It’s The NHS, Stupid

So, I wrote a little piece about the economy a few weeks ago. I said then that I’d write something about “It’s The NHS, Stupid” so here it is…. I’m not sure if anyone is reading what I write (actually I am ‘coz the WordPress stats are err, empty…) but here goes anyway.

Writing about the NHS is relevant because it’s maybe the most obvious area where a no vote will have huge impact in the future for Scotland. I sincerely believe everything I am about to say is accurate and can be verified should you wish more details.

1. NHS Scotland and NHS England/Wales have always been separate organisations. They were created by different acts of parliament.

2. All matters relating to NHS Scotland are currently devolved from Westminster to the Scottish Parliament. This is by Westminster’s permission, which if they so chose, they could withdraw.

3. NHS England was subject to the “Health & Social Care Act 2012”. NHS Scotland was not. This act completely changed the way the way NHS England operates internally. It was the biggest change since the NHS was founded. In effect, it created a competitive price driven market for services within NHS England. It gave funding to buy those services to GPs and created “Commisioning Bodies”. There are many analysts who agree that this was in effect the privatisation of NHS England. It is still free at the point of use, however the model which has been adopted is remarkably similar to the American model for healthcare. There are now multiple commercial companies competing to provide services to the NHS. Services like Plasma Resources UK (an important part of the Blood Services) – which has been sold to a Venture Capital firm owned by Mit Romney

4. NHS Scotland remains a single service (it’s not perfect, it needs to change and evolve in line with our population and needs, but it is still true to the founding beliefs)

5. The pressure on NHS Scotland following a No vote will come in two ways – firstly, as overall UK Government spending on NHS England will go down as a direct result of it’s privatisation, the direct consequence will be a reduction in the money made available to Scotland through the Barnett Formula. This reduction in the “Block Grant” will in most analysts views the Scottish Government to have to reduce the spending it can make on NHS Scotland. The second, not so obvious way there will be an impact – and this one is far more serious – is through a little discussed legal framework which the UK Government (and the EU) are currently negotiating with America. It’s called The Transatlantic Tade and Investment Protocol (TTIP for short). To summarise this thing, when it’s signed/agreed it will give fully legal power to large Corporations to sue Governments for loss of profits, if the Government has passed a law which the Corporation deems is causing it to lose profits. (Think about the way Monsanto is currently suing the EU over various herbicides) is The court which will adjudicate on any such cases is in America. How does this impact on NHS Scotland? Well, as NHS England is already privatised, so a Corporation could sue the UK Government for the profits it is not making from NHS Scotland. Thus, making the break up and privatisation of NHS Scotland far more likely. (This could also apply to Scottish Water, as it too remains a national service where the equivalents in England are private). As I understand it, the only way to avoid a TTIP challenge to the national services in Scotland will be if Scotland is no longer part of the UK. ie there is no comparable services which are already privatised in the Nation.

I’d be happy to be corrected if I have fundamentally mis-represented what is happening to the NHS in the UK. I’m not a politician, just a guy who sees what’s happening in England is really worried about what those changes will mean for my children and their children.

Privacy vs Security – you might want to use this site.

There’s something about the cross-party support and rush to get a new surveillance law on the statute books that doesn’t seem right to me. Although I can’t remember what the law was, I’m sure this isn’t the first time our Government has rushed a law through in the last week of their working time (why they have so many and such long holidays is another discussion….) which subsequently turned out to be poorly framed legislation. (Was that the RIPA bill?? Might have been) Yet here we are again. Being told to believe there’s an “Emergency”. Have the politicians never read the story of the boy who cried wolf? I’m prepared to accept that there’s “bad people” out there, terrorists & paedophiles being the current bogey-men. But I don’t think allowing the collection of EVERYONES data, thereby permitting at a stroke the state to be able to monitor every single one of us all the time is a proportionate response. Either the terrorists are winning after all or we’re living in 1984. The DRIP bill on which your MP will be voting tomorrow is another step along the way to a very bad place. As I’m writing this I can’t find the link to figures of how many requests were made for information collected under the RIPA last year. It was something like 500,000 requests – and they were made by organisations outside the security services like local authorities. Do you really think they need to know who you called, where and when?

There are sufficient people who are far better able than I am to assess the legal ramifications of this bill (Here’s a handy compilation of sources ) Meantime, the link at the start of this post is the easiest way to get in touch with your MP if you’re at all uncomfortable about the haste with which this DRIP bill is being put through.

It would drive you to drink…..

Honestly, there are times when it seems the media are truly on a propaganda exercise and have given up on anything resembling journalism, fact-checking and investigations. Today in the Independent we have them repeating these words from Alistair Darling

“He hits back at Mr Salmond’s claim in yesterday’s Independent that Mr Cameron is playing “European roulette”, in which Scotland could be dragged to the EU exit door in his 2017 referendum. Mr Darling replies: “It is Alex Salmond who is playing roulette with the EU. The average time it took countries to join the EU in the last 20 years is about eight years. The last thing Scottish firms need is that uncertainty. It would be entirely self-inflicted.”

Source :–and-we-may-not-gain-anything-from-it-says-alistair-darling-9590806.html


And in the Herald today we have the headline about Italy assuming the Presidency of the EU and stating categorically that it will be neutral. It says:

The country’s European Affairs minister, Sandro Gozi, warned anything said by Brussels officials could be manipulated and said the vote should be up to Scots. His remarks, couched in diplomatic language, mark a clear departure from the stance of former European Commission President Jose Manuel Barroso, who said it would be difficult if not impossible for Scotland to rejoin the bloc. Mr Gozi, a former EC official and diplomat, said: “We are not worried by the referendum in Scotland and we have no position on it because they are responsible for deciding their own future.

Source :


So who is right? Which newspaper is being honest with the Scottish people (in fact, with the people of the whole UK)? Is it any wonder that many people are getting turned off from thinking about which way to vote when there’s such a complete lack of decent reporting in the media. Over on his blog, Derek Bateman hits the nail on the head again –

“And the level of so called journalism makes me cringe when I hear the highly dubious and unconfirmed claims that ministers intimidate businessmen being canvassed by the media. What do the same dim wits think removing contracts, closing yards, sacking workers and insulting them by making them foreigners amounts to? If that isn’t intimidation, what is? We will put up a border with guards…we will refuse to buy your electricity…we will deny you access to your currency…we will bar you from membership of NATO…each one a direct public ministerial threat to the Scots. Does our august media report it that way? Of course, not. Balance, perspective and intelligence are the last attributes we should expect.”


Here’s the worrying part of this. Regardless of whether there’s a YES or a NO vote in the referendum it seems to me that the media has lost all credibility. The genie of truth,lies and spin is out of the bottle and can’t be put back in. If the vote is YES, then all bets are off as the new nation sorts out the media it needs. That’s probably a risk to the operations of newspapers based outside of Scotland. (aside: I wonder if that’s in their annual reports as a risk – just like the words Stagecoach used). If it’s a NO vote then although the media may think it’s back to business as usual I’m not so sure that will be the case. So either way, the media has probably already lost the referendum of public trust.

It’s enough to drive you to our national drink…… oh wait, they’ve been bullied and threatened. Really? Says who? The media which can’t seem to find consistent facts that’s who.

A letter to a wee ginger dug

I was struck by the figures towards the end of this article. They’re worth absorbing.

Wee Ginger Dug

A guest post by David Kelly

I am a computer specialist who has been working in the Oil and Gas sector in Aberdeen for almost 40 years. I am called a “Subject Matter Expert” (SME) because I know a fantastic amount about almost nothing.

This is the first time in my life I have been so engaged in politics. I have always had a few clever words to say, a sarcastic observation, a cynical put down. I have been on the odd march about war or nuclear weapons. I write an occasional letter to the newspapers. Now I find myself out in the evening knocking on doors selling what I believe in. Writing a letter to a dug I have never met because I am passionate about politics.

What is going on, what has changed? I have thought about this a lot and want to share these thoughts.

I am…

View original post 992 more words

This could have been written for the Indy Ref…….

So here’s a song that’s 20+ years old…… but the lyrics almost perfectly cover what’s happening today in the Independence campaign. (With thanks to Mike and the Mechanics)

“Now the world is getting older
There’s a few things to be said
Do you believe the things they told you?
Do you believe the things you’ve read?

There’s a rumour on the corner
But it’s always been denied
Cause they don’t want you any wiser
You’re just toeing the party line

From the west side to the east side
From the north side to the south
You’ll never get bad information
If you believe in the word of mouth

Look out for those who still want to hang on
Look out for those who live in the past
Get out and listen to the whisper
Because the times are changing fast

From the west side to the east side
From the north side to the south
You’ll never get bad information
If you believe in the word of mouth

You don’t believe the information
You don’t believe it, when it’s denied
So when you’re reading explanations
You have to read between the lines

From the west side to the east side
Through the windows I’m looking out
You’ll never get bad information
If you believe in the word of mouth

Get out and listen to what’s being said on the streeets, in the town halls and church halls. One conversation at a time.

“It’s the economy, stupid”

Is a phrase associated with Bill Clinton’s successful 1992 presidential campaign. So why should that matter for the Scottish Independence referendum? Simply because for many people this is one of the key factors which they are considering before they decide which way to vote. It would be fair to paraphrase the headline to be “It’s the NHS, stupid” or “It’s the nucs, stupid” as they’re also thing that folk are thinking about. But this post is about the economy. I might deal with the others in future posts. I’m not an economist, but I do read economic books and information. I’m trying to understand what’s going on, and what it might mean for the future generations. To me, there are plenty of warning signs which make me think that the UK economy is really not in a good shape at all. And this matters, or should matter, when we think about what an Independent Scotland’s economy might be like. It’s not just about Scotland’s future – it’s about the UK’s future too. I’ve tried to avoid using numbers in this post as it’s possible to argue a case based on whatever figures you have to hand. Instead I’m looking at how the economy is structured and the things that make a contribution to it.

So, the UK economy. It’s all rosy isn’t it? We’ve got spectacular growth in property values (in some places), decent amount of jobs being created, inflation at a low level so what’s to worry about? The “broad shoulders” of the UK are bearing up and carrying us all along. But are they? Are they really? The spectacular growth in house prices is in London. 25% increase in property values……… wow. The North East of England, large parts of Scotland tell a completely different story. Now I’ve held the belief for a very long time that there is something fundamentally flawed if house prices are racing ahead of people wages and ability to buy them. To me, it’s just nuts. I just can’t see how, in any reasonable society it can ever be good for this to be happening. All it does, as far as I can see, is to put buying a home out of the reach for a very large part of the society. Why should this matter? It’s always been tough to buy your first home. Well no, it hasn’t ever been as hard as it is now. When we bought our first home in the mid 80’s it costs us about 2.5 times our joint income. In London, they are now saying the average house is about 9 times joint income. So how can anyone, even if they are on a reasonable wage ever think about being able to buy their home? The whole topic of home ownership vs rental is another to think about. Rental would probably be OK if there were controls on rents and there wasn’t the insane focus on economic growth through increased property values….. But we are where we are and we have to compare the options of an uncertain future. (A thought to ponder. Can the future ever be anything other than uncertain? Think about it….)

Thomas Piketty has demonstrated in his book “Capital In The Twenty First Century” that we’ve reached a stage in our (western) economic development where inequalities are “locked-in” by the rise in returns available to those with capital. The UK economy is a living breathing exemplar of Piketty’s theories. Are these the economic conditions which will enhance an independent Scotland? Piketty, amongst others, suggests there are alternatives to the “Austerity-Max” which dominates the UK political/economic thinking.

Students are leaving University with debts which are bigger than many of my generation’s first mortgages. So is this a con created by the banks in cahoots with the Government? Saddle the youth with the baggage of debt before they’ve even started their careers and we’ll own them forever? Feel free to discuss, but it’s a point of view which has some credibility.

Meanwhile back at the UK economy. It looks like all the growth is once again coming from the financial services sector. It’s only 6 years since we last saw what that delivered to the UK economy. So just how robust is the economy? I think it looks scarily similar to the way it looked in 2006 or so. Property values in London racing ahead of everything else, an almost unregulated finance sector creating money out of thin air. Go and read about rehypothecation of assets, hedging and derivative trading – it’s all STILL going on and we know how well that worked 6 years ago don’t we? The UK Government hasn’t made any real changes in regulating the banks, so why should we be thinking they’re doing anything different from 2006/07….. Think again about London property prices, if it looks like a bubble, feels like a bubble, acts like a bubble then it probably is a bubble. What’s going to happen when this one bursts? (Which it inevitably must, maybe not until after the 2015 elections though). Who is going to sort out the mess this one leaves behind? Bail out the banks? What? Again? With who’s money? Perhaps with one of the decreasing number of assets the UK has? Oh hang on, we’ve already privatised almost everything so that only leaves the oil tax revenues then doesn’t it? The UK debt is estimated to be £trillions. That’s a serious problem which just isn’t going to go away without some really apocalyptic event. To be clear, this is the UK debt (like our national overdraft). The deficit is not the same thing at all. Despite some politicos seeming to think so. The deficit is the difference between what we get in over a time period, say a month, and the amount of money we spend over the same time period. So….. reducing the deficit obviously helps the economy, but it doesn’t necessarily reduce the debt. Huh? Supposing UK plc has been taking in £100/month in tax but at the same time spending £150/month on stuff. That’s a £50/month deficit. After a few months of doing this UK plc would have a significant debt – which has to be paid back – with interest! Now suppose UK plc manages to reduce it’s spending from £150 to £120 that’s a good thing. But the debt is still going up. UK plc is still having to borrow more money than it’s taking in, just at a slightly lower rate. This is what’s actually happening in the UK economy. Obviously the figures are far, far larger, but the UK government is continuing to spend far more money that it is taking in, despite the slavish adherence to “Austerity”. So where’s the money going? Good Question – ask a “Better Together/No Thanks” rep to explain this to you. I can’t. I just know that someday UK plc is going to have to pay back all this money and that is probably going to cripple the county. (You can read more about this here –

But don’t worry there are plenty of jobs being created in the UK aren’t there? The headlines about employment are papering over the fact that many of these “jobs” are on zero-hours contracts or part-time. The Joseph Rowntree Foundation has recently published their analysis of the state of the UK. Their authoritative new research published today (30 June) shows that the cost of what the public thinks is essential has soared 28 per cent since 2008 while average earnings have risen only 9 per cent. The analysis shows that even as real wages start to rise again, low-earning families with children are unlikely to be able to close the gap between their income and their needs, due to low pay, rising prices and reduced government support. You can read it here – And then factor in that most of the job creation is in London where property prices are rising even faster than wages……. Summarising the JRF report, for most people things are not improving and are unlikely to improve in the foreseeable future without major political interventions and changes. Now think about all of this in terms of the economy. If a high percentage of the population is struggling to make ends meet (perhaps because they’re paying down credit card debt or paying large mortgages) what’s keeping the economy ticking over? Also think carefully about pensions. Remember that the UK pensions aren’t funded by some saved up pot of gold, they’re paid to pensioners from the money the government gets in every month in tax. So if the economy in the UK isn’t in good health (maybe because there’s that vast debt to pay back AND the new jobs being created have a high percentage of zero-hours and minimum wage/part time positions) then the future of UK pension payments is starting to look really uncertain. Means testing and as many reductions in pension payments as possible – I’d bet on these coming. Soon. Just after the 2015 elections.

And all the politicians in Westminster are singing from the same hymn sheet on “Austerity-Max” for the 2015 elections. So ask yourself, “Where’s the change that society (and thus the economy) needs going to come from?”

So you can see how the “Broad Shoulders” of the UK economy really are good for Scotland aren’t they? It’s so important that if you’re thinking of voting “NO” you go into this with your eyes wide open. The UK is not in a good economic position – just don’t believe that this fact is ever going to be discussed in the mainstream media. The UK’s future is scarily uncertain.

Do you really think an Independent Scotland could be any higher risk? Are we really “Better Together”?



Rehypothecation – an explanation.

If you’ve managed up till now to avoid this word, it’s because you’ve been living in a financial la-la land, a dreamworld where banks and brokers are honest & straightforward, and the world financial system is basically sound. Of course, they simply aren’t, and it isn’t. But however bad you think everything is, rehypothecation makes it all worse… much, much worse.

The quick version goes like this: that when a bank or broker lends money secured against an asset, they can then borrow against the same asset they’ve lent against. And that the bank or brokers who lend them money can then repeat the process. The initial mortgaging is hypothecation: the subsequent chain of mortgages is called rehypothecation.

As explained on the excellent Zero Hedge site, there is a fundamental asymmetry between US rehypothecation rules and UK which in essence means we let all the worst and dodgiest deals happen in London. Rehypothecation rules:-

Under the U.S. Federal Reserve Board’s Regulation T and SEC Rule 15c3-3, a prime broker may re-hypothecate assets to the value of 140% of the client’s liability to the prime broker. For example, assume a customer has deposited $500 in securities and has a debt deficit of $200, resulting in net equity of $300. The broker-dealer can re-hypothecate up to $280 (140 per cent. x $200) of these assets.

But in the UK, there is absolutely no statutory limit on the amount that can be re-hypothecated. In fact, brokers are free to re-hypothecate all and even more than the assets deposited by clients. Instead it is up to clients to negotiate a limit or prohibition on re-hypothecation. On the above example a UK broker could, and frequently would, re-hypothecate 100% of the pledged securities ($500).


Places to go and read more on this type of subject. Some of these are a bit older, but the broad circumstances they describe don’t seem to have changed much.