TOO LITTLE. TOO LATE.
Pig-ignorant Mackay is demanding much too little money and too late to save his job.
Mackay is demanding only the ability to rack up £1 billion of debt a year – that’s about 0.6% of Scottish GDP – peanuts, an insult to Scottish savers, most of whose savings would still be robbed blind by the UK.
We should be demanding the ability to rack up about £14 billion of debt a year – that’s about 8% of GDP – that’s proper government borrowing powers.
We should want NO overdraft limit whatsoever, only the yearly cap which can be borrowed every year indefinitely, with NO interest payments and NO repayment of the sums borrowed.
Pig-ignorant Mackay wants to pay interest and to repay the sums borrowed – pig ignorant about economics and how government borrowing works. Mackay thinks like a toon cooncillor who has to beg to borrow.
Mackay doesn’t want to govern like a government which is in charge of its own central bank and can borrow its own currency at will. That’s not a borrowing power that a toon cooncillor like Mackay would know what to do with.
Mackay is a pipsqueak of a Finance and Economy Secretary, completely out of his depth and he must be sacked for the good of the Scottish economy.
The bad deal Fiscal Framework Agreement
For years, the Scottish economy has been stagnant, with very weak growth because in 2016, the SNP made a bad deal with the UK which crushed the Scottish government’s powers to borrow money from the UK.
MSPs could have renounced the bad deal at any time. MSPs could have fought for a better £ deal with the UK, or set up a new Scottish currency and central bank to borrow from at will, but they didn’t. MSPs were too slow and too stupid and they took bad advice from a clueless university bureaucrat by the name of Anton Muscatelli, whom Glasgow University and the City of Glasgow would be miles better without.
So MSPs stuck with the bad deal which framed Holyrood budgets for austerity and weak growth, year after year. Scots suffered austerity but Sturgeon told lies and blamed only the UK for austerity when it was her signature on the bad deal. She had agreed with austerity in writing.
Finally, in September 2019, the penny finally dropped for one MSP – the new Scottish Labour leader Richard Leonard, who wrote an opinion piece in the Scotsman which criticised the SNP’s bad deal that Kezia Dugdale, the previous Scottish Labour leader never had the wits to disagree with. Dugdale resigned as Labour leader and an MSP to work for Muscatelli whose bad advice she is presumably still taking. Dugdale was an economically-ignorant celebrity and she got herself out of Holyrood!
“SNP have locked us into a bad deal” – Richard Leonard & Peter Dow agree.
John Swinney and Nicola Sturgeon have signed up to a bad financial settlement, says Richard Leonard, writing in the Scotsman on 24th September 2019. Peter Dow agrees and adds …
Richard is right. The SNP’s bad deal fiscal framework crushes the Scottish Parliament’s borrowing powers, framing Holyrood austerity budgets to fail the Scottish economy, making it all but impossible to deliver growth and prosperity for the people of Scotland, which is totally unacceptable to anyone who cares for Scots.
I’ve argued that a good deal fiscal framework would allow for Scottish government £ Sterling borrowing powers capped at no less than an average of 8% of Scottish GDP – about £14 billion per year – borrowed interest-free, with no repayments, the sums borrowed simply added to the Scottish national debt – in other words, macro-economic borrowing powers for Holyrood, akin to those of a sovereign government with its own central bank borrowing powers.
8% GDP is not unreasonable for government borrowing to fund its fiscal deficit and is about what the UK borrowed on average for the 5 years following the global financial crisis of 2008, which allowed the UK economy to grow strongly out of recession.
The UK could of course refuse such a good deal £ Sterling fiscal framework, if and when the Scottish government finally demand one such – in which case establishing a Scottish currency and Scottish central bank is the appropriate response for the Scottish Government and Parliament to take. There is no sign that Richard Leonard has reached nor crossed that particular bridge yet but he has come this far so one can but hope that he or the next Scottish Labour leader will get there one day.
See also – Financially brunette Kate Forbes
23rd June 2020: Alex Neil on Holyrood’s borrowing limits
“it is for the Scottish Government and the other devolved Governments in the UK to be able to borrow the money that will be needed for economic recovery directly from the Bank of England, and on exactly the same terms and conditions as the UK Government.
… Now is an opportunity for the UK Government to give the Scottish Government the same borrowing powers. That would mean, like the UK Government, paying no interest; having no timescale for re-payment, like the UK Government; and having the power to write off loans from the Bank of England, as the UK Government already did with money that it borrowed for the recession. That is where the money should come from. … Throw the fiscal framework out the window. It is no longer fit for purpose. Give us some real short-term powers that we can use to save the Scottish economy.”
– Alex Neil MSP, Scottish Parliament, 23rd June 2020
Finally, a repudiation of the bad deal fiscal framework from an SNP MSP – Alex Neil speaking like a true economist. 🙂