Does a vigneron in Rousillon shed a tear for the Greeks?

Nik Darlington 9.42am

Suppose that North-Eastern England, the region tending to be most heavily dependent on internal transfer payments, went bust, à la Grèce. Would the rest of England feel happy, or even obliged, to bail the region out? Of course it would.

Even if Scotland went belly up, despite all the rumblings of independence, the rest of the UK would come to its aid - as it did, for instance, to bail out Scotland’s biggest financial institutions (and the North-East’s, come to think of it).

But does a vigneron in Rousillon shed much of a tear for the Greeks? Or more to the point, a bank manager in Berlin? Or a station master in Stockholm?

The emotional flaw at the centre of the European Union is that however many years of postwar ‘good Europeanism’ there have been, Europe’s citizens (has that term ever felt less secure?) still feel the tug of the historic, the local and the familiar, more than the modern, the continental and the abstract.

A Greek default and eurozone exit makes dreadful economic sense, unless, perhaps, you’re Greek. Yet Europe’s emotions are directing the popular response, and, in the case of those northern Europeans with apparently unimpeachable morals, even the economic response too.

Follow Nik on Twitter @NikDarlington

Why Scotland needs Devo Plus, and why Conservatives and all unionists need to support it

Alex Fergusson MSP 6.00am

Immediately following the recent launch of Devo Plus, a group on which I am pleased to sit, the Tory Reform Group tweeted:

“Devo Plus is a campaign that unionists would be worthwhile supporting.”

Needless to say, I entirely agree, but allow me to explain why.

I must begin by saying that I am every bit as much a unionist and a Conservative as all of my colleagues in the party. From Ruth Davidson to Murdo Fraser, Michael Forsyth to Malcolm Rifkind, we are all Conservatives and we are all unionists.

But what I believe we need to accept, fundamentally, is that the very notion of unionism is a variable rather than a fixed point on the constitutional spectrum. However, it is fair to say that Michael Forsyth’s view of unionism is rather different to mine, in that I firmly believe that we need to embrace that notion, rather than simply try to hide it.

My vision of unionism is a decentralising one in accordance, I think, with basic Conservative philosophy. I want to see each layer of government, from Westminster to Holyrood to local authorities, broadly raising the money they are responsible for spending.

That is the reasoning behind Devo Plus, and it is based quite simply on the principle of financial accountability - a principle that is sadly lacking in our current constitutional structure. It is practised in other strong unions throughout the world, including those of our transatlantic friends in Canada and the United States and, frankly, it is ‘beyond bonkers’ (to pinch a phrase from another former Presiding Officer!) to suggest that it cannot work here.

So for me the unionist box is firmly ticked. What about the Conservative one?

Firstly, localism is a key part of David Cameron’s overarching agenda, and Devo Plus is simply localism in action.

Secondly, it’s hardly a secret that the Scottish Tories have not exactly enjoyed increasing popularity since devolution, and a big part of that problem is our perceived unwillingness to give the Scottish people what opinion poll after opinion poll tells us they want: a more responsible, autonomous and accountable Scottish Parliament within a solid United Kingdom.

Our party - indeed, all parties - are now talking about this issue, and that is encouraging. In my view the end point is clear. The seeds of a Conservative comeback can be sown by embracing the principles of Devo Plus. We should make it clear to the Scottish people that a “no” vote in the referendum does not mean a continuation of the status quo, but that it means a journey towards Devo Plus.

Alex Fergusson is the Conservative MSP for Galloway & West Dumfries and was the Presiding Officer of the Scottish Parliament from 2007 to 2011.

Scottish Tories won’t advance until they support more devolution for Scotland

Nik Darlington 10.32am

If unionists in the Conservative party - and I presume, perhaps too romantically, this means most people in the Conservative party - want to win the Scottish independence debate, they must see the necessity for further devolution.

Resistance to devolution fuels the perceptions of English prejudice and arrogance on which the SNP feeds. It runs contrary to the party’s localism agenda, and the innate Tory values about freedom and ‘little platoons’, about power being best exercised the closer to the people it affects. And it ignores the basic fact that the surest route to a Conservative renaissance in Scotland is by forcing Scottish politicians to raise as well as spend Scottish taxes.

Yet frustratingly, resistance seems to be the default position for many Tories, most worryingly so in Scotland itself. Prior to being elected leader of the Scottish Conservatives, with minority support among her own MSPs, Ruth Davidson vowed to draw “a line in the sand” and oppose any further devolution beyond the Scotland Bill. This intransigence might have won the favour of the party faithful (though I wager Scottish party members were more scared by Murdo Fraser’s radicalism than wooed by Ms Davidson’s obduracy). But it won’t win Holyrood seats, nor will it win the impending independence referendum.

So it is hugely encouraging that yesterday some Scottish Tories lent their support to a new unionist devolution campaign that aims to challenge the SNP’s desire for total separation.

Devo Plus is headed by Jeremy Purvis, the former Lib Dem MSP. It has cross-party support from the likes of Tory MSP and former Presiding Officer, Alex Fergusson; Tavish Scott MSP, the former Scottish Lib Dem leader; and Labour MSP Duncan MacNeill.

National Insurance, VAT and smaller levies like TV licences would be retained by Westminster, but most other taxes, including income tax and corporation tax, would be transferred to the Scottish Government. There would also be a geographic settlement of oil revenues.

As I wrote for Total Politics last October, lower taxes could be the making of Scotland, turning it into a kilted Asian tiger economy. Devo Plus offers this prospect, the chance of a new Scotland ‘on the make’, and the imposition of fiscal responsibility on Holyrood’s politicians, who in simple terms just spend other people’s money. Falling short of ‘devo max’, Devo Plus ought to look an attractive option for Conservatives in favour of local accountability and critical of the fiscal deficit between England and Scotland.

But what happened yesterday? The SNP quickly endorsed ‘devo plus’ as their preferred third option on the independence ballot paper. The nationalists’ conversion from ‘devo max’ to ‘devo plus’ was as speedy as it was cynical. But it has, for now, left opponents still treading water.

We have reports of the Scottish Tories being “at loggerheads” over the new campaign. Alex Fergusson hinted at a dangerous divide between Ms Davidson and many of her MSPs.

David McLetchie, the Scottish Tories’ constitution spokesman, called Devo Plus a distraction that is “playing into Alex Salmond’s hands”. This could not be further from the truth. Devo Plus may not end up being the right answer, but the Scottish Tory leadership should at the very least be trying to ask some questions.

Scots want more devolution. Ignoring this simple fact is what plays into Mr Salmond’s hands and perpetuates the assumption that the Conservative party is an English party, first and foremost. It amounts not so much to drawing lines in the sand, as sticking one’s head in it.

When the Prime Minister visited Edinburgh to make his powerful, emotional case for the Union, he promised greater devolution for Scots if they vote to stay. But in the process of publicly refuting the leader of his party in Scotland - “blurring the line in the sand”, according to Mr Fergusson - David Cameron failed to say what this greater devolution might look like.

It might, just might, look like Devo Plus.

A federal UK can save the Union

Alexander Pannett 11.15am

It is a strangely multilateral metaphor, the Union Jack.

It is one of the oldest flags in the world, formed from the constituent symbols of the United Kingdom, one of the first and arguably one of the most successful supra-national political unions in the world.

It is pure folly to reduce the number of MPs

Craig Prescott 11.58am

At the last general election, both coalition parties pledged to reduce the size of the House of Commons. The Conservatives offered a 10 per cent reduction (manifesto is oddly no longer available online), while the Lib Dems (link here) wanted to cut the number of MPs by 150. The eventual Coalition Agreement is actually weaker than both parties’ original pledges, as Parliament will only be trimmed by 50 MPs from its current level of 650.

This 600 figure was created by the negotiating teams during those ‘Five Days in May’. That episode revealed one of the worst aspects of our unwritten constitution: essentially, just six chaps in a room determined how many MPs will sit in the main chamber of our national legislature. In most other countries in the world the number of seats in the legislature is defined in a constitution - in the USA, each state is allocated two Senators - and the process of changing this is considerably more laborious than chatting over some tasty biscuits.

There is no underlying rationale for this reduction. For the Liberal Democrats it was part of a grander constitutional scheme, the only part of which that may emerge is House of Lords reform (but even this could be in difficulty).

For the Conservatives, the rationale is one of reducing cost both in line with ‘deficit reduction’ but also as part of the response to the MP’s expenses scandal.

Another justification, considerably more viable, is to equalise the number of constituencies. A fundamental principle is that each vote should count as equally as possible. However, it does not automatically follow from this that the number of MPs had to be reduced. Any party gain is likely to be minimal. Psephologists believe the bias against the Conservatives will be reduced, but only by 3 per cent.

As far as I can tell there has never been any serious consideration as to the optimal sum of MPs. There should have been some thought dedicated to this before committing to a final number, and it may well be the case that considerably more or fewer MPs would be needed.

My view is that Parliament would be better served by more rather than fewer MPs. The reduction of MPs will not be followed by a corresponding reduction in the number of Ministers (the ‘payroll vote’). This is a shame. Much has been made of the quality of the 2010 intake and the fact that MPs are more rebellious in this Parliament than at any point since 1945.

Furthermore, there have been procedural reforms to enhance the role of the backbench MP, in particular the creation of a Backbench Business Committee. Parliament matters again.

But fewer backbench MPs means fewer types of people being represented in Parliament, at a time when people are concerned (whether rightly or wrongly) about a so-called political class with little ‘real-world experience’ outside of Westminster. Reducing the number of MP’s does nothing to alter this perception. While expertise is often an argument against House of Lords reform, expertise is also provided by MPs in the commons. The current chamber comprises of the usual smattering of lawyers and businesspeople, but also doctors, academics and economists and former members of our armed forces.

On certain major issues such as the EU and human rights, it is groups of backbenchers rather than the leaderships of parties that tends more closely to represent the views of the electorate.

The ‘gene pool’ for Ministers is also reduced. This may have been one reason behind Gordon Brown’s ‘Government Of All the Talents’, as by the time he became Prime Minister, he had, to some extent, run out of suitable backbenchers.

Parliamentary committees could also be harmed. This is a growth area in MPs’ workloads, so it is inevitably going to be more difficult for the smaller number of MPs to fulfil their commitments in this area alongside all their other commitments without an increase in resources (which will hinder the overall intention to reduce the cost of politics).

The greatest irony in all of this is that should Scotland separate from the rest of the UK in in the forthcoming referendum (whenever that is held), the cost of politics in Westminster will be reduced at a stroke, and the opportunity to revisit constituencies would have emerged. Boundaries could then be equalised without any of the harmful side effects mentioned above.

Germany has the answer to Britain’s football finance mess

Sara Benwell 7.17am

It’s not often I get to combine two of my biggest passions in the same article, but football and finance are certainly worthy of more than a passing glance at the moment. Sadly, this is because football’s finances are in a mess.

Administration

In recent days, two big British clubs have gone into administration: Glasgow Rangers and Portsmouth, the latter for the second time in two years.  Rangers’ situation is particularly eye-grabbing, considering their size, history and prestige.The club entered administration with £9 million of taxes unpaid, and could face a bill of as much as £50 million pending the outcome of an upcoming court case.

Since 2004, thirteen clubs have gone into administration, such as Leeds United and Crystal Palace. In this instance, clubs are docked league points, but it is questionable whether the points deduction is an effective deterrent. While it is something of a financial professional foul, very few clubs hit liquidation and it is believed that some can opt for administration as a sound business move. It allows them to restructure their finances, to find a new owner and to eliminate existing debt. After which, the clubs can be in a position to borrow more money.

The downside is that once a club goes into administration, the appointed administrator must attempt to pay back any creditors as much money as possible.  This is achieved by selling off the club’s assets, including players, grounds, training pitches, merchandise and anything else that can be sold to raise funds. 

“Fit and proper persons”

In 2004, the Premier League, Football League and the FA introduced the ‘Fit and Proper Persons Test’, which must be passed by any director of a football club, or any owner of more than 30 per cent of a club’s shares.  It was introduced following concerns that anybody, even those who had been convicted of fraud, could take over football clubs.

The test means anybody with an unspent criminal conviction involving dishonesty, or who has run a football club into administration twice, cannot take over a club. Yet the test is could be seen as ineffective because it does not examine what plans potential owners may have for a club or whether they have sufficient funding.

The Fit and Proper Persons Test has been called into question in both the Rangers and the Portsmouth administration cases. Portsmouth’s owner Vladimir Antonov has been arrested on fraud charges (which he denies), eight months after the test cleared him. The Football League claims that Antonov tricked the test by supplying misleading or fraudulent information.

Rangers’ administration has also prompted an investigation by the SFA, because despite Craig Whyte’s being ruled “fit” to buy Rangers last year, it has since emerged that he did not inform the SFA that he was a previously disqualified company director.

Out of control expenditure

Clubs have spent millions on player transfers and most Premier League clubs are weighed down under heavy debts. Premier League clubs’ net debt in 2010 stood at £2.6 billion (Chelsea is currently the highest with £733 million). For more on this, see Nik’s Total Politics article last year about football’s debt problem.

UEFA Fair Play Rules

UEFA has issued its Financial Fair Play Rules, meaning that this financial year all European clubs must at least break even.

This seems already to be prompting some change as many experts put the 70 per cent fall in spending in the January transfer window down to clubs’ attempting to meet the UEFA requirements.  The biggest disclosed transfer this year was Papiss Demba Cisse’s £9 million move to Newcastle United - quite some drop from last years, when Chelsea paid £50 million for Fernando Torres and Liverpool paid £35 million for Andy Caroll. Blunt business, followed by even blunter shooting.

That said, the UEFA ruling could help reduce player fees but it will do nothing about rogue owners, and there is some concern that the ruling may lead to the clubs making the most money going unchallenged. In addition, the true impact will depend on how strictly it is enforced. How likely is UEFA to ban the likes of Barcelona from European football if their balance sheets don’t add up?

Salary Cap

One suggestion that has been made is a salary cap. It operates in rugby union, for instance, but how would this play out for British football? One serious concern is whether clubs could retain the best talent if British leagues went it alone.  A cap would only really work if it were implemented across the whole of Europe, which seems unlikely.

The German way…

One solution might be to operate a system that is closer to the German way of doing things, something Nik has brought up on these pages and elsewhere before. 

Under the German Bundesliga’s rules, no ‘outside’ investor can own more than 49 per cent of a club’s shares and at least 51 per cent must remain be owned club members. The Bundesliga has the lowest ticket prices and the highest average attendance of Europe’s five major leagues. It is also the only major domestic league whose clubs make a collective profit.

Another benefit of the way the German system is run is that the sport is more attractive to sponsors, particularly since games are free to air, and therefore  highly televised meaning that popularity remains high.  The German system remains closer to the fans, and decisions are made which honour both the sport and the spirit of the game.

The Conservative MP Elizabeth Truss had an op-ed in yesterday’s Times calling for us to “rebuild Britain’s economy the German way”. Maybe we should rebuild our ‘beautiful game’ their way too. At the moment at least, it is something to aspire to.

Follow Sara on Twitter @sarabenwell

Why stop at Mr Fred? The time has come for revenge for Darien.

Nik Darlington 9.08am

The Queen has annulled the knighthood of the former boss of the Royal Bank of Scotland, Fred Goodwin, following the advice of the Honours Forfeiture Committee.

This committee of senior Whitehall mandarins determines their verdicts according to whether an individual has broken the law and been imprisoned for three months or more, or if they have been censured or struck off by a relevant professional or other regulatory authority. Other “compelling evidence” can be considered if the honours system has been brought into disrepute.

Mr Goodwin has not been convicted of any crime. Nor has he, as far as I can see, been censured or struck off. He is a qualified chartered accountant, though the Institute of Chartered Accountants of Scotland has not taken away his CA. He is a Fellow of the Chartered Institute of Bankers of Scotland (FCIBS), the oldest professional banking institute in the world, and that accolade still stands.

So Mr Goodwin must return his ribbons for ulterior and “compelling” reasons. Here’s what the Forfeiture Committee had to say yesterday:

“The scale and the severity of the impact of his actions as chief executive officer of RBS made this an exceptional case.

In 2008 the Government had to provide £20bn of new equity to recapitalise RBS and ensure its survival and prevent the collapse of confidence in the British banking system. Subsequent increases in government capital have brought the total necessary injection of taxpayers’ money in RBS to £45.5bn.

Both the FSA and the Treasury select committee have investigated the reasons for this failure and its consequences.

They are clear that the failure of RBS played an important role in the financial crisis of 2008-09, which together with macroeconomic factors triggered the worst recession in the UK since the second world war and imposed significant direct costs on British taxpayers and businesses. Fred Goodwin was the dominant decision maker at RBS at the time.

In reaching this decision it was recognised that widespread concerns about Fred Goodwin’s decision meant that the retention of a knighthood for services to banking could not be sustained.”

In short, Mr Goodwin has had his knighthood stripped from him because he turned out to be catastrophically bad at his job.

Once upon a time, everyone thought he was fantastically good at his job. It’s why the previous Labour government gave him the gong in the first place.

What has since happened opens up the most magnificent realm of possibilities. I imagine that the perspicacious Forfeiture Committee will today have on their desks the compelling case of a former England rugby footballer who led his national side to an unprecedented World Cup victory in 2003, but who only two years later masterminded one of the greatest humiliations in the history of the British Lions.

Alas, you may think me frivolous to compare the Mr Goodwin’s ‘crimes’ with those of a mere rugby coach. And you might be right. So here’s a much better idea: a mad grievance I and perhaps many others have harboured for far longer than people have despised Fred the Shred.

You remember that old chestnut from Mark Twain, that history doesn’t repeat itself, but it rhymes?

In the 1690s, there was a Scottish banker called William Paterson who, aside from founding the Bank of England in 1694, came up with the swish money-spinning ruse of establishing a Scottish colony in Central America.

Paterson compiled a vast personal fortune from foreign trade, particularly with the West Indies. After giving the English government a ready creditor, he turned his sights on giving the Scottish government an empire - and lucrative American trade routes.

Paterson and his fellow financial adventurers settled upon Darien, on the Isthmus of Panama, as the site of the brave new Scottish colony. The Darien Company elicited great excitement in Scotland and, as many people ploughed savings into RBS at its height, so many Scots invested their savings in Darien. Indeed, Scots chucked approximately one-fifth of the nation’s wealth at the venture.

To cut a miserable tale short, the failure of the Darien scheme bankrupted Scotland. Though rightly debated as to the extent, it can’t be denied that this contributed to the loss of Scottish independence and Scots’ financial and political bail-out by the English in 1706 and 1707.

Sir William Paterson, now a knight of the realm, likely saw Union as a chance to resurrect his fortunes following Darien, and he was instrumental in the events leading up to 1707.

The careers of Fred Goodwin and Sir William Paterson are closely aligned. Both Scots, both bankers, both brought their countries to their knees because of inept financial decision making.

Except disgracefully one of those men still has his knighthood. Remove that false bauble, and let justice be done.

And in the absence of a living figure to immolate, we should publicly flog Paterson’s descendants through the streets of Edinburgh.

Sketch: Edward tells porky about railways in dull PMQs

Jack Blackburn 2.29pm

With Edward very much on the back foot, he needed to be able to claim something from the first PMQs of 2012. Given that, his tactics were baffling, even if it is fair to say that his performance skills showed signs of improvement.

It was notable that Edward had calmed down a bit and was less irritating than is habitual. He was more measured, less whiney, though he still had a righteous earnestness about himself that remains deeply irritating. Still, an improvement is an improvement.

The choice of questions was bizarre. The last two were about Scotland, on which he agrees with the Prime Minister, but the first four were about train fares. Now, I have spent a lot of time on trains. I think that the rise of fares is utterly extortionate. I would love to see it discussed more at the national level.

However, we didn’t get a discussion, so much as a squabble. Edward stood up and demanded to know why some fares had risen by almost 11 per cent. The Prime Minister said, clipped and curt, it was because the Labour government had given train companies the power to do so.

The remainder of the exchange on this topic can be neatly summarised thus:

Edward: No, we didn’t.

Dave: Yes, you did.

Edward: No, we didn’t.

Dave: Yes, you did.

Edward: No, we didn’t.

Dave: Yes, you did.

As you can imagine this was thrilling stuff. Edward didn’t make much of a point other than that excessive fares are bad and Dave didn’t say much more than it’s all Labour’s fault, which presumably he now says whenever he is in doubt, though, to be fair, in this instance, the House of Commons Library shows that he is correct. Furthermore, in 2009 the Labour government announced a cap in fares for 2009, not from 2009 (h/t Joe Murphy, Evening Standard).

It was a dreadfully dull PMQs, and Edward came out of the exchanges with nothing other than an agreement with the Prime Minister about Scotland. Hardly earth shattering.

While I applaud Mr Miliband for taking two of his questions out to discuss this important issue, thereby sacrificing two further opportunities to make political capital, I’m not sure that his political opponents within his own party will see it like that. He lives to fight another day, yet his tricky start to the year continues.

Follow Jack on Twitter @BlackburnJA