Scots should forget about flying the flag and fix their nation

Holyrood has enough power and money to stop economic decline north of the border, says Neil O'Brien.

 

Published: 10:35PM BST 13 Jul 2010

 

Holyrood has enough power and money to stop economic decline north of the border, says Neil O'Brien. Photo: David Cheskin/PA Wire

Scotland has become a stag-nation. Over the past decade, its economy, which was already struggling, has fallen further behind the rest of the UK’s: if it had kept up with the average, it would be 5 per cent bigger. Public services have suffered, too. Education, which used to be its pride and joy, has been left to rust. Scotland opted out of reforms like the academies programme, with the result that the proportion of secondary pupils getting good grades has increased by just 1 per cent, against 8 per cent in England. In health, waiting times have remained static, despite falling by two thirds down south.

The problem isn’t a lack of funds: state spending as a share of the economy is about 12 per cent higher. The truth is that Scottish taxpayers are getting less for more. Sadly, instead of addressing these issues, the political class is locked in an unending constitutional wrangle about the details of devolution.

The answer to all Scotland’s problems, some claim, is more constitutional change. But politicians have all the powers they need. The Scottish Parliament controls 61 per cent of public spending, equivalent to 29 per cent of GDP. The Scottish Executive has de facto control over a range of taxes, not just the power to vary income tax by 3p – in fact, it has far more latitude to increase or decrease taxation than it is ever likely to wish to use.

Holyrood has unlimited leeway to reform public services, including health and education. It has powerful tools to accelerate economic growth: it controls higher and further education, the planning system, and finance for transport and infrastructure. Thanks to public-private partnerships, it can borrow vast amounts.

The other great distraction is the Barnett Formula, which nationalists on both side of the border will happily bore you to death about. To cut a long story short, the reason why Scotland’s funding has been kept so high is now based on politics, not poverty.

At heart, Barnett – which is under review – is about Scotland getting its oil revenue back. Although the Exchequer’s income from the North Sea has fluctuated, it has, on average, approximated to the Barnett “premium”. Public spending in Scotland is some £12.3 billion higher than taxation – but the Scottish element of oil revenues comes to £11.8 billion. In effect, Scotland gets back every penny (and more) of its oil money, and in a form that does not fluctuate with oil prices.

So if it isn’t a lack of power or money that is causing Scotland’s problems, what is to blame? As Tom Miers points out in a Policy Exchange report, published today, there is a conspiracy of inaction at work. The Nationalists have a powerful motive to avoid economic or social reform, because it strengthens the case for constitutional change. For the architects of devolution, including many in the Labour Party, the Scottish Parliament was designed to insulate Scotland from reforms instigated by the government in London. Meanwhile, those who opposed devolution want to remain engaged in Scotland, and are reluctant to rock the boat by suggesting a new approach.

This inaction is encouraged by hostility to Westminster’s reforms, which are rejected as Thatcherite, even if implemented by Labour. Ideas that originate in much-admired nations such as Sweden are abhorred if they gain credence in England, as happened with free schools.

I supported devolution, and still do. But it hasn’t led to the changes I hoped. We need to draw a line under the debate by implementing the proposals of the Calman Commission, which emphasised Scotland’s existing powers rather than advocating a significant extension. Then the focus can move to what to do about the real problems.

One idea would be to channel some Barnett money into job-creating tax cuts, rather than using it to increase spending, But that will never happen until we break the political deadlock holding Scotland back. Many Scots have centre-Right attitudes, but the Scottish Conservatives only won a single seat. Labour’s election broadcasts – with their dated attacks on Thatcherism and grainy footage of the poll tax riots – were a reminder of just what a ball and chain the word “Conservative” still is in Scotland.

The only conclusion is that Edinburgh needs a new centre-Right force, and that Scotland’s political class need to be sent a powerful message: stop blethering, and get on with it.

Neil O’Brien is the director of Policy Exchange. 'The Devolution Distraction’ by Tom Miers is published on July 14th.

The modern business plan

It's not clear to me why business plans are the way they are, but they're often misused to obfuscate, bore and show an ability to comply with expectations. If I want the real truth about a business and where it's going, I'd rather see something else. I'd divide the modern business plan into five sections:

• Truth
• Assertions
• Alternatives
• People
• Money

The truth section describes the world as it is. Footnote if you want to, but tell me about the market you are entering, the needs that already exist, the competitors in your space, technology standards, the way others have succeeded and failed in the past. The more specific the better. The more ground knowledge the better. The more visceral the stories, the better. The point of this section is to be sure that you're clear about the way you see the world, and that you and I agree on your assumptions. This section isn't partisan, it takes no positions, it just states how things are.

Truth can take as long as you need to tell it. It can include spreadsheets, market share analysis and anything I need to know about how the world works.

The assertions section is your chance to describe how you're going to change things. We will do X, and then Y will happen. We will build Z with this much money in this much time. We will present Q to the market and the market will respond by taking this action.

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you're going to do and what impact it's going to have.

Of course, this section will be incorrect. You will make assertions that won't pan out. You'll miss budgets and deadlines and sales. So the alternatives section tells me what you'll do if that happens. How much flexibility does your product or team have? If your assertions don't pan out, is it over?

The people section rightly highlights the key element... who is on your team, who is going to join your team. 'Who' doesn't mean their resume, who means their attitudes and abilities and track record in shipping.

And the last section is all about money. How much do you need, how will you spend it, what does cash flow look like, P&Ls, balance sheets, margins and exit strategies.

Your local VC might not like this format, but I'm betting it will help your team think through the hard issues more clearly.

Statin benefits outweigh risks despite side effects, BHF says
25 May 2010
A study published in the British Medical Journal has linked the use of statins with some pretty serious side effects, but experts at the British Heart Foundation stress that the benefit of these drugs still outweighs their risks.

Millions of people in the UK regularly take statin drugs to reduce levels of cholesterol and thereby help prevent the onset of cardiovascular disease, which remains the number one cause of premature death in the country.

Under current guidelines in the UK, doctors should be prescribing statins to anyone with a 20% or greater chance of having a heart attack or stroke in the next decade, and as health policy increasingly strives to embed a culture of disease prevention in the country, the number of prescriptions in looks set to grow considerably.

However, while confirming their health benefits, a study by researchers from Nottingham University found that the use of statins, particularly at higher doses, is linked with the development to some serious conditions, such as moderate or serious liver dysfunction, acute kidney failure, moderate or serious myopathy, and cataracts.

Echoing the findings of previous studies, the researchers found that these side effects were similar across the range of statins on the market for most outcomes except liver dysfunction, where fluvastatin was found to be linked with the highest risk.

On the flip side, their research also showed no significant correlation between statin therapy and an increased risk of other serious conditions including Parkinson's disease, rheumatoid arthritis, dementia and several cancers.

'Small minority'
The BHF was quick to stress that only “a small minority” of people experience serious side effects. June Davison, cardiac nurse at the charity, said: “We already know that a small number of people taking statins experience unwanted side effects. However for people with, or at high risk of heart disease, the benefits of statins far outweigh this risk”.

The researchers have called for additional studies to “develop utilities to individualise the risks so that patients at highest risk of adverse events can be monitored closely”, and claim findings from their own analysis may be used to inform guidelines on which type of statin to use and at what dose.

Higher risks of liver dysfunction, kidney failure, and potentially myopathy were dose related and, particularly as liver dysfunction is common and the other two are potentially fatal, “the findings would tend to support a policy of using lower doses of statins in people at high risk of the adverse event”, they conclude.

16 questions for free agents

If you're starting out as an entrepreneur or a freelancer or a project manager, the most important choice you'll make is: what to do? As in the answer to the question, "what do you do?"

Some questions to help you get started:

1. Who are you trying to please?
2. Are you trying to make a living, make a difference, or leave a legacy?
3. How will the world be different when you've succeeded?
4. Is it more important to add new customers or to increase your interactions with existing ones?
5. Do you want a team? How big? (I know, that's two questions)
6. Would you rather have an open-ended project that's never done, or one where you hit natural end points? (How high is high enough?)
7. Are you prepared to actively sell your stuff, or are you expecting that buyers will walk in the door and ask for it?
8. Which: to invent a category or to be just like Bob/Sue, but better?
9. If you take someone else's investment, are you prepared to sell out to pay it back?
10. Are you done personally growing, or is this project going to force you to change and develop yourself?
11. Choose: teach and lead and challenge your customers, or do what they ask...
12. How long can you wait before it feels as though you're succeeding?
13. Is perfect important? (Do you feel the need to fail privately, not in public?)
14. Do you want your customers to know each other (a tribe) or is it better they be anonymous and separate?
15. How close to failure, wipe out and humiliation are you willing to fly? (And while we're on the topic, how open to criticism are you willing to be?)
16. What does busy look like?

In my experience, people skip all of these questions and ask instead: "What can I do that will be sure to work?" The problem, of course, is that there is no sure, and even worse, that you and I have no agreement at all on what it means for something to work.

Pressure for the Scottish Parliament to be given greater tax-raising powers is growing, campaigners claimed today, as a clear split opened up between supporters and opponents of fiscal autonomy.

As a group of leading business figures prepared to launch a campaign for “fiscal responsibility”, CBI Scotland challenged their figures, urging them to present a more detailed case for change. Iain McMillan, director of CBI Scotland, said that giving Holyrood more tax powers would “fragment” the UK system and could cost Scottish businesses more, rather than less.

But Geoff Mawdsley, director of Reform Scotland, the think-tank coordinating the campaign, said that an article in today’s Times on the campaign had “stirred up a lot of interest”.

The campaign is launched on Thursday at an event in Edinburgh where Jim McColl, chairman of Clyde Blowers, one of Scotland’s biggest manufacturing companies, will argue that Holyrood have more responsibility for raising the tax revenues it spends.

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Writing in The Times, he says: “Financial responsibility focuses the energy of political leaders as a healthy economy will provide a firm basis for public spending, protecting valued public services. Scotland will then have the incentive and the levers to make the country a better place to do business — promoting both indigenous companies and inward investment.”

Mr McMillan questioned whether fiscal autonomy — Scottish control of taxes and spending — would have such beneficial results. Mr McMillan was a member of the Calman Commission which investigated ways to give Holyrood more fiscal autonomy.

Its main proposal was for the UK Government to cut the rate of income tax by 10p across all bands and allow Holyrood to vote on whether to impose the 10p difference or vary it upwards or downwards.

Several leading business figures now think that this plan is flawed and that the answer is to go much further in devolving control of more taxes from London to Edinburgh.

But, Mr McMillan said: “Fiscal autonomy means that the UK’s unitary tax system would become fragmented and businesses’ compliance costs would increase as a result. Scotland’s tax income would in future need to cover all our expenditure, which currently it does not.

“The interest on our share of the UK’s national debt, including the extra debt incurred in supporting two of Scotland’s major banks, would need to be funded and the debt reduced over time. The current wider pooling of these costs and risks across the UK would end.”

The coalition Government backs the implementation of the commission’s proposals and government sources made it clear yesterday that ministers see Calman as the framework which they will work within, rather than creating something different.

The Tories are reluctant to see more devolution to Holyrood, beyond what has been agreed by the commission. A senior Conservative source said: “It won’t be Calman-minus, but Calman-plus could be very, very similar to what we have now.”

There is also strong opposition to anything more than Calman inside the Treasury. One insider said: “The Lib Dems haven’t come up against the Treasury yet. There are very good and clear reasons why the Treasury will not go further than Calman — they certainly won’t go for fiscal autonomy.”

Update – I wrote this piece last evening in blind rage at the dastardly deed Brown was trying to pull off with his partners in crime – Mandleson, Adonis, Balls and Campbell. He would have been stopped ultimately by the British people. As it was he was stopped by some principled members of the Labour party. They’d obviously figured out the scheme wouldn’t work and the Labour party would never be forgiven for implementing some strategy they learned from Mugabe. So perhaps they live to fight another day.

Except they won’t. Its just been announced Conservative and Liberal Democrat parties have agreed on a full coalition which will assure the United Kingdom of a creditable market focused social democracy.

It’s excellent news for all of us, and probably good news for the whole of Europe. And we’ve seen the last of Labour as well.

Now Cameron and Clegg need to get on with reducing the deficit by making public services cost effective. I think the country is really going to like this, fingers crossed.

Break out the bubbly.

Since way before Gordon Brown took over as British Prime Minister everybody I know recognised him for the parsimonious, self serving social elitist he is.

We all thought Blair was playing the long game, making such a mess of the country that Brown would never be elected – the ultimate unelected politician would go down in history as the joke he is.

Now it seems Brown is having a laugh at Blair, and selling our democracy down the river in the process. His deathbed conversion to electoral reform is born out of desperation – not to continue his efforts in consigning us to subservience but to foist on us his student, the immensely unpleasant Balls.

Balls will never get elected in this country either. The acrid stench of Brown’s hubris follows him everywhere he goes. So Brown offers to fit up the country by ceding to every demand the marginals – LibDems, SNP, the Welsh and the Ulstermen, just so he can stay in power long enough for Balls to be selected as Labour Party leader, and Prime Minister by default.

In the election none of the issues pursued by any of these leaches were relevant. The British people, and more particularly the English, didn’t vote for the croneyism they’re going to get if Brown has his way. But they’re about to fitted up like kippers.

So just because Brown wants Balls to get the top job he’s prepared to ruin our democracy, giving proportional representation to the party of misfits and cast in stone the continuing subsidy of the welfare dependent regions.

For the last 13 years Britain has been in the grip of the unctious Central Belt Scots – even Blair would never have been elected on purely English votes. But this is much worse.

If Clegg is sufficiently irresponsible to go along with the game we’ll have the most disastrous government in our history, which in any case won’t last. But in the meantime the markets will decide Britain is a bad place to put their money, at a time when our debt is the biggest its ever been.

Maybe we should rejoice. This will be such a disaster both the Labour Party and the LibDems will banished from our political scene forever.

Unfortunately our economy will descend to Zimbabwe levels in the process. We’ll all be screwed.

Whoever would have thought the nation which gave the world constitution and democracy could be reduced to this.

Time to move to America. At least the politicians there are honest crooks.

 

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For many years, coffee was considered a vice, linked with sleepless nights and cigarettes. But scientists have discovered that coffee contains potent antioxidants that can fight numerous ailments, including heart disease and diabetes. According to the American Coffee Association, 54 percent of Americans drink coffee on a daily basis, and they drink, on average, over three cups each.

Most studies examined the effects of caffeinated coffee. When decaffeinated coffee was included, the benefits were usually reduced.

The diseases coffee can benefit include:

• Dementia. Drinking moderate amounts of coffee during middle age — classified as three to five cups daily — can decrease the risk of dementia by 65 percent, according to a 2009 study by Swedish and Finnish researchers.

• Liver disease. In those who drink too much alcohol, those who drank the most coffee — more than four cups every day — reduced their risk of developing alcoholic cirrhosis by 80 percent.

• Heart disease. Research associated with The Nurses' Health Study found that women who drank two to three cups of coffee daily had a 25 percent lower risk of dying from heart disease. Along the same line, a Spanish study found that men who drank more than five cups of coffee each day lowered their risk of dying from heart disease by 44 percent, and that women who drank four to five cups each day reduced their risk by 34 percent.

• Prostate cancer. A recent study from Harvard Medical School found that men who drank the most coffee slashed their risk of developing the fastest growing and most difficult to treat prostate cancers by more than half when compared to men who drank no coffee.

• Gout. Drinking four or more cups of coffee each day dramatically reduces the incidence of gout, say U.S. and Canadian researchers. Men who drank four to five cups daily lowered their risk by 40 percent, and those who drank six or more cups daily reduced their risk of developing gout by 59 percent when compared to men who didn't drink coffee.

• Breast cancer. Coffee can either reduce the risk of developing breast cancer or delay its onset, according to Swedish studies. They found that coffee alters a woman's metabolism and produces a safer balance of estrogens. Women who drank two to three cups of coffee a day reduced their cancer risk by as much as two-thirds, depending on the specific type of breast cancer.

• Diabetes. Enjoying six or more cups of coffee daily can cut chances of Type 2 diabetes by 54 percent in men and 30 percent in women over those who don't drink coffee.

• Parkinson's disease. Several studies show that drinking coffee lowers a man's risk of developing Parkinson's up to 80 percent — and the more the better.

• Colon cancer. A Japanese report found that women who drank three or more cups of coffee every day slashed their risk of developing colon cancer in half.

What's responsible for coffee's healthy benefits? Most researchers believe it's the antioxidants (polyphenols or flavonoids) in coffee, but there are hundreds of compounds in coffee that may be partially responsible.