A good day for debtors

Today was a good day to be a debtor. First we had the news that Wonga is writing off the debts of 330,000 customers and then our First Minister used FMQs to announce that councils would be prevented from pursuing poll tax debts from 20+ years ago. No doubt there will be a lot of happy people tonight however there are also a lot of unhappy people, Calton amongst them, who don't take out loans they can't hope to repay and who do pay their taxes. If having their payday loans written off made people less likely to get into financial trouble in the future, that would be good, however Calton suspects the reverse will be true. The possibility that your debt will magically disappear due to your lender having their knuckles rapped must surely be an incentive to some people to take out a loan. As for Alex Salmond's poll tax stunt - it is a totally transparent attempt to continue stoking anti-Westminster sentiment and buy left-wing votes. It is also another example of SNP-led Holyrood arrogating local council powers. It should be up to individual councils to decided whether or not it is worth pursuing old debts, bearing in mind that the poll tax non-payment campaign left huge holes in council finances, which meant that those who did pay their dues ended up paying more than they should have done. Now, councils are facing a double whammy of the council tax freeze and a prohibition on recovering poll tax debt and our services are suffering as a result. It's time for Holyrood to butt out of council affairs and the only way to ensure that this happens is to vote out the SNP.

Independent, defenceless and broke

Calton listened to last night's debate rammy on the radio while simultaneously trying to follow it on twitter. Not being very good at multi-tasking, he therefore missed some of the finer points of the argument but he couldn't help noticing the persistent use of the phrase "sovereign will of the Scottish people" and the word "mandate" by Alex Salmond. The First Minister is obviously trying to strengthen his negotiating hand on the currency union he so desires if there is a yes vote. He was also very clear that, if he doesn't get a currency union, he will walk away from Scotland's share of the UK's debt. Now, turning his argument on its head, if an independent Scotland were to refuse to take a share of the debt, what's to stop the rUK hanging on to all the assets? The roar of RAF Typhoons as they pass overhead on their way south over the border would be matched by the cheers from the workforce at Portsmouth and the corresponding wails from Rosyth. Starting life as an independent country with no debt may seem like an attractive option but we would also have no air force, no navy, no embassies, no central bank and just you try getting credit without a credit (i.e. debt) history! Salmond managed to score points off Darling on child poverty but he would have little chance of making a better fist of it in an indy Scotland with no money. In terms of shouting down his opponent, Alex won last night's debate but in terms of providing real and realistic answers, he lost.

Salmond's preening is premature

Is anyone else embarrassed by the First Minister's threats to walk away from the UK's debt if they don't let us keep the £ after independence? Now, he's crowing and preening himself as if he's done something great when, actually, his posturing has threatened to spook the bond markets and has resulted in today's announcement by the UK Treasury that it will guarantee all UK Government debt issued up until the date of independence. Salmond's blinkered brinksmanship in pursuit of his goal of independence is now threatening us all. If the UK Government has to pay more to borrow, we'll all have to pay more to borrow and, since even a small increase in the cost of borrowing at the moment will push many families over the edge, it's no surprise that the Treasury has acted definitively. To do otherwise would have been irresponsible. Would that our First Minister had a similar sense of responsibility to the people he governs. If we vote yes later this year (and Calton sincerely hopes we don't) the road to financial stability as an independent nation will be rocky enough without Salmond's threats and bully-boy antics. He has blown out of the water any hope of an amicable divorce in the wake of a yes vote and we all know what that means - the only winners will be the lawyers!

Heading for the rocks

It really doesn't matter who is right about Scotland's share of the UK's debt because, if we become independent and the SNP remain in power, however low our debt starts out, it will soon go through the roof thanks to the prolific spending policies of the SNP and Scotland's ageing (and unhealthy) population. The worrying thing is that we are going to have to go into the independence referendum not knowing how the UK's debt is going to be divvied up, and Calton, for one, does not have the same confidence as the Deputy First Minister in the strength of Scotland's position. The same goes for the allocation of UK oil and gas revenues. What is clear is that Scotland has benefited over the years from a greater spend per head than the rest of the UK, partly in recognition of the contribution from her oil and gas to the overall UK economy. This is something which does not appear to figure in Sturgeon's calculations and, if Sturgeon thinks that the UK Government has mismanaged the economy over the last 30 years, she should remember that 13 of those years were under the 'spend, spend, spend' Labour Government of Gordon Brown's Chancellorship and Premiership. Even the Labour Party now agree that cuts need to be made but the good ship SNP is still steaming full ahead on the same disastrous course as the Great Broon - straight for the rocks.

No easy answer

The UK is in debt up to its neck and it's predicted to more than double in the next two years. We are in serious shit. We need to either cut spending or raise taxes, or both. We've already tried printing money via quantitative easing and we're still in the shit, plus the value of our savings is being eroded by low interest rates and rising inflation. That's why Calton has little sympathy with those who are protesting against the latest benefit cuts. Our welfare system is bloated and unaffordable. It desperately needs reform, which is going to be painful. What is being ignored in the current arguments is the pain also being suffered by pensioners who see their life savings being eroded by low interest and high inflation. The pain suffered by workers who have not had a pay rise for years, for whom 1% would seem like a dream. Yes, we should be looking after the old, the sick and the vulnerable but we also seem to be looking after a lot of other people who do not fall into those three categories and that has to stop. The under-occupancy reduction in housing benefit needs to have some discretion built into to it for disabled people and for those who can't immediately find a smaller property but we really need to free up larger properties for families on the waiting lists and that seems to be getting forgotten about in all the hoo-ha. There's no easy answer to our nation's problems but one thing is for sure - spending our way out of debt is not an option.

Turning tables on the loan sharks

Calton is very pleased to see that the Westminster Government has agreed to restrict the amount of interest which can be charged on payday loans. In an ideal world this sort of finance would not be needed. As it is, at least some sort of limit will now be imposed on the hitherto eye-watering interest rates charged by payday loan firms, which just served to keep people enslaved to short-term, high-interest credit. All praise to those who have worked hard to bring this legislation into being, including the incoming Archbishop of Canterbury, Justin Welby. It would be nice if he now turned his attention to the soaring energy bills which are forcing people to take payday loans in the first place.

Pot calling kettle black

It's a bit rich of John Swinney to say that it's time the Chancellor George Osborne listened, given the SNP's own poor track record of listening to the electorate. If Swinney and his pals have their way, Scotland will be an independent basket case with a large deficit and a downgraded rating, paying high interest on her debts to fund the SNP's vote-winning handouts, until the EU wades in and tells them to cut spending. As a party, the SNP have realised that Scotland will have to be a member of NATO if she wants to be taken seriously past-independence. Unfortunately, the same maturity is not evident in their approach to government finances. Time to grow up, boys and girls.

France, Greece and Fife

There's an old adage that says when you are in a hole, stop digging. Similarly, when in debt, stop borrowing. That message has not got through to the voters of France and Greece. They have, fairly predictably, voted against austerity. In the same way, the voters in Fife have punished the previous SNP/Libdem coalition for council cuts by swinging to Labour - the party of spend. Never mind where the money is going to come from. It just goes to show that, although democracy is probably the best political system we have, voters will ultimately vote in their own self-interest, which is not necessarily the country's interest. Looks like the Eurozone is in for some stormy times.

Statistical spin

An academic has today claimed that the SNP are cherry-picking the statistics which they use to bolster their case for independence. (An example being John Swinney in his recent David Hume lecture citing figures from before the financial crash to claim that an independent Scotland's debt would be substantially lower than that of the UK now, as if the crash hadn't happened.) Calton is not surprised. Disappointed, yes, but not surprised. Of course the SNP deny the claim. Well they would, wouldn't they! Lies, damned lies and statistics. We are going to see a lot more of all three before Autumn 2014.

The latest suggestion from the loony left

Calton thinks that Professor Brian Ashcroft (Mr Wendy Alexander) is completely off his trolley in suggesting that higher inflation is the answer to our current economic woes. He may be Emeritus Professor of Economics at Strathclyde University but he doesn't seem to have grasped the basic fact that higher inflation encourages people to take on debt and discourages saving, which is what got us into this mess in the first place. It also particularly penalises pensioners, whose savings are eroded, and low paid workers, whose wages do not keep pace with inflation. To suggest that we are all in this together and so savers should be prepared to take the hit while others borrow up to the hilt is not just bonkers - it is downright wicked in Calton's opinion. He sincerely hopes that our politicians treat Professor Ashcroft's suggestions with the contempt they so richly deserve.