The TaxPayers' Alliance - Burning our Money

Non-job of the week

Another Wednesday, another crop of new jobs in the Society Guardian, and it appears that ‘diversity’ is very much the word of the week.

Peterborough prison service are hiring for a Diversity Manager to keep its staff up to date on the full-range of politically correct dos-and-don’ts with a salary range that stretches as high as £44,894. Is this really the most pressing need facing our prison system in the circumstances? It certainly seems a questionable use of valuable resources.

Winning this week’s non-job though is being recruited for an unnamed South East council:

"Gypsy & Traveller Liaison Officer – South East   
Up to £15 per hour

Community Safety Skills currently require an experienced Antisocial Behaviour/ex Police Officer to cover a contract for a busy South East based local authority. The position is for an Gypsy & Traveller Liaison Officer.
The post holder will be responsible for ensuring the smooth co-ordination of a wide range of Council responsibilities spread over different services. They will therefore need to develop strong links with resource-holders in directorates in order to succeed in delivering these responsibilities, and will not be able to deliver the required outcomes alone.

Specific requirements are to:
1. Secure the recovery of Council-owned land from unauthorised encampment by Gypsy & Travellers by:
• Implementing the Council’s protocol on unauthorised encampments, including coordinating the work of various Council services and external agencies such as Thames Valley Police, the Primary Care Trust, etc
• Receiving, recording and responding to reports/complaints from residents/businesses/councillors/MPs/other agencies/council officers etc of potential and actual unauthorised encampments
• Ensuring that all illegal encampments are administered in accordance with due process of the law and in conformity with government guidance
• Visiting unauthorised encampments to establish and maintain contact with Gypsy & Traveller households, and to notify them that their presence on the land will not be tolerated
• Identifying and assessing (or commissioning the assessment of) the health, welfare and educational needs of any vulnerable members of those households
• Ensuring that Gypsies & Traveller households are directed towards appropriate health, welfare and educational services as required, and/or that such help is directed to them as required
• Ensuring that Gypsies & Travellers understand and respect the rights of Reading’s permanent residents and businesses
• Ensuring that Reading’s permanent residents and businesses understand and respect the rights of Gypsies & Travellers
• Ensuring that residents/businesses/councillors/MPs/other agencies/council officers are kept informed of actions to end problems arising from unauthorised encampments and recover possession of the land
• Gathering and evaluating evidence to support legal action by the Council to recover possession of its land
• Recommending to the Head of Legal Services (or other authorised officer of the Council) the earliest possible point at which Court proceedings may be begun with a positive expectation of success, taking into account all relevant evidence
• Enforcing the subsequent eviction of Gypsy and Traveller households as necessary
• Arranging for vacated land to be cleared and re-secured as necessary
2. Monitor and review the effectiveness of the Unauthorised Encampment protocol, and develop it as necessary
3. Protect Council-owned land from unauthorised encampment by advising on, and arranging for, suitable security measures to be taken
4. Liaise with other relevant authorities on all matters relating to Gypsies & Travellers, including (but not limited to) unauthorised encampments.
5. Advise private land-owners of their rights and obligations in respect of the eviction of Gypsies & Travellers
6. Advise officers and Members on all legislation and best practice relating to Gypsies & Travellers
7. Contribute significantly to the development and implementation of a Gypsies & Travellers Strategy"
   
And so the proliferation of demographic-specific local authority posts continues at a cost to taxpayers...

No Serious Economist Thinks

This morning Guardian columnist Polly Toynbee was on BBC R4 Today with the economist Ruth Lea. They were discussing the question of government debt and whether the UK might lose its AAA credit rating.

According to Polly Toynbee, the risks have been hugely exaggerated by the City and their groupthink apologists. She says:

"No serious economist thinks Britain will default on its debt."

Well now, let's just think about that for ourselves.

First off, we need to be clear about the meaning of default. When a modern government issues debt denominated in its own currency, it is highly unlikely to default in the sense of failing to pay the interest and principal as denominated in that currency. Why should it, when it can simply run the printing press to manufacture the readies it requires?

The default that matters on such debt is default via inflation - ie the government repays, but in devalued currency. Which is precisely the way our government defaulted last time round.

Another way of putting it is to say that, in reality, a major government issuing debt in its own currency is never going to be less than AAA credit quality. But that isn't the important point: if the currency stinks, international bond investors will not want to hold the government's debt however high its formal credit rating.

So in terms of the government's borrowing in the sterling bond market (gilts), what matters more than anything is whether the market is confident that UK inflation will remain low and sterling will maintain its value.

And we all know what happens when that confidence goes. The 1970s showed us precisely: gilt yields soar (to over 17% in 1975), sterling plunges (to near-parity with the US dollar in 1976), and we all get poorer. Even though in the 1970s HMG never actually lost its formal AAA credit rating.

However, where the formal credit rating becomes absolutely vital is with government borrowing in foreign currencies. And that's for the very simple reason that domestic governments do not have access to the foreign currency printing press: they cannot just print more to pay off their debt obligations. Outright default - or "rescheduling" as it's known in polite circles - becomes a real possibility.

Which is why the weaker members of the Eurozone such as Greece are now facing a funding crisis. They have done their borrowing in Euros, which for them is effectively a foreign currency - the vital printing press is controlled by the Franco-German alliance. Greece's credit rating has just been cut to BBB+ - just three notches above junk - and their debt interest cost is now over 2% pa higher than Germany's.

Some people argue that's not a problem for us, because HMG borrows in sterling not foreign currency.

Unfortunately, while that's true for the vast bulk of our £0.8 trillion official government debt, the bank bail-outs have transformed the situation. That's because HMG has guaranteed all the liabilities of our entire banking system, including their massive foreign currency liabilities.

How much is that? As at end-October the banks' foreign currency liabilities totalled a very scary £4.2 trillion, or nearly three times our annual GDP. And as we can see from the following chart, over the last decade that exposure has ballooned beyond the range of anything we have ever seen before:

Now, of course, those £4.2 trillion of liabilities are matched against a £4.2 trillion pile of foreign currency denominated assets held by the same banks. So you might ask what's the problem?

The problem is that we have absolutely no idea what that £4.2 trillion of so-called assets are actually worth. It is generally believed that the banks have still not confessed to the true toxicity of their bad assets, and it would be frankly amazing if that £4.2 trillion is worth what it says on the tin.

Which leaves us with a serious problem. Because if there's a shortfall and our busted banks cannot make up the difference, then HMG will have to find a very large amount of foreign currency to plug the gap.

That's when our credit rating will become absolutely critical.

And that's also when we will find out what serious economists really think.

Fiddling While Prosperity Burns

There goes our future prosperity

The Pre-Budget Report (PBR) is turning out to be one of the most disreputable documents ever to emerge from HM Treasury - and that's against some pretty stiff competition over recent years.

As we blogged here, it failed to deliver on three critical counts:

• Borrowing - no progess on reducing it faster
• Taxes - higher taxes on jobs and a risky low yielding tax on bank bonuses
• Spending - unbelievably, spending was actually increased rather than cut

But it's worse than simply failing to deliver. The PBR is shot through with fiddles and outright deceit.

To start with, we have been told that schools, hospitals, the police, and overseas aid will be ringfenced. But there has been absolutely no explanation of how that squares with the overall spending projection. Not for the first time, it's been left to the indispensable Institute for Fiscal Studies to pick apart the entrails, and point out that other programmes, like Defence, will have to be slashed by an implausible 12% in two years, and perhaps 16% by 2014-15. How on earth will that work in practice?

And then, as we blogged here, the PBR's forecasts for tax revenue and welfare spending rest on highly optimistic assumptions about future economic growth. A realistic projection of the public finances would show a significantly worse picture, implying either much higher borrowing, even higher taxes, or further spending cuts.

We've also now discovered the PBR contained a disguised provision to uprate welfare benefits by more than the RPI just before the election, and then downrate them again afterwards. Which is breathtaking cynicism even for this government.

The latest twist is that "sources" have "let it be known" the PBR was not the Treasury's at all. The Treasury now claim they wanted to be tougher. They didn't want to increase spending, and wanted an increase in VAT rather than job-destroying NI. But they were overruled by Mssrs Brown and Balls.

In other words, even the government's own experts have disowned the PBR as an exercise in politicking.

Unsuprisingly, the bond market has had an attack of the jitters. We had always assumed bond investors would give us the benefit of the doubt until George Osborne took the controls, but their reaction to the PBR suggests we may not even have that long. Yesterday, the gilt market sold off sharply, amid mounting concern that our rulers are in denial about the need for drastic action. One bond market strategist put it this way:

"UK bond investors should look at Greece, where the bond markets have crashed this week. The bond markets in the UK could crash too, unless the government starts to initiate serious debt reduction policies."

Another said:

“The PBR seeks to create a fiscal fiction that the deficit can be resolved solely by tax hikes on a relatively small share of the population – the few, not the many – and without painful public spending cuts. The revenue forecasts again look over-optimistic, and there are no public spending plans after 2010-11 – only vague forecasts.”

 

Of course, we can never know exactly what the markets are thinking - they often don't even know themselves. But it's a fair bet a lot of players are now thinking what we're thinking: has Mr Osborne got the resolve to do the necessary? And even if he has, will Mr Cameron overrule him like Brown has just done with Mr Darling?

It will be tough enough to grip our public finances as it is. But by concealing the true scale of the problems, this shocking fiddled PBR just made it that much harder.

Way Too Optimistic

The fiscal projections in yesterday's PBR - just like last April's budget - rest on economic growth assumptions that are extraordinarily optimistic.

Here is the relevant table from the PBR (click on image to enlarge):

As we can see, GDP growth is assumed to bounce back in very short order to reach 3.25% pa from 2011-12 onwards. Over the five year forecast period from 2010-11 it is supposed to average 3% pa.

 

But in a world of over-indebtedness, zombie banks, and tax increases, that is highly unlikely. Consider:

1. The average of independent forecasts for more or less the same period (2010 to 2013) is just 2% pa - and that figure was calculated and published by the Treasury itself (see here page 18).
2. Last time we had to tackle a fiscal crisis even remotely like the current one - in the 70s - GDP growth was pretty close to zero for the following five years: in fact between 1976 Q4, when the IMF arrived, and 1981 Q1, when Geoffrey Howe finally completed the necessary fiscal consolidation, UK growth averaged just 0.4% pa.

So what if we adjust the Treasury's growth numbers down to a more plausible level? What happens to the projected budget deficit?

As we've mentioned before, the Treasury's own rule of thumb says that one percent off GDP growth, increases the fiscal deficit by 0.7 percentage points of GDP. Which as things stand comes to around £10bn in cash terms.

But of course, that's cumulative. If GDP growth is 1% pa lower than HMT's forecast, by the end of 5 years, the fiscal deficit will be running £50bn higher than the Treasury forecasts.

 

Well, actually it will be more than that, because by the end of 5 years, with all that extra borrowing, government debt will be £150bn higher than the Treasury projects. Which means interest costs will be higher. And even if we assume the government can go on borrowing at around 4% - a very heroic assumption - that's another £6bn pa on the deficit.

 

In other words, if GDP growth from next year turns out to be 2% pa rather than the 3% pa assumed by HMT, the 2014-15 deficit will be £56bn higher. Which means that if we take the average of independent GDP forecasts, by 2014-15 borrowing will not be £82bn as the Treasury projects, but more like £140bn - a very small improvement on this year's £178bn.

And if we take our post-IMF growth experience from the 70s as a guide, then on PBR policies, borrowing in 2014-15 will be an horrendous £228bn (equals (3.0 minus 0.4) times £56bn plus £82bn).

And you know, it could be even worse than that. Because even given its optimistic GDP forecast, HMT is making the additional assumption that tax revenues from the hard-hit finance and property sectors recover strongly as a share of GDP (from 2.5% this year to 3.5% by 2014-15). But if the property market remains sluggish, and the banks start liquidating the bad debts they still hold, then tax revenues will be much less. That could easily add a further £15-20bn to annual borrowing.  

 

Finally, the PBR projections assume unemployment stops rising in 2011. But back in the 70s, unemployment went on rising for nine whole years after the IMF visit - even after GDP had started to grow again. Which would put further upward pressure on borrowing.

All of which goes to underline the urgent need for strong fiscal action. Because yesterday's fiscal forecasts - alarming though they are - almost certainly understate the severity of the crisis.

Fantasy Spending

The most concerning aspect of the PBR is its failure to address our excessive public spending.

Because the key reason for our fiscal mess is that over the last decade public spending has been increased way beyond the capacity of our economy to support. According to the OECD, next year it will exceed 50% of our GDP, and it must be cut substantially.

The OECD also says that in both 2010 and 2011, the UK will have the highest government borrowing of any developed economy. And that includes supposed fiscal basket cases like Ireland, Iceland, and Greece. We are living on the edge, abd sooner or later the financial markets will take fright.

Against that worrisome background, the PBR's main spending decison was to increase it. Yes, that's right - public spending both this year and next is now set to be £5bn pa higher than forecast in the Budget.

And the longer term looks no better. Despite some broadbrush promisess of caps on public sector pay and pensions, there is no comprehensive spending plan. And very little detail on specific cuts, such as those proposed in the TPA/IOD cuts paper. Instead there is a great deal of wishful thinking.

For example, the NHS has been targeted for £15-20bn of those notorious "efficiency savings", but there is no detail on how they will be achieved - other than a statement that details will follow in the next budget. In other words, the whole thorny issue has been deferred.

Now, as long as we can continue to borrow a rock bottom rates we can continue with the fantasy of high spending. But history tells us fantasies like this never have a happy ending - as the markets will doubtless remind us some time in the next 12 months or so.

Non-job of the week

Plenty of public sector jobs on offer this week in the pages of the Society Guardian with several enormous, elaborately designed adverts battling for space whilst emphasising the proliferation of generous salaries. Nevertheless, this week’s non-job comes with more humble pay, if a more ambiguous description.

“Community Engagement Officer
  £23,860 - £26,917

You must have excellent project management skills, a comprehensive understanding of the neighbourhood management agenda and how it fits with the strategic aims for the city, you will have a proven record in devising and implementing new and innovative ways of engaging with local communities, especially those who are hard to reach.”

Eh? You have to head to the York City Council website if you want to make more sense of this one. And to be honest, you’ll be pretty disappointed to find a lengthier but similarly indecipherable job description. In this position you’ll have to “take a visionary approach to development of engagement and involvement”, “To take a lead role in the development of pilots which will deliver increased engagement and involvement across the city”, “To ensure that the engagement and involvement methods including Neighbourhood Action Plans connect and support the strategic vision of the authority and its partners”, and “analyse engagement within the authority”.

If you still aren’t sure but you think what the city needs is more council officers erm…engaging, then fear not, you’ll have adequate support in this role in the form of your very own sidekick. That’s right, you’ll have a Community Engagement Assistant (£17,243 - £18,957 pa) “To assist in enabling the opportunities for citizens to engage and participate in decision making and local democracy across the city.  To assist in the development of community engagement and the introduction of innovative methods of engagement with groups and sectors of York’s community who are currently not involved in local democracy”.

So basically you can ‘facilitate’ those who already engage with local democracy, or coerce/cajole/‘encourage’ those who aren’t particularly interested. This job actually has a precedent in fifth century Athens where public slaves were tasked with dragging a rope, covered in fresh red paint through the agora to herd citizens, willing or not to the Assembly. Well, at least that was the direct, thrifty approach. This is the costly, touchy-feely modern-day equivalent.

The Cost of Copenhagen

From this morning till 18 December 15,000 delegates will descend on Copenhagen to work towards negotiating a treaty to succeed Kyoto and reduce emissions. However, even before the conference has begun, there have been questions over whether a new deal will be struck.  US President Barack Obama and Danish Prime Minister Lars Lokke Rasmussen have conceded that the conference is unlikely to produce a treaty to replace the Kyoto Protocol, and are beginning to make arrangements for a delay until the next conference, in Mexico.   British officials also do not expect a new deal, with binding restrictions, to be agreed this year. 

In light of that and the large number of other international conferences that have been held this year, taxpayers around the world – who will be supporting the conference and the delegations being sent there – might question whether the conference will constitute good value for money.  This research note provides the first estimate of the total cost of the conference.

Download the full report here (PDF).

Key Findings

• A conservative estimate of the total cost of Copenhagen is £130 million ($215 million, €143 million).
• This estimate is based on the Danish government budget and the costs to participating governments of sending 15,000 delegates – including flights, accommodation, food, conferencing facilities and salaries paid to delegates while they are at the conference.  It is a conservative estimate as it leaves out costs such as the need for supporting work by staff in the home countries.

 

Download the full report here (PDF).

Matthew Sinclair, Research Director at the TaxPayers’ Alliance, said:

“The politicians and bureaucrats going to Copenhagen seem to think that it’s unlikely that they’ll reach a deal and they know that even if they can get something signed, an increasingly sceptical public aren’t going to accept ever more expensive climate change policies.  This means that a huge amount of money is going to be spent on the summit, and thousands of tonnes of carbon dioxide emitted to get there, just to give the delegates a good photo opportunity.  Politicians need to stop this expensive jamboree and instead focus domestically on bringing down the ruinous cost to ordinary families of green taxes and regulations.”

New Research: Public Sector Rich List 2009

As politicians call for a pay freeze, public sector executives get a 5.4% pay rise

• In 2008-09 at least 806 people received remuneration packages of £150,000 or more a year 

• 8 people in the public sector earned more than £1 million a year, compared with 4 people in 2007-08

• Gordon Brown is the 324th highest paid person in the public sector

All political parties are now publicly committed to tackling the problem of excessive pay for senior public sector staff, responding to taxpayers' anger at public sector fat cats. In November 2006 the TaxPayers’ Alliance produced the first ever list of the most highly paid executives in the public sector. Now in its fourth edition, the Public Sector Rich List is not only more detailed and comprehensive, it also feeds into a public debate that has changed markedly over the past eighteen months. 

Harriet Harman recently blocked a £185,000 salary for the new Chief Executive of the Equality and Human Rights Commission. George Osborne has said that “anyone who wishes to pay a public servant more than the Prime Minister will have to put it before the Chancellor”.  Vince Cable has said that “pay restraint should start at the top”. It is important that this rhetoric is matched with a serious crack down on inflated pay at the top of the public sector and rewards for failure, and that taxpayers can look forward to a new era of transparency, accountability and restraint.

Read the full report here (PDF).  

Key findings

•    At least 806 people receiving remuneration packages of £150,000 or more a year in 2008-09 across 358 government departments, quangos, public corporations, other public bodies and nationalised industries. For reference, there were 124 people earning more than £150,000 in this year’s Town Hall Rich List which covered 2007-08. 

•    A key difference with this year’s Rich List is that it includes the top employees from the state controlled banks. The most highly paid person in the public sector this year is therefore Mark Fisher of the Royal Bank of Scotland, whose remuneration was £1,388,000.

•    Of the 806 people on this year's list, 30 are bank employees.

•    Adam Crozier of Royal Mail is the highest paid non-bank employee in the public sector, earning £1,309,000.

•    Gordon Brown is the 324th highest paid person in the public sector.

•    The average total remuneration of the 806 people on the list is almost £225,990 per annum.  This works out at over £4,700 per week.

•    By comparison, according to the Institute of Directors, a managing director of a private organisation with a turnover of between £50 million and £500 million could expect to earn £141,440 and an executive director £87,000.

•    Even without the bankers, the average remuneration package on our list is £209,151.

•    The BBC has at least 53 people on £150,000 or over. Transport for London has 50 members of staff on or above £150,000. In comparison, the Treasury, the main Government department responsible for tackling the recession, has a modest 3 people in the Rich List.

•    There are 8 people in the public sector who earn more than £1 million a year, compared with 4 people last year.

•    There are 35 people in the public sector earning above £500,000 a year compared with 21 last year.

•    There are 120 people earning above £250,000 a year compared with 88 last year.

•    The average pay rise of the people with remuneration for 2007-08 and 2008-09 is 5.4 per cent. This is compared to a pay rise of 2.7 per cent for a nurse and 2.3 per cent for a teacher.

•    Because of extensive work in other areas of the public sector, the total number of people on the Public Sector Rich List 2009 is not comparable with previous editions. For a full explanation, please see key findings in the main report.  

Download the full report here (PDF).

John O’Connell, Policy Analyst at the TaxPayers’ Alliance, said:

“Executive pay in the public sector is completely divorced from the reality of Britain’s fiscal crisis. Ordinary families, struggling to make ends meet in the recession, don’t pay their taxes to fund gold-plated deals for public sector fat cats. All parties now agree that excessive pay packages must be tackled but the time for action is now, not next year. Taxpayers want genuine transparency, accountability and restraint in setting top public sector pay.”

Non-job of the week

Another Wednesday and a new influx of non-jobs hit the pages of the Society Guardian. From scanning these adverts, one could reasonably assume that the majority of public bodies care more for their reputation than they do for their service delivery, with vacancies for communications professionals filling every page.

Take South Lakeland District Council for example (who happen to be advertising for four positions at present, with salaries totalling as much as £164k) – they’d like a new Communications Manager to “wow” residents and bring them up to date with 21st century social media. Now, this is a council who upped their publicity spending from £73,000 to £183,000 between 1996-7 and 2006-7 and the population of the place only just tops 100,000. If local authorities think twittering would be an advantage, then can they not just figure it out like everyone else, rather than shelling out almost £33k for the salary of a new council officer? Go on the internet, read the instructions, ask a friend but please, don’t resort to Elton John levels of extravagance by hiring a man to push the button for you…

And from councils who are throwing their weight, and our money behind new mediums of communication, to councils who are continuing to flog a truly dead and thoroughly ineffective horse. This week’s non-job is from Havering Council;

“Community Newspaper Editor
£29,601 - £31,761

Havering Council’s community newspaper, Living, is a bright and energetic fortnightly publication, delivered to all residents of the Borough. It combines news from the Council, with features on local history, community projects, people and places.
We are now looking for an enthusiastic and skilled professional to lead on the production and development of our flagship publication.
Based in Romford, Havering Council delivers services to one of London’s largest boroughs. We are looking for the right person to help us tell our story.
If you are an experienced writer, able to craft your own copy and edit the work of others to fit our snappy house style, then we want to hear from you.”

Oh, we do all love our council’s regular community newspaper don’t we? Oh no hang on….most of us fast track it straight into the bin or use it to line a litter tray.

Costly to produce, print and deliver we can only hope that pretty soon this medium of “communication” (usually more like a local authority boasting booklet) is made history. Advertising sales might cover some of these costs, but that still doesn’t take away from the fact that producing such a newspaper and delivering it to every resident is a wasteful contradiction to local government’s preachy environmental agenda.

It’s hard to know who to feel most sorry for, the taxpayers who shell out for these increasingly redundant positions at councils right across the UK, or whoever lands what must be a pretty soul-destroying job. Whatever the case, when our councils are saying they're cash-strapped, it’s exactly this sort of needless propaganda they should axe first, especially when the read it/resent it ratio on these publications are heavily weighted in favour of the latter, and consequently it’s likely that Havering’s ‘bright and energetic’ Living paper actually does their reputation more harm than good.

Barnett Formula Remains Unchanged

The unfairness remains

Last year we published a paper on the Barnett Formula calling for its abolition (see here and here). We argued that Scotland should be granted full fiscal autonomy, with responsibility for raising its own tax revenues.

Since then we've had a weighty report from the Calman Commission that fell some way short of what we proposed. And yesterday we got the government's response, which fell even shorter.

The core of the government's new proposal is that the Scots should be given wider authority to vary their local income tax rate (they already have authority to add up to 3p to the standard UK rate). In Scotland, the UK rate of income tax at both basic and higher rates would be reduced by 10p, and replaced with a Scottish income tax, decided by the Scottish Parliament. Scotland would lose an equivalent chunk of its block grant funding from London, but therefater  it would have the authority to vary its local income tax rate up or down.

So a step along the high road to fiscal autonomy?

Well, possibly, but a very very small one.

To start with, the amount of revenue involved is only about 15% of the current block grant. Overall financing arrangements will remain hugely dominated by the Barnett Formula, which will remain in place, as is.

Second, the Scots will not be permitted to change the graduated structure of income tax: their Scottish local income tax will have to be at the same rate for all taxpayers right upthrough the tax bands. Which means for example, they will not be able to counteract the economic nonsense of the new 50p top rate (which as we know, will damage the economy and may actually reduce revenue - see this blog). Real fiscal autonomy would allow the Scots to make their own decisions on tax incidence, and would allow them to compete with England.

Third, the Scots will have no incentive to build their tax base. The Barnett Formula grant will be reduced by Whitehall's calculation of what a 10p rate would raise in Scotland. Which means that if the Scots manage to grow their economy and their tax base, they will lose grant funding, one-for-one. This is the classic problem with such grants - they incentivise inefficiency rather than local enterprise and effort.

So the real decisions on Scotland's fiscal autonomy still lie ahead.

But don't hold your breath. No London-based government has ever shown enthusiasm for surrendering meaningful tax power to Edinburgh. And since the collapse of their overblown banking system, the Scots have also taken a mighty step backwards.

The road to fiscal autonomy is a long one. And it will become increasingly stoney for cash-strapped English taxpayers who continue to fund much higher public spending in Scotland than they receive themselves.