British football would have remained. Players would not have been able to move very freely between countries or even within clubs in England. Football wages would still have risen, but by nothing like the as much as they have because the bargaining position of players would have been much less.

Perhaps most importantly, teams in the higher divisions, including the Premiership would
have spent the money they have allowed to go out of English football through foreign transfer fees and wages (very few English players have gone to foreign clubs) on English players and with English clubs. A good deal of the transfer money would have gone to  clubs in the lower divisions, strengthening their position and English football generally. As things stand, Premiership clubs have virtually ceased buying players from the divisions
below the Premier League.

The effect of the ever growing reliance on foreign players is the exclusion of not merely established English players from the leading sides but also the denial of opportunity to the coming generation of England players. Talented English youngsters are being denied regular opportunities or any opportunities at all. It was not from a lack of talent. Take the case of Liverpool. In the 1990s their academy produced McManaman, Gerrard, Fowler, Owen, Carragher. That was under British managers. From 2000 to 2010 Liverpool had foreign managers, Houllier and Benitez. Not a single Academy player gained a regular place in the first team. This was all the more surprising because Liverpool won the FA Youth Cup in successive years (2006,2007). To add insult to injury, Benitez not only refused to use any the Academy players from these years, he instigated a “reform” of the Academy which prompted the departure of successful Academy director, the old Liverpool
player Steve Heighway.

Opportunity is the key. This has always been a problem. To take a few examples from the 1980s Peter Beardsley nearly slipped through the net before making it in the big time, John Aldridge was in his late twenties before being given a chance in the old First Division and Gary Lineker was a comparatively late developer who did not play for England until he was twenty-three. If this occurred when most places in the top division of English football were available to Englishmen, it is one greatly magnified today when most positions are not available to Englishmen.

All the major English clubs have academies with age group teams running Ajax-style from
primary school age upwards. In the first half of the nineties, Man United’s youth football produced Beckham, Scholes, Butt and the Neville Brothers for England. Ominously in the last five years, no  other English youth player has come through to be a first team regular. In the past fifteen years, Arsenal have produced only three players from their own resources (Parlour,Ashley Cole and Jack Wilshire) to command a regular place in the first team. Chelsea have produced one – John Terry.

The denial of opportunity to English players inevitably damages the English national side. There are 20 teams in the Premiership which gives 220 starting places. Less than half of those places go to English players. Does anyone doubt that if another 120-150 or so English players were given the opportunity to play in the Premiership, a dozen or so would not show themselves to be of international quality?

All in all, a very dismal story for anyone who cares about the long-term health of English football, which is looking less than rosy. Players’ wages have become so grossly inflated – they have risen fantastically since 1990 with players being paid £200,000+ a week at the top of the scale – that they threaten the viability of many clubs, A few clubs, such as Blackburn Rovers when they won the Premiership, have managed to arrive at the absurd situation of playing more in wages than their total income.

The heavy dependence on TV money is potentially dangerous. In 2000 the English Football League (then known as the Nationwide Football League) discovered the worth of a private contract. They signed an agreement with ITV digital for a three year contract worth around £300 million to show Nationwide games. A year into the contract, ITV Digital  found that they grossly overpaid for the contract and presented the Nationwide with a take it or leave offer of £50 million instead of the contracted £189 million which was still to be paid. This was refused and ITV Digital placed in administration.
(http://www.independent.co.uk/news/uk/crime/football-league-sues-itv-digital-for-acircpound178m-651218.html).
The result was many clubs below the Premier League being severely embarrassed as they had budgeted on the assumption that the ITV Digital money would be paid.  The same scenario could conceivably hit the Premier League.  BskyB no longer have a monopoly of Premier League TV rights because of the intervention of the European Competition ommission. Setanta obtained some of the rights when the last TV contracts were signed. They rapidly failed  (http://www.guardian.co.uk/football/2009/jun/22/setanta-espn-premier-league-tv).
It is conceivable that the at some time in the future either BskyB will run into trouble or the Premier League will cease to have its international appeal and bids for Premiership matches plummet.  That would place most Premiership clubs and all Football League clubs
(they receive a share of the Premier League money) in serious difficulties because many of their players are on long contracts (as a result of Bosman) with grossly inflated wages. Clubs such as Manchester United and Chelsea would doubtless be able to become very rich by marketing their own TV but most clubs would be much poorer.

The other  financial dangers to football in England arise from foreign owners. Some, such as the Glazers at Manchester United, take a great deal of money out of the club to both finance the massive borrowings they made to purchase the club and in profits. That means fans are paying more and more for tickets and merchandise and there is less money to spend on players.  The situation is also only sustainable if United continue to have the same sort of success and world-wide appeal. Others are immensely rich men or consortia such as the owner of Manchester City and Chelsea. The danger here is that the owners may lose interest and sells the club on to someone without such deep pockets who cannot bear the cost of the existing players’ contracts. The other danger is that an individual such as Roman Abramovich runs into the same sort of trouble that his fellow Russian oligarch Mikhail Khodorkovsky who now languishes in a Russian jail or simply goes bust. That would leave the club high and dry unable to meet running costs. As more than half of current Premier League clubs are foreign owned this is a real source of danger.

What the present plight of English football shows is that the market is inappropriate in some spheres of economic activity. Football is not the same as selling baked beans (as the erstwhile MD of Birmingham City, Karen Brady, once said). Football is about sport. It is
about trib al loyalty. The emotional relationship between the fan and the club is intense. It is formed most commonly in youth and remains until the fan’s dying day. It is only incidentally about money and business.

A combination of excessive money and the free movement of people has turned a social institution, English professional football, on its head. It has gone from being a sport available to all even at its highest level to one affordable only to the better off. The national character of the game has been tossed aside in the pursuit of money. The long term interests of the English game have been ignored. And for what? The satisfaction of businessmen who have no concern for anything other than the balance sheet.

The ill effect of market forces and free trade on football illustrate the shortcomings of the
market. When selling bake beans it may be the most efficient and desirable method of meeting the customers needs. When more than mere material need or profit are involved, the market is not merely  inefficient in producing the desired ends but is positively destructive.

What happens in football occurs in all our major team spectator sports. County cricket games commonly start with four or five foreigners in a side; rugby union teams  are awash with South Africans, New Zealanders, South Sea Islanders  and Australians.

What goes for sport goes for the rest of British society. Our industry and commerce is
increasingly run by foreigners or exported abroad  incontinently; senior public service positions go  increasingly to foreigners. Immigration on a massive scale continues to undermine the economic prospects of native Britons.

Generally, the elite attitude is that a foreigner has exactly the same status in Britain
as a British citizen, who is no longer privileged by the fact of being British in culture as well as name. That is a recipe for the dissolution of a nation state.

The white working-class and the British elite

From the salt of the earth to the scum of the earth

Robert Henderson

Thirty years ago the primary client base  of the Labour Party was the white working-class, while the Tories still had remnants of the heightened sense of social responsibility towards the poor created by two world wars. Fast forward to 2011 and the white working-class are treated by the entire British political elite as a dangerous, almost subhuman species.

 The mixture of contempt, fear and hatred which the white working-class now draws from the political class is echoed by the elite generally, indeed by not just the elite but the middleclass as a whole. Where once the white working-class were next to uninsultable publicly, sneering references to “chavs” and “chav culture” are now commonplace in the mainstream media where they pass with barely a critical public word, while ethnic minorities seemingly have licence to publicly  insult the white working-class with impunity, vide the Coronation Street episode in January 2006 where a male Asian character accused his sister of behaving like “poor white trash”.

 What caused this immense change in the status of the white  working-class? There were three direct primary engines of change. The first was the success of Thatcher and her ideology, the second a critical point was reached in post war mass immigration, the third Britain’s membership of the EU and other restrictive treaties which tainted her sovereignty.

 Globalism and laissez faire economics

 When Margaret Thatcher became Tory Leader in 1975 the neo-paternalist stance the party had adopted since the smashing Labour victory of 1945 was changed to one of laissez faire non-interventionism, with its an inherent disdain for public provision and service. Thatcher threw away the protectionism which had sustained the white working-class, allowed much of British industry, especially heavy industry, to go to the wall, and privatised the nationalised industries. Unemployment, already at a post-war high at the end of the Callaghan government, rose dramatically to around 3 million. The unions were then weak enough to successfully attack with severe legal restraints on strikes and a ban on secondary picketing.

Unemployment has remained high since the early 1980s – the current official unemployment figures are bad enough taken at face value (around 2.5m by the international Labour survey method) – but in reality it is probably considerably higher – there are 2-3 million on long term sick benefit now compared with around 600,000 twenty five years ago. Common-sense says the country cannot in 2011 have four or five times the number of seriously incapacitated people it had twenty-five years ago. This high unemployment has kept the white  working-class largely quiescent and the unions emasculated.

Thatcher also threw away the post-war consensus that the white working-class was admirable, or at least deserving of special consideration because of their disadvantaged social circumstances. Thatcherite Tories were only interested in the working-class insofar as its members were willing to buy into the narrow aspirational template which Thatcher promoted. If you were working-class and wanted to buy your council flat and were happy to gobble up the shares of privatised national industries, the Tories approved of you; if you wanted to maintain traditional working-class employments and communities, you were a soldier in the ranks of the enemy.

Labour did not immediately cast off the white working-class as clients. That took 18 years of opposition. Through four election defeats Labour gradually jettisoned all that they stood for in their cynical quest for a way back to power. The end result was a supposedly Labour Government headed by Blair which became, quite bizarrely, even more fanatically committed to “free markets” and “free trade” than the Tories.

 Immigration reaching a critical level

 By 1979 immigration had swollen the population of blacks and Asians in Britain to a point where their numbers were significant enough to pose a serious threat to British society if racial conflict got out of hand. 

Until the end of the 1970s the official line on immigrants from all the mainstream parties was they must assimilate. Towards the end of the decade it was obvious to even the most fervent advocate of integration that assimilation was not happening. Rather, large populations of various ethnicities were stubbornly continuing to form ghettos in the major British towns and cities and were attempting to lives which as far as possible replicated those of their ancestral countries.

 To avoid having to admit what a disaster immigration had been, the British liberal left adopted an ideology to fit the facts of what was happening. That ideology was multiculturalism, a creed which rested on the fantasy that a coherent society could be produced by allowing every ethnic group in Britain to retain its separate identity. Indeed, the multiculturalists did more than say we should allow such a development, they positively encouraged ethnic minorities to remain separate. The kindest interpretation of their behaviour is that these were people enthusiastically pouring paraffin onto a fire in an attempt to put it out.

But the multiculturalists were faced by a most awkward fact. The white working-class was and always had been resolutely opposed to mass post-war immigration. Not only that but they were willing to say so publicly – the dockers had marched with Enoch Powell. Therefore, the liberal left had to do two things to prevent the white working-class from expressing their discontent both with the immigration which had occurred and with the new policy of multiculturalism , in which the native British culture was to have no privileged place but was to be merely one amongst many competing cultures. Worse, in practice the  native culture (or cultures if you prefer) was not even to be  allowed to compete because to do so would be to give the native population a public voice and a focus for their discontent.

The Labour Party at the parliamentary level was generally willing to espouse the new ideology uncritically because it fitted with their internationalist rhetoric. It also helped that the immigrants overwhelmingly voted Labour and were neatly consolidated in ghettos in the larger towns and cities where their votes were likely to elect Labour candidates more often than not.

Of course there was the seemingly ticklish problem for the multiculturalists of Labour being out of power for 18 years. In practice it did not matter, for it was not only the overt liberal left who embraced multiculturalism. Whatever their rhetoric, in practice, the Tories climbed on the multiculturalist bandwagon quickly enough. Thatcher had spoken not long before being elected in 1979 of Britain being “swamped” by immigrants. But once in office she did nothing and the position continued to worsen, not least because she signed the Single European Act in 1985 which granted any person legally resident in another EU state the right to work in Britain. And of course throughout the 18 years of Tory office, people with the “right” multiculturalist views controlled the media, academia and increasingly the civil service. They were always on hand, both behind the scenes and publicly, to ensure the Tory Government did not actually do anything to disturb the multiculturalist programme.

 Worse was to follow. In opposition the Tories followed the course of the Labour Party. Three election defeats in a row persuaded them elect as leader David Cameron, a man who adopted the same strategy for the Tories as Blair had pursued when he dumped everything Labour stood for. Cameron quickly got rid of everything which was considered “Old Tory” . This included wholeheartedly embracing multiculturalism. The electoral circle on immigration was formally closed. There is no major party to vote for if you do not want further mass immigration.

 The silencing of the white working-class voice on immigration was achieved by a number of means Most potent was the mixture of legal threats such as the various Race Relations Acts and the religious exclusion of anti-immigration views from the mainstream media. British culture was gradually relegated to a less prominent place in schools. Pupils were taught, if they were taught anything about the past, of white wickedness. The Atlantic slave trade was represented as the greatest crime of history, the British Empire nothing more than a cruel invasion and subjugation of defenceless peoples. Any sign of publicly expressed native white pride  was jumped on from everyone from politicians to teachers and denounced as xenophobia at best and racism as worst.

 It did not take long for anyone who was not a supporter of multiculturalism to be beyond the liberal elite Pale. By 2011 multiculturalism has been formally embedded into public life through a mixture of ideological sharing amongst the elite and their auxiliaries and the law, most notably in recent years by the Race Relations (Amendment Act) of 2000 which effectively places an obligation on all employers who receive public funding to demonstrate that they are not being discriminatory.

The contemptuous mentality of those who currently permit and advocate mass immigration to Britain is epitomised by a speech in 2006 to business leaders by the Governor of the Bank of England, Mervyn King. King said:”If the increased demand for labour generates its own supply in the form of migrant labour then the link between demand and prices is broken. Indeed, in an economy that can call on unlimited supplies of migrant labour, the concept of output gap becomes meaningless….The UK is not in that extreme position, but the inflow of migrant labour, especially in the past year or so from Eastern Europe, has probably lead to diminution of inflationary pressure in the labour market, relative to previous experience.

“The Home Office estimates that around 120,000 workers entered the UK from the new member countries of the European Union between March 2004 and March 2005. Without this influx to fill the skills gap in a tight labour market, it is likely earnings would have risen at a faster rate, putting pressure on employers, and, ultimately, inflation”.’ Daily Telegraph 14 6 2006.

There you have the elite view of the day: human beings are to be treated purely as factor of production along with land and capital. No greater contempt for the masses, including the white working-class, can be held.

The EU and other treaties

Whatever their public words, both the Tory and Labour parties were generally nationalist in their behaviour until well after the second world war. Traditional Tories were nationalists by conviction, while even the Labour left were in practice protective of the nation state because they strongly opposed the importation of cheap goods and cheap labour. British membership of the EU (then the EEC) from 1973 onwards changed the rules of the game for both parties.

The Treaty of Rome made Britain generally subordinate to a foreign authority. It was not like a normal treaty such as that of NATO which is formed simply for a particular limited purpose and which can be ended or withdrawn from cleanly. The Treaty of Rome was a full blown political project with the specific aim of creating a supranational political entity. Even when Britain joined, the EU’s powers to interfere with British political decisions were substantial, although nothing like as extensive as they are in 2006. It simply was not possible to be a wholehearted nationalist any more. That undermined traditional Toryism and paved the way for Thatcherism, which was predicated on the individual rather than the community.

For the Labour Party learning to love the EU took a long time. Their 1983 manifesto advocated withdrawing because the EU was viewed as a capitalist club. But as the Party painfully lurched towards accepting the globalist market-led creed, there came the realisation on the left that both globalism generally and membership of the EU were wonderful promoters of internationalism. They did not deliver the internationalism which the left had traditionally sought, all brotherly love and material sharing, but they accomplished a central part of the internationalist dream, the destruction of nations. This realisation, together with the fear they would never hold power again drove Labour away from their practical nationalism.

As the years passed the entire political class also discovered general benefits from globalism and EU membership. Being in international clubs such as the EU and the WTO effectively destroyed democratic accountability. Any policy relevant to a treaty could be pushed through with the excuse that Britain was legally bound by treaty to do this. Membership of the EU in particular ensured that the excuse could be used over vast swathes of policy. This loss of democratic accountability removed the last vestiges of white working-class power because there was no mainstream Party with a chance of forming a government to speak or act for them. The white working-class might as well have stopped voting then for all the good it now did them. 

Devolution and demonising the English

Up to 1997 the white working-class in the UK as a whole suffered much the same decline in prestige and strength. Blair’s victory in that year altered matters fundamentally. Primarily for the self-serving political reason that Labour normally depends heavily on Scots and Welsh MPs to achieve a working majority in the Commons, the Party adopted a policy of devolution for Scotland and Wales. (Northern Ireland was also brought into the devolution mix but for other reasons). It was one of the first major pieces of NuLabour manifesto-promised legislation to be enacted.

Devolution created a ticklish problem. How could it be that England, where more than 80% of the population of the UK resided and where even more than 80% of the UK’s GDP was generated, should have no national representation? Why did England not deserve its own political voice if Wales and Scotland and even tiny Northern Ireland did? Because there was no reasonable answer to that question Labour (and the liberal left generally) invented unreasonable ones: England was too big, there was no such thing as Englishness, the English had no desire for a parliament, such a parliament would only mean more politicians and expense and, most tellingly, the English could not be trusted with nationalism, a claim best translated as “The ruling liberal elite are determined at all costs to prevent the English having a voice because if they do they will look after their own interests which are currently being outrageously neglected”.

When I say ruling liberal elite I am of course including the entire political elite. A prime example of the cross-party agreement on the “dangers” of English nationalism came in a BBC Radio 4 programme Brits which went out on 10 January 2000. The then Home Secretary Jack Straw and the Tory leader of the moment William Hague appeared. This is what they said:

Straw: “[the English] are potentially very aggressive, very violent [and had in the past] used their propensity for violence to subjugate Ireland, Wales and Scotland”.

Hague:” English nationalism is the most dangerous form of nationalism that can arise in the United Kingdom, because England is four-fifths of the population of the UK…Once part of a united country or kingdom that is so predominant in size becomes nationalistic, then really the whole thing is under threat…”

The unresolved question of English devolution within an otherwise devolved UK led to a shift by politicians from the denigration of the white working-class generally to denigration of the English in general and the English white working-class in particular, the latter being commonly portrayed by politicians and the media as brutish people with the unspoken subtext “they cannot be trusted with power”. As most of the British white working-class are English, the white working-class were further marginalised. 

Devolution also had a direct material effect on England and in particular the English poor. The amount spent per head on public services has for a long time (since the late 1970s) grossly disadvantaged the English because of the Barnett Formula which was introduced to ostensibly  ”compensate” the Scots for supposed additional costs resulting from a small population spread over a large area – the problem of the Highlands and Island.  In reality, it was a Labour bribe  to win Scotch votes and beat down demands for  devolution   The underfunding of England increased after devolution.

In short, devolution weakened public provision in England compared with the rest of the UK. That diminution of provision has struck most profoundly at the English white working-class.

The gradual demoralisation of the white working class

 If laissez faire economics, immigration reaching a critical level and international treaties were the immediate reasons why the white  working-class has fallen so far from favour, the ground for their realisation was prepared during the thirty-five years which followed the Labour victory of 1945.

 It is important not to be sentimental about the white working-class before their desertion by the British political class. Britain was far from being a peaceful society. Industrial relations were seriously fraught from the Eighteenth century onwards, long before nationalisation and the modern welfare state. Much crime went unreported because working class communities refused to report it. Vicious fights regularly took place in places such as the docks and the mines. There was considerable football hooliganism. Until the Irish Free State was founded, Irish nationalism was a constant  running sore. Violent criminal gangs controlled places such as the Elephant and Castle and Brighton.

 British education until after the second world war (and the Butler Act’s implementation) was seriously flawed, with most children leaving school at 14 having received no more than a primary education – only those who committed themselves to staying until 16 received  secondary education. The general standard of education was not high,  although, unlike now, the members of the political elite were frequently well educated.

 There was also a great deal of abject poverty right up to 1939 with many working people living from wage packet to wage packet, often  with the aid of a weekly trip to the local pawnbroker. There was only a rudimentary welfare state and to fall ill if you were poor was to place yourself at the mercy of the charity of others.

Despite these shortcomings, at the outbreak of the second world war working class society was much more coherent and secure than it is today. Most important was the fact that mainland Britain was racially and ethnically a very homogeneous society, even the ancestral  cultural divisions between the English, Scots and Welsh were largely shadings within a single cultural spectrum rather than violently competing ethnicities. Across the water Ireland was a problem, but even there the divisions were political and religious rather than matters of  profound ethnic difference. Such serious ethnic tension as there was resulted from the influx of Jews fleeing Nazi Germany, but even there the persistent failure of Mosley’s Blackshirts to gain electoral support in the midst of the Depression tells its own story: vehement anti-semitism was not a widespread problem.

The homogeneity of Britain generated a sense of security because the mainland British at least did not have the distraction of chronic and serious ethnic strife. That sense of security was bolstered by the fact that each of the four home nations had their own territory which they dominated in terms of occupation of the land even if they did not formally control their territory. The white working-class generally did not feel threatened by people whom they felt had no place in Britain. Most felt, whatever their personal troubles, that at least they were secure in their own land.

Added to, and arguably arising from, this marvellous ethnic and territorial security were potent and well established social support mechanisms of the working class, viz:

 1. Unions, including their large welfare role.

 2. Co-Operative Societies – Harrods for the working class.

 3. Friendly societies.

 4. Homogeneous working-class communities which mutually

 supported their members.

 5. Large scale manual employment for the working class.

That was the position at the end of WW2, and for a considerable time after 1945 the condition of the white working-class actually improved as a full blown welfare state, rising wages and very low employment significantly increased their security and advantage.

The 1944 Butler Education Act gave all British children the chance to go to a grammar school and even those who did not gain a grammar school place got an extra year of schooling, schooling which went beyond the primary level. It was a far from perfect educational system but it was a considerable improvement on what had gone before. Most importantly, for the first time it gave large numbers of white  working-class children the chance of a first rate education and, for a significant minority, the chance to go to university.

Unions remained strong and both major political parties were committed to maintaining by protectionist measures the British economy, a fair slice of which was in any case nationalised. The white working-class were both the electoral bedrock of the Labour Party and courted by a Tory Party which realised it had to abide by the Attlee Government’s social reforms if it was to be elected (in the mid-fifties one of the proudest boasts of the Tory Government was that they had built 300,000 council houses in a year).

To this growing advantage was gradually added a de facto censorship of criticism of the white working-class. Throughout the period 1945 to 1975 there developed a pernicious habit amongst the British elite whereby public criticism of the white working-class became unacceptable in much the same way that over the past thirty years ethnic minorities have ceased to be publicly criticised.

Like any powerful class which is exempted from criticism the white  working-class abused their position, or perhaps more correctly, allowed their elected representatives whether in politics or unions, to lead them into abusive ways. The unions were all too ready to call strikes, strikes which when they affected the nationalised industries had the power to cripple British life.

The unions had become too powerful and it was their extreme propensity for “industrial action” – strikes, working-to-rule, demarcation disputes and violent picketing – which began to break down the public silence over white working-class abuses. Gradually it became acceptable for politicians and the media to criticise the white  working-class. They needed little prompting because politicians of all colours and mediafolk were more often than not were middleclass, and the middleclass had very little natural empathy with the white  working-class, just as today politicians and the media have no natural empathy with the ethnic minorities who are their current client class.

By 1970 the white working-class was outwardly as secure as a class as they had ever been and would be again. But even at the seeming height of their class advantage they were weaker than they once had been, naturally weaker than ever before in fact because sociological rats  had been gnawing away at their natural cohesion since 1945.

The mass post-war immigration began in the late 40s but it was not a major problem for the white working-class until the 1960s. More immediately damaging were the slum clearances which dominated the twenty five years after the War. These destroyed many working class communities by the simple expedient of dividing them up  between different housing estates. The working class were still living together but they were no longer the tightly knit coherent communities which had existed for generations. Instead it was strangers living together and living together not in housing which allowed an easy social life to develop, but more often than not in high rise buildings which destroyed social intimacy.

Ironically the new welfare state damaged the white working-class because it weakened the informal traditional social supports deriving from a well established community (help from friends and extended family) and led to the decline of formal supports such as friendly societies and the co-operative movement.

Education subverted

In the 1960s came the disaster of comprehensive schools and progressive educational theory. Comprehensivisation took away the ladder by which the bright white working-class child progressed, the grammar schools. The secondary modern -technical school- grammar school established by the Butler Act was far from perfect because it left large numbers of children labelled as educational failures, but that which replaced it was far worse a system. Most comprehensives simply did not have the resources or the will to provide a grammar school level education for their brightest pupils.

Progressive educational theory caused a general diminution in educational standards through a combination of its “discovery” method of learning, i.e., do not actually teach them anything, and a self-denying ordinance which forbade any criticism of a child’s work. Stir in the lunacy of producing school exams to be taken by children of all ability (GCSE) and the incontinent expansion of higher education from the late 1980s onwards, season with the quasi-commercialisation  of schools and universities through money following the pupil or student, top with school examination boards becoming overtly commercial, and you have the recipe for the mess which is modern British education, where exam grades rise inexorably while performance moves just as remorselessly in the opposite direction.

 The percentage of working-class children at university is actually lower in 2006 than it was forty years ago. Of course the numbers of children in higher education has expanded massively since the mid-sixties and in absolute numbers far more white working-class pupils go on to university in 2006 than 1966. But it counts for nothing. If more white working-class pupils may have GCSEs, A Levels and degrees now, the standard of the education they receive to gain such qualifications is so degraded from what it was forty years ago that the qualifications are next to worthless as guides to employers of a person’s ability and the education received while taking them fails to equip students for the world of work even at the basic level of literacy and numeracy.

 Had the major sources of traditional white working-class employment not been largely destroyed in the 1980s and 1990s, comprehensive education would not be so dire in its consequences for the white working class, because they would still have been employed in secure jobs which do not require much education. Instead, millions  are trapped in unemployment (admitted unemployment or disguised as ill, retired early or attending worthless courses in higher education) or in insecure and ill-paid jobs, stranded without the education to find decent, well-paid work.

 Any society also has to take into account the fact that any population contains many people who are naturally poorly equipped to do anything other than unskilled jobs. Ten per cent of the British population has an IQ of 80 or less. An IQ of 80 is the level at which psychologists generally agree someone begins to struggle to cope with the demands of an advanced society such as Britain. Such people require jobs they can do. Immigrants take those jobs and depress wages. The white working-class are being left with less and less.

 With their traditional employments largely destroyed, subject to a state educational system which leaves them ill-equipped for any job other than the unskilled, beset by cheap immigrant labour competing  for unskilled jobs and crippled by the cost of housing, the white  working-class are ever more dependent on public provision. That provision is becoming increasingly uncertain as immigrant demand for social provision multiplies, public spending soars to dangerous heights and Blair’s mania for introducing private money and companies into public provision runs riot.

 What were once the public utilities – gas, electricity, water, the railways – are becoming dearer and dearer despite providing an increasingly poor service through a lack of investment in maintenance and the shedding of jobs (the government cannot do anything to subsidise utility prices because of our membership of the EU). The poorer you are the larger part of your income is taken by these vital products and services.

 Benefits and the state pension are linked to the Consumer  Price Index (CPI) but this understates inflation substantially, primarily because the cost of housing, is not included. This understatement of inflation means that benefits and the state pension are gradually losing their value in real terms.

 There are also many people for whom the basket of goods and services is unrepresentative. For example, 14% of the index is devoted to motoring expenses which means that the RPI figure is barely relevant to non-car owners. RPI also excludes from its spending pattern such inconvenient people as OAPs surviving on the state pension because they are not “typical”. Generally, the poorer you are, the less representative of your spending RPI will be.

 Wages are also affected by official inflation figures because they are used as a benchmark for both public service and private industry wage increases. I say inflation figures because more than one index is used. The Consumer Prices Index (CPI) is the index used these days to give the headline rate of inflation. This is even less accurate a guide to the true rate of inflation than RPI because it excludes housing costs altogether. Where this figure is used to guide wage increases the real value of the wage decreases even more rapidly in real terms than benefits and the state pension.

 Then there is taxation. The poorest people in work in the population pay by far – in direct and indirect taxes combined – the highest proportion of their income in tax of any part of the population.

 Conclusion

The crime of the post-war British elite of all political colours has been to destroy the social and economic structures which gave security and viability to white working-class society without replacing them with something else. The elite mashed their communities through slum clearance, thrust mass immigration into the areas in which the white working-class lived, destroyed through “free trade” the great industries which traditionally employed them and hamstrung the unions by a mixture of legislation, cheap foreign labour both at home and abroad and the creation of a perpetual “reserve army of labour” from the native population. At the same time the white working-class were deprived of the means to create new lives and social structures through a decent education. Whatever the white working-class are now, they are the product of decisions made by the British political elite since 1945.

I am not a sentimentalist who imagines that the ideal world would be one in which the white working class continued unchanged as noble “sons of toil” or that ” working-class culture” should be preserved in aspic. Had every white working-class person in the country been converted into part of the middleclass by an unforced process of improved education and rising wages I would have seen that as part of a natural sociological change. But that of course did not happen, probably in principle could never have happened in a country the size of Britain. The white working-class have been disenfranchised. The British middle class have been at best complicit in the attack on the white working-class and at worst have taken an eager and active part in it. For decades they thought themselves personally safe from the consequences of immigration and, later, imagined that they were immune from the effects of globalisation. They find themselves unable to buy houses because of the absurd prices.  They are beginning to learn the hard facts of sociological life: mass immigration and globalisation eventually affects all but the truly rich, a poetic justice but one which harms the country.