My Way Code

THE First Minister's use of the Ministerial Code has been much in the news since the New Year.

But overlooked - until now - has been a 630-page document dump by the Scottish Government on the topic just before Christmas.

Containing background memos on the Code's composition, it was released after a request under Freedom of Information.

Rather than subjecting the FM to rigorous examination, the material shows the Code has in fact been crafted to help him pick and choose when he is investigated - or whether he is investigated at all.

Here's the story

EXCLUSIVE

Tom Gordon

Paul Hutcheon

ALEX Salmond is facing demands for a judge to oversee his behaviour in office, after it emerged the Ministerial Code of Conduct had been kept deliberately vague to help the First Minister choose whether to investigate himself.

A previously secret government memo reveals that details of the investigative process, including the types of alleged misconduct to be checked, were “intentionally not included on the face of the code” to ensure the First Minister could “exercise his own judgement” in each case.

Keeping the process opaque was “also intended to limit the number of spurious complains from third parties,” according to the document.

Opposition parties said the memo exposed the code as a sham which allowed Salmond act as “judge and jury” in his own investigations.

At present, Salmond alone decides whether or not to refer himself to one or more handpicked “independent advisers” on the code if there is an allegation of misconduct against him.

He has referred himself six times since March 2009, and been cleared in every case, the most recent of which was published on January 10.

In the latest instance, Sir David Bell cleared Salmond of breaching the code after he appeared to say on TV last year that the SNP government had specific advice from its law officers on the position of an independent Scotland in the EU.

It later turned out that no such advice existed.

Salmond’s comments were “muddled and potentially confusing”, but did not amount to a breach of the Miinsterial Code, Sir David concluded.

He also recommended that the section of the code covering legal advice should be made clearer.

Now there is evidence that, rather then imposing oversight on the First Minister, the Code has in fact been tailored to help him avoid scrutiny if he chooses. 

Buried among 630 pages of background information on the code released by the Scottish Government just before Christmas is a memo to the First Minister making the point explicitly.

Marked “restricted”, it was written by Robin Benn of the Cabinet and Corporate Business Secretariat on 11 June 2011, and addressed to Salmond and his then Parliamentary Business Manager Bruce Crawford. 

At the time, the code was being updated for the start of the new parliament.

That's handy... how the Ministerial Code intentionally leaves bits out

Referring to the independent advisers, Benn wrote: “You will also recall that details of the process whereby the First Minister will refer matters to the independent advisers (and the types of issues that he may consider it appropriate to pass to them for consideration) were intentionally not included on the face of the Code itself.”

The word “not” was emphasised in bold type.

Benn went on: “We have retained this principle, which should ensure that the First Minister has the appropriate opportunity to exercise his own judgement [sic] on a case-by-case basis, and is also intended to limit the numer of suprious complaints from third parties.”

The full memo is available here (press the 100% icon top left). 

Scottish LibDem leader Willie Rennie said: “These documents prove that accountability of the First Minister within government has become a sham.

“The First Minister has been personally involved in drawing up the code by which is he is judged, and then deciding which cases he’ll refer himself to his hand picked jury. This kind of sinister scheming turns people off politics.”

First Minister: Not guilty again

Labour MSP Paul Martin said: “This makes further mockery of the Ministerial Code. Not only does the First Minister decide the judges, he also gets to decide if he gets charged and what with. It is now in everyone’s interests to overhaul this system and have it policed by an independent judge that we can all have faith in.”

A spokesman for the First Minister said: “This First Minister is the first person holding the office to establish an independent panel to investigate complaints – when Labour and LibDem members held the post they thought it was right to investigate themselves. It is absolutely right that the ministerial code should not give carte blanche to endless, spurious and politically-motivated complaints against the First Minister or any other minister.”

Lucrative modelling contract

There's another 'SNP assertions' row brewing, this time on the big basic stuff of whether the economy would be better or not after independence.
The Scottish Government naturally say it would be better, given all those famous levers they could pull.
But economies don't go up or down at the flick of a switch.
They're way more complex than that, and so you need a pretty sophisticated computer model to see what the effect of any lever-pulling would be.
And it turns out the Scottish Government doesn't have a computer model that's up to the task, raising questions about the credibility of its forecasts.
  
Here's a longer version of the story in today's Herald

EXCLUSIVE

Tom Gordon

 

ALEX Salmond’s predictions of a healthy economy after independence have been called into doubt, after it emerged the SNP government lacks the software for forecasting how Scotland’s finances would behave outside the UK.

The Herald can reveal that ministers are only now purchasing a £200,000 “macroeconomic forecast model” to cover a range of scenarios after a Yes vote, including the impact of “economic shocks”.

It will analyse a complex web of interacting forces, including household income, government spending, taxes, labour markets, and north sea oil and gas production to “assist in the development of economic policy”.

The deadline for firms bidding for the job closes this week, however the model is not expected to be fully operational until 2014, the same year as the independence referendum, and after publication of the government’s white paper on independence in November.

Opposition parties last night claimed the SNP, whose central case for independence is a healthier economy, had again been making assertions without the facts to back them up.

The First Minister says an independent Scotland would have the sixth highest per capita Gross Domestic Product in the developed world.

Finance Secretary John Swinney also said recently that a 3% corporation tax cut would support 27,000 jobs, that VAT changes could help tourism, that tax credits could see “a step change” in Research & Development, while “targeted interventions” could attract international investment.

But the current Government software is simply unable to predict how such changes would ripple through the wider, or macro, economy.

Before...

The software even appears unable to model the impact of the limited changes to income tax arising from the 2012 Scotland Act.

In August, the First Minister’s Fiscal Commission Working Group, which includes Nobel prize winning economist Joseph Stiglitz, raised the need for a better model and better input data as part of its work on a “fiscal framework” for independence.

Three months later, ministers issued a tender notice for a new computer model to cover the “Scottish macro economy, its linkages with the rest of the UK and the rest of the world”.

Recent thinktank reports have suggested the Scottish economy could be less robust than previously thought after independence, largely due to declining income from north sea oil.

The Institute for Fiscal Studies has warned that in the medium term an independent Scotland would face a “bigger fiscal adjustment” than the rest of the UK, if oil incomes fell.

Last month, the Centre for Public Policy for Regions at Glasgow University said lower north sea revenue implied Scotland would be in a worse fiscal position than the UK from 2015 onwards.

Labour finance spokesman Ken Macintosh said: “I’m not surprised the SNP have been making sweeping generalisations about the economy based on nothing other than Alex Salmond’s convictions.

“But that’s no basis for anything, let alone a country taking a decision about independence.”

Tory finance spokesman Gavin Brown said: “Like many of the independence arguments, it seems the SNP’s predictions on the economy could unravel.

“It also appears this complex work will not be complete until after the white paper, raising questions about

what that will be based on.”



... After

A spokesman for the pro-Union Better Together campaign joked that the SNP seemed to have made its rosy economic predictions using “a ZX Spectrum gathering dust in St Andrew’s House”.

He said: “Unfortunately for the nationalists, this new, undoubtedly expensive, system will not be up and running until after the publication of the white paper, which means that everything that it says about an separate Scotland’s economy will be nothing more than wishful thinking.”

 

A government spokesman said: “As we move to implement the taxation responsibilities in the Scotland Act, future Scottish budgets will depend to a much greater extent on tax revenues raised in Scotland.

"This contract will support the development of the in-house analytical capacity needed to meet these new responsibilities, and fulfils regular requests from stakeholders for a formal forecasting model to provide a view on the future outlook for the Scottish economy and to better inform policy.”

Chicago, Chicago..

13 December 2012

One of my old tales was raised at First Minister's Questions today, when Labour MSP Ken Macintosh asked Alex Salmond if he was still in favour of a fiscal stability pact if Scotland becomes independent and keeps the pound.

Macintosh referred to a speech Salmond had given in Chicago in September in which he appeared to U-turn on his previous desire for such a pact.

I reported on the comments in the Sunday Herald, and also blogged on the subject.

Today, Salmond said he said "no such thing in Chicago".

The First Minister: I said no such thing in Chicago. I pointed out that, if we look at the Government expenditure and revenue Scotland figures and have a borrowing limit arrangement with the Bank of England and the Treasury in that year, we would be £2.7 billion relatively better off than the UK fiscal position—the Institute of Fiscal Studies has confirmed that point in recent weeks.

Macintosh then raised a point of order and read out Salmond's quote in full:

Ken Macintosh (Eastwood) (Lab): On a point of order, Presiding Officer. I am sure that none of us wants to drag the First Minister back here at the end of the day to correct himself, so I offer him an opportunity to do so here and now.
In response to my question earlier, the First Minister did not say whether he supported a fiscal stability pact or otherwise, but he specifically said that my quote was incorrect, saying that he said no such thing in Chicago. The full quote from Mr Salmond reads:
"I don’t believe that a monetary policy restriction would have to have a fiscal stabilisation pact. I think we can have plenty of room for manoeuvre within a currency union."
Those words are as quoted by Tom Gordon in the Sunday Herald on 30 September. Through your offices, Presiding Officer, I ask whether the First Minister made such a statement.

The Presiding Officer: Mr Macintosh well knows that that is a matter not for me, but for the First Minister.

After listening to the audio recording, Macintosh returned to the subject at 5pm and said that the Sunday Herald report was accurate.

Salmond said I had missed out a sentence.

The First Minister (Alex Salmond): Perhaps I can help with my weekly affirmation—which is what I am going to do from now on with nonsensical points of order. Tom Gordon’s report missed out a sentence. [Interruption
.]
The Presiding Officer: Order.
The First Minister: The point that I made in Chicago was that, in the context of a borrowing arrangement, Scotland would have a £2.7 billion relative surplus compared to the rest of the UK—£500 a head for every man, woman and child in the country. That is exactly the point that I made to Mr Macintosh at First Minister’s question time.

The First Minister is right. I did leave out a sentence in which he referred back to one of his earlier points about £2.7bn. I left it out because it refers to Scotland's relative fiscal strength to the UK, not the monetary union which was the subject of the question and the rest of the answer. It does not alter what was said about a fiscal stabilisation pact (or lack of one) for a sterling zone.

It was striking today that the FM never actually got round to answering Macintosh's question on whether he still wanted a pact or not.

In the interests of completeness, here's the full Chicago quote, with the quotes I used in bold.

Salmond is asked about currency union and whether there could be a repeat of Eurozone woes.

Referring to a putative sterling zone, Salmond asks rhetotically:

Is that the same as the euro? No. The euro’s central difficulty it that it embraces a substantial number of countries with radically different productivity levels, everything from the Ruhr valley to the southern tip of Greece - you know, dramatic difference and divergence in productivity, which is the euro’s central difficulty. Maybe by 40, 50% difference in manufacturing productivity.
"We don’t have that differential between Scotland and England. That’s why it’s an optimal currency and why it’s not the euro.
"Does it inhibit or restrict your ability to pursue an independent economic policy?
"Well obviously in economics, in politics, in life, no country is independent totally, you’re inter-dependent within a context, but it does still give you control of fiscal policy, which has a primacy in my opinion.
"As I was mentioning earlier, the people who said no taxation without representation knew what they were talking about, and control of fiscal policy strikes me at the heart of economic independence.
"We currently control 10%, we will control 15% in the next couple of years.
"That’s not independence. With independence we’d control 100% of the taxation base of Scotland.
"That’s independence in economic terms.
"Restriction in terms.. I don’t believe that a monetary policy restriction would have to have a fiscal stabilisation pact.
"As I’ve just mentioned, if we’d had that last year we’d have been able to deploy 2.7 billion of resources, either to lower borrowing or increase capital spending.
"So I think we can have plenty of room for manouevre within a currency union, and I think using sterling is, on balance, of benefit to both countries.
"Why, incidentally, should England agree?You [the questioner] mentioned it’s our major competitor. We prefer to see it as our friend and neighbour and major market place, but, of course Scotland is a major maket place for England.
"But why should the Westminster government agree to it? Well, it is true when Scotland becomes independent that we’ll have title to our natural resources as any other independent country has - oil and gas revenue - but of course oil and gas impact on the UK economy is not just as direct revenue to government, it’s also the protection that oil and gas provide to sterling, and that amounts to something like thirty thousand million pounds a year protection to the balance of payments. So my view on that would be that any sensible Westminster government would bite our hands off to keep that protection of sterling in the international market place.
"So I think it suits both countries, it’s a positive proposition looking for cooperation and agreement."