WHAT NEXT?

WHAT NEXT?

It is a question many are asking. The more so because some of the answers are becoming clearer by the day. A crisis is coming, correction , many more than one crisis is coming.

Some are obvious, but that makes it no easier to come up with personal solutions. The cost of living crisis is incredibly serous. It is going to take many more people to the verge of poverty. For those already living in poverty it will simply be disastrous. The increase in costs are completely unmanageable. 

It is going to change society. The only question to answer is how will that change manifest itself? I think the first thing to realise is that it is going to be severe and long lasting. We face the prospect of an inflationary recession, the worst type of recession imaginable, everything will be adversely affected. Wages, where they are any, will have less purchasing power, borrowing costs will rise as banks raise interest rates. This in turn will raise mortgages for those not on a fixed rate. With Brexit already responsible for big food cost increases, inflation will add to the burden. For those like pensioners and others living on fixed incomes they face the prospect of keeping up with the increases while, at the same time, those fortunate to have savings, will witness their true value dwindle in front of their eyes.

In the workplace I anticipate a big rise in industrial disruption as workers demand big wage rises to match inflation. Companies will in many cases be facing big problems as well as inflation builds in their supply system, reducing margins and their ability to pay out the bigger wages being demanded. Jobs will be lost in this process, how many is still to be experienced but my view is it could be big numbers.

Many people live on the edge, the numbers who appear comfortable at the moment that would be in desperate straits in a matter of weeks if no wage or salary was being received is a very substantial number.

We are in an incredibly weak position. We manufacture very little. Because we are in the Union we are a major food importer. Despite being the most energy rich country in Europe,  we get charged more to load it into the grid than any other energy producers in Europe, most of whom are paid, rather than charged, to do so.

This is historic political failure, for decades our oil and gas resources enriched our neighbour rather than ourselves. That is how you end up with more oil and gas jobs in England rather than Scotland. Our renewables are going the same way, the new cable based in Blyth will export Scottish renewable energy, not anywhere in Scotland. We will have no control as England exports whatever energy they don’t just use themselves.

Ah but we have whisky! Do we? Have a look at that industry. How much of it is owned in Scotland? Very little! Where are the sales offices and the higher value jobs? In the main in England, London in particular benefits. Have you heard of transfer pricing? That is a mechanism used by corporations to move profit about. In the main with whisky this involves paying the actual distillery pennies from the whisky production, then gradually adding “ value” the further the whisky gets away from the distillery. The high value sales are of course controlled by the sales offices, very few of which are located in Scotland.

We had the opportunity in 2014. For the first time in my lifetime Scots woke up. They voted for Independence, however the lack of a proper franchise, a franchise that would have operated in virtually every other country in Europe, sufficient non Scots who the Edinburgh University study evidenced voted overwhelmingly no, particularly those originating in the rest of the UK, and they were sufficient, when added to the minority of Scots who voted no, to deny us freedom.

Many of the Scots who voted No thought they were preserving the UK place in the Single Market of the EU, or preserving the HMRC and military shipbuilding Jobs, or the benefits contained in the last minute Vow which promised the moon, while busily stealing the spaceship.

We fell for the London easy money story from Thatcher, or at least England did,, allowing industry and manufacturing to be destroyed all in the hope that a economy based round the financial trading houses in London would keep us afloat. It didn’t.

For a country like Scotland it was madness. Scotland with its history of both heavy and light engineering industries suddenly had no steel production. Prices soared because pricing is based on the costs of transporting the steel from the nearest main plant. Suddenly there wasn’t one in Scotland anymore.

Why did this happen? I will finish with this example because I was all over the newspapers and TV at the time forecasting it would be the disaster it has proved to be.

Steel production came early in the drive to privatise anything that moved. It was therefore hugely important it was oversubscribed. To achieve this British Steel were instructed to reduce production capacity. The idea, which came from financial management, was to “ ensure” British Steel could “sell everything” they made in the UK and return steady profits.

Business doesn’t work like that. If you open up gaps in your market you are inviting in foreign competition. When they enter the market they will not limit their sales to just the areas and products you have chosen to no longer manufacture. They sell across the entire sector and those sales allow them to develop a sales and delivery distribution service at a fraction of the huge cost it would have if you had not given them such an easy road. This is what happens when accountants and financial managers think they know how to run a business. Thatcher let this type of “management” to run wild in the 1980’s.

It was a huge mistake then. We are still paying the cost of the folly that allowed the country with the largest steel requirement in Europe at the time to end up with no steel industry.

This example relates to steel but it could be applied to many others. Yet here we are in 2022 facing a huge crisis and we still have a Scottish Government looking the wrong way, pursuing ridiculous policy development that denies science, leaves most of our communities looking on in bemusement. Where the only boom industry being food banks…and we are going to need a lot more of them! 

What a mess we have allowed to develop in our food rich, energy rich, country.

Give me a shout when you all decide to do something about it.

I am, as always

Yours for Scotland.

BEAT THE CENSORS

Sadly some sites had given up on being pro Indy sites and have decided to become merely pro SNP sites where any criticism of the Party Leader or opposition to the latest policy extremes, results in censorship being applied. This, in the rather over optimistic belief that this will suppress public discussion on such topics. My regular readers have expertly worked out that by regularly sharing articles on this site defeats that censorship and makes it all rather pointless. I really do appreciate such support and free speech in Scotland is remaining unaffected by their juvenile censorship. Indeed it is has become a symptom of weakness and guilt. Quite encouraging really.

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