Sunday, September 14, 2014

Sunday Herald. September 14, 2014.

On Thursday, if you reside in Scotland, you can participate in the only vote on independence the country has ever been allowed. That, right there, is the big deal.

It may be you are one of 200,000 who voted by post before panic-stricken Better Together parties cobbled together another “offer” of nothing much. You might, rightly enough, be unhappy about that. It doesn't alter the rule. One person gets one vote.

Though they protest otherwise, the rule doesn't sit well with those who think they run your world. For them, being in charge of companies with numerous employees means the chance to influence numerous votes. If the firm in question matters to the wider economy, chances multiply.

The conceit isn't covered by the usual definitions of democracy. In fact, the idea that you can be told how to vote by those who serve only the City is one good reason why a referendum was essential. The United Kingdom, that land of liberty, does not tolerate these outrages so much as demand them.

The kingdom has become one giant rotten borough. Finance, business, corporate interests – all the euphemisms for money – took control of Westminster long ago. The self-interest is blatant, yet passed off as “wealth creation”. The crimes are heinous, yet no punishments follow. Still the boardroom nomenklatura expect to be obeyed.

You might call it a reason to be shot of the UK. Could Scotland do better? That's the wrong question. Instead we should ask: could Scotland, in reason, refuse to try? If the word “fairness” is being heard everywhere in these last days before the vote, we should consider the companies claiming the right, with menaces, to tell us how to think.

Last week, the bigger beasts piled into the referendum argument. RBS, the Lloyds group, Standard Life, BP, even the co-operative sorts at John Lewis: without saying as much – for they dared not – they let it be known that the consequences of Yes would be dire. The threat, plainly co-ordinated, bore but the wisp of a veil: vote for independence and you'll be sorry.

Had they consulted shareholders, employees, “partners”, or even – a novelty – customers? Captains of industry do not consult unless their jobs on the line. Did they rush to correct the false impression that mass job losses and price rises would follow their flight from the horror of independence? Only, in the case of the banks, after the fact, and as the law required.

For 24 hours it was a good tale for newspapers hungry for anything that might distract attention from the Yes campaign. If it later transpired that the Treasury had (allegedly) handed the BBC market-sensitive information about the intentions of RBS just to help a scare along, that could be brushed aside.

Instead, the preferred story was that Alex Salmond had been testy towards the august Nick Robinson, the BBC's political editor, at a press conference. Better still was the myth of big employers taking thousands of jobs and lots of money out of a Scotland “destabilised” by independence.

There are strands to this. One has to do with a legal responsibility to warn shareholders about the possibility – in the judgement of directors – of risk. Logically, executives are obliged to engage in contingency planning. Behind the “Banks Quit Scotland” headlines the reality was that RBS and Lloyds had laid plans to shift domiciles. In the case of the former, those involved moving its registered headquarters. Nothing less, but certainly nothing more.

After the BBC was done upsetting share prices, RBS made that much clear. In a letter to staff, the bank's chief executive, Ross McEwan, wrote that the HQ decision – if it happens – would be “a technical procedure regarding the rotation of our registered head office based on our current strategy and business plan. It is not an intention to move operations or jobs”.

Of course not. Despite any brasswork you might find in Edinburgh, Lloyds – with the remnants of Bank of Scotland in its bowels – has long had its HQ in London. RBS, that fallen giant four-fifths owned by the UK government, is a “Scottish bank” only in a formal, historical sense. It has operations based here because, as McEwan said, of “the skills and knowledge of our people”. Its true corporate identity is trans-national.

You could say the same of Standard Life and BP. They operate in many parts of the planet. Often they function in places that are less risky than downright dangerous. Somehow they cope. But when an extraordinary 97% of Scotland's adult population registers to vote in a democratic referendum, those who run these firms want us to believe they must club the panic button.

RBS, with George Osborne as its overseer, would probably claim it doesn't play with politics. So what are the risks it fears? Better Together's favourite tale is that an independent country would not be able to “stand behind” a bank with a balance sheet embracing hundreds of billions. Another collapse, we hear, would be another Darien. If not, the flight of RBS would cost Scotland millions in corporation tax.

First, the bank doesn't pay any of that, just at the moment, thanks to its parlous condition. Secondly, as Salmond explained to Robinson last week, the tax is levied according to the places in which commercial activity takes place. Unless RBS means to shut down every operation in Scotland – and it intends nothing of the kind – corporation tax is irrelevant to the argument.

For now, upwards of 80% of the shares are owned by the UK government. The risk of another RBS failure falls on London, not Edinburgh. But even that fact is not the entire truth. Who is this “lender of last resort” mentioned so often by Alistair Darling? The honest answer, for trans-national banks, is “lots of countries”.

As Business for Scotland has recalled, emergency loans of £285 billion and £115 billion were made available to RBS and HBOS respectively when global banking went to hell. Those huge sums were made available to “Scottish banks” by the US Federal Reserve. That's how the system (or scam) works. Barclays, the most English of banks, got £552 billion from the Fed. Everything depends on where a bank is doing business. The idea that such institutions exist thanks to one country is ancient history.

Those who run the things are cynical enough, nevertheless, to please their political friends and give the peasantry a scare. On Thursday afternoon the BBC's Robert Peston let it be known that David Cameron had been chatting with supermarket bosses to urge them – as the journalist tweeted – to “go public on how prices would rise in indie Scotland”. Just like that. It is not plausible to believe that RBS, Lloyds and the rest were not given the same friendly advice.

Is that what passes for democracy in Britain? Is that how you deal with a people trying to make a better society? Those are rhetorical questions. On Thursday, they will need an unambiguous answer. Better Together with the bankers and bullies of a corrupt UK? If that's still what you think, they saw you coming.


1 comment: