How much has/will the banking crisis cost

Banking reform is being stalled, Cameron is on the side of the banks. Bank bonuses continue to be paid. As usual in Westminster, there’s not a lot anyone seems able to do.

There have been some interesting revelations on the banking/credit crisis though.

This is a crisis that was portrayed as almost toppling a government and that would have bankrupted Scotland many times over.

Pure, unadulterated hype.

The Guardian recently asked the Treasury some very pointed questions. The most pointed of all is the simplest of all.

How much will the bank bailout cost the taxpayer?

The Treasury response was reported to be somewhat limited, to a single word in fact. 

“Nothing”.

How foolish does that leave Scotland’s mainstream media looking. They should be in such a state of embarrassment they are collectively beating a path to the SNP party headquarters bearing gifts of apology and promising Salmond only “good copy” for the next quarter.

Not happening, I suppose any form of media contrition was too much to hope for in what passes as investigative journalism in Scotland these days. Salmond himself with the “good copy” promise above would possibly have just asked for corrections to be printed and future balanced reporting.

I’m an optimistic realist, I’d love to see it, won’t hold my breath.

Owning up to such rubbish as was spouted at the Scots nation from 2007 through 2010 would destroy what little credibility the MSM has in some quarters of Scots society with regards to political reporting.

I must personally acknowledge that I believe the only quarter the MSM in Scotland have any credibility in the political reporting world is with those more or less politically detached or fully disengaged.

Circling the wagons back to the Treasury’s “nothing” statement, we need to look at what’s behind that statement.

After all the original cost quoted was in the region of £850 billion. The Treasury finally “committed” around £1.2 trillion to bailouts.

These were the numbers rammed down our throats, but the key word is “committed”, that’s just a promise to pay.

In actual fact it’s highly questionable that the Treasury could have borrowed that much money. It’s probably as well that particular issue wasn’t put to the test.

There have been two reviews since by the Treasury – each has lowered this potential liability.

In its simplest terms that ~£1.2 trillion was what the treasury was on the hook for if everything went unbelievably, worst case scenario, totally pear shaped. Literally “every insured asset” would need to burn to the ground.

The treasury was a bit like the insurer underwriting your house. As long as the house isn’t a total loss, the full amount will never be asked for in compensation.

In reality the treasury hasn’t had to do much more than fix a roof and pop in a couple of supports here and there to make certain the house doesn’t settle any further.

However, that isn’t exactly how it was sold to the Scots and regurgitated by the MSM without checking the facts and numbers.

The Treasury’s ~£1.2 trillion dropped, to £955 billion then a little over £500 billion.

So much for the liability, but how much cash did the Treasury actually have to borrow to bail out the banks – the Treasury didn’t have any liquid assets of its own to pump into the banks after all. 

The Treasury is broke – it operates in the red.

The answer was a surprisingly small amount; just about 10% of what the MSM constantly fed the Scottish nation was the liability it couldn’t possibly afford. So far the cost has been ~£125 billion.

How can ~£125 billion equal nothing?

The government didn’t provide this insurance at no charge – so far it’s raked in almost £10 billion in charges from the banks, and hasn’t actually had to make any type of significant payout in its “insured liabilities”.

The money spent wasn’t just “given” to the banks – the government got “equity” or ownership. The treasury acted like any investor, although a fairly benevolent one, and made an investment. It bought shares in the banks. It took over other banks.

Those share prices will eventually recover, the shares will be sold, the money comes back. In the best case it comes back at a substantial profit.

In the case of English institutions like Northern Rock and B&B, they’ll hold onto the investments. As the mortgages are paid or defaulted the government gets its money, in spades. The government doesn’t just get the bare B of E rate – it gets full mortgage interest rate.

In many cases in this dis-United Kingdom if you have a mortgage, Whitehall is now the ultimate holder.

The Treasury therefore acknowledges the “Scottish Banks” are more a short to mid-term investment which it anticipates realizing a substantial profit from. The “English” banks are more of a longer term investment, but it still anticipates earning substantial funds from these also.

In its plainest, simplest terms, the treasury simply bought up the mortgage on your house, and as long as you kept paying there’s no issue whatsoever. If you don’t keep paying they sell the house. They keep the proceeds. It will almost never be a “total loss” and more often than not has a very good potential to turn a substantial profit. At worst they have to eat the difference and some admin costs.

The potential losses the treasury, and therefore you underwrote on your own house should be minimal – it will always have value, and even if that value is depressed for a while it will eventually rise again.

Meantime by various means the treasury rakes in the interest payments and bank fees.

In today’s market the total government investment is down some 10%, but while many of its individual investments may be down in share price, their parent companies are now operating back in the black. When any company is in the black the share prices usually recover. As the treasury bought these shares at depressed prices, the mid to long term increase has every potential of being substantial.

The full scenario is substantially more detailed, but the above in its most basic form is what now requires the treasury to give the answer to the question “what did/will the banking crisis ultimately cost the taxpayer”.

“Nothing”

Think about it, and think about the three years of lying propaganda that Scotland endured from the Scottish Office, her political parties (SNP exempt) and her mainstream media.  

Help. There’s been a terrible accident.

Except this one didn’t involve rolling paint onto a wall. Unless the roller was loaded with golden yellow paint and the canvas was the political map of Scotland.

The “terrible accident” was the unmitigated disaster of a poll sprung on the Union parties on May 5th 2011, when they were effectively walloped by a Scots electorate wielding said bucket of golden yellow paint. Hat tip to "Chewin the Fat".

This “terrible accident” called for an inquest to be held over the bodies of the prostrate. Three union leaders fell from the swing of a single aggravated Scots poll.

The Lib-Dems were first to recover, they rallied around Rennies rhetoric as he grabbed the threads of party power following Tavish’s Poll-Axing. No big investigation, no thorough soul searching by the Lib-Dems, forget any major policy changes.

The Lib-Dems know what Scots want and it was a new head for the chopping block. Judging by Mr. Rennies current approval ratings it would be hard to credit the axe isn’t already being sharpened at Westminster.

Unless that is Westminster simply needs a yes man, place holder type of unionist to spout what could be described as often apparent drivel while he leads his insubstantial cohort of four fellow MSP’s “over the top” into the waiting political oblivion.

The Labour and Conservative Holyrood group leaders also fell on their swords, they just stuck the pointed end in the ground first so it wasn’t too painful. Both agreed to simply fade away after a review and make way for the election of a new leader.

At least these parties appeared to be taking their poll-axing a little more seriously than the Lib-Dems. We were going to be treated to reviews.

From out of nowhere into the middle of this process jumped Murdo Fraser. The doughty Tory charged into the breach with a stated need to walk his party along the path of the dodo – he’d lead the charge to extinction. It might have been easier just to copy Willie Rennie’s tactics.

Cameron kept mum as Murdo fired his broadside. Murdo’s problem started when he discovered the bit of the party that didn’t want to die was the bit of the party that held the purse. Help – there’s been a terrible accident.

The Tories were possibly first to the punch with their review, they did need something to plug into the gaping hole of the party’s “united” front that Murdo had seemingly left in his wake.

The Scottish Conservatives have apparently quietly put a knife through the heart of their old constitutional ways and walked on. Not a backward glance or apparent tear for the now discarded body of the deceased party constitution. The review was in, and a new constitution is approved.

At least in Scotland. The rest of the party may yet have input. Perhaps it will yet have a “terrible accident”.

It says the party should have a Scottish leader with overall responsibility for the party's performance north of the border, but wasn’t that how the media sold “auntie” Annie?

The fresh constitution was first put on the table at last year's Sanderson review, it was ratified at a special conference in Perth on Saturday.

The review commission was set up after the May 2010 general election, which saw the Tories in Scotland poll some 80,000 fewer votes than 1997, when the party lost all its MPs. I need to understand this, they polled less under the same system, and we get David Mundell. Help – there’s been a terrible accident.

The Tory enquiry highlighted the party had a UK leader, David Cameron, a Scottish parliamentary leader, as well as a chairman and other leading figures. It didn’t go into significant finger pointing, but the tone was to make a clear differentiation between Westminster and Holyrood.

To enable this to take place the commission’s recommended there should be a "distinct political leader of the Scottish Conservative Party - the Scottish leader, who should be held responsible for the Scottish Conservatives' performance". This call has now been backed by the party membership.

But wasn’t that what caused “Auntie” Annie’s demise.

Tory Spokesman Andrew Fulton went on the record afterwards: "I am delighted that the party has been able to take the events started by the establishment of the Sanderson Review through to a highly satisfactory conclusion”. No spin so far.

"It reflects well on the thorough process and work undertaken by the commission, which has today been overwhelmingly endorsed by the wider party membership”.

"These are exciting times for the Scottish Conservatives. Now we can look ahead to a hard fought and inspiring leadership campaign between three excellent candidates, giving all our members the chance to compare and contrast and reach their own decision about the future direction of the party."

In the preliminary analysis, what the Conservatives have agreed to do is to follow a review that took place before they had their “second” terrible accident in a year. They didn’t update it as a result of the May poll-axing they got. Policy changes? Nope, none mentioned. Re-Branding, listening to the electorate. Not apparently. Almost everything I saw was for internal reference.

Perhaps the Tories voting for Mr. Fraser would be the best thing after all. A quick “Murdo” is probably far more preferable to a lingering demise.

Meanwhile, over in the greenhouse of the Red Rose the review that was initially instigated after the 2011 disaster was producing results. Maybe.

It has at least resulted in Jim Murphy and Sarah Boyack proposing reforms, described as the “largest package of reforms to the Scottish Labour Party in living memory”.

That would be referring to the long gone day that they decided to stop supporting Scottish independence perhaps and chase the ermine path instead.

These reforms, if carried out, will see the first-ever Scottish Labour Leader in their post by 17 December.

But wait a minute – wasn’t that how Iain Gray was billed by the media – and the whole procession before him. That’ll soon be a nice half dozen in just Alex Salmond’s present tenure. Now though we’ll be getting a “real” Labour Leader instead of just a kid-on one.

Should we give our best wishes to this new incumbent, so that within another few months no one will be standing meekly looking at their then empty chair and uttering the phrase “help – there’s been a terrible accident”.

Labour after all seem to be having a hard time getting heads to pop up from behind the parapet to consider taking the job.

After the proposals were unanimously passed by the Scottish Executive Committee in John Smith House today the next step will be to have them be debated at UK party conference in September and a special Scottish Labour Party conference in Scotland on the 29th of October.

If it all works out they might just be ready for a Halloween party, perhaps they’ll paint the town red. No, best stay away from paint cans, help..

If agreement does happen, the party is basically going to “Murdo” itself. It’ll be an almost federal set up, rather like that proposed by Mr. Fraser for the Tories. One wonders if he got a sneak peek at what Labour are planning, and just threw in a name change to tart it up a bit? For those with an interest, here’s what’s planned.

1. Create, for the first time, an elected Leader of the Scottish Labour Party

2. Open that position to all Labour parliamentarians elected in Scotland, provided they commit to seek election as an MSP and First Minister

3. Fully devolve the Scottish Labour Party in all Scottish matters, including the rules for the Scottish Leadership election, local government processes and selections, and Scottish parliament selections

4. Begin the process of restructuring local parties in Scotland on the basis of Scottish Parliament seats, not Westminster seats

5. Establish a political strategy board, meeting weekly, to develop and co-ordinate political strategy with the Leader, Shadow Secretary of State, the leader of the COSLA Labour Group, the party chair, and the Scottish General Secretary

6. Establish a new political base in Edinburgh


Apparently these proposals from the review were given the backing of the party's Scottish Executive Committee today.

Unlike myself, the Labour apparatchiks seem quite excited by what’s been accomplished. I’m not, they’re proposing autonomy for Labour while saying Scotland’s not good enough to run her own affairs – a bit of a quandary.

Ms. Jamieson, who chaired the meeting today stated "These proposals were unanimously agreed today by the Scottish Executive Committee and represent a significant change in the way the party is organised in Scotland. I think members will be pleased that the changes are both significant and radical, and they will set us on the path of winning again."

Sarah Boyack chipped in with "Labour devolved Scotland when we set up the Scottish Parliament in 1999, and we are proud of that. Labour used that Scottish Parliament to deliver important reforms for Scotland, but we didn’t reform ourselves. Now we need to make devolution a reality within our party too.

"This is a radical package of changes to beef up the role of the Scottish Leader and put us on the path to winning. We won well in 2010, but we lost badly in 2011. That means we have to change and the status quo is not an option.”

Jim Murphy’s tuppence was "This is about turning the Scottish Labour Party into Scotland’s Labour Party.

"Today we are completing the devolution of the Scottish Labour Party. From now on, whatever is devolved to the Scottish Parliament will be devolved to the Scottish Labour Party”. Why not vice versa Mr. Murphy?

"Structures in themselves don’t win us elections, but this, the biggest change for 90 years, marks a fresh start for the Scottish Labour Party. People lost faith with us because we lost connection with them. Scotland has changed and now it’s time for Scottish Labour to change too.

"For the last three months we have listened to hundreds of views, taken thousands of pages of evidence, asked civic Scotland for advice, and thought long and hard how to reform the party we love. Our task is to make our party for all of Scotland again, for all our people, all our cities, towns and villages.

"This new structure gives us a new unity and a new strength."

The reason I’m less than impressed by the Liberal Democrat, Tory or Labour reactions to their unforeseen pole-axing is simple. I’ve read every one of the responses, every one of the action plans. Almost entirely and without fail they talk of the party, the good of the party, the party structure, devolution within the party.

What about the Scottish people, because until they really truly get that simple fact, well in 2016 they’ll be looking at each other once again over the bodies of their recently incumbent leaders with a blank expression still glued to their faces.

Help – there’s been a terrible accident.

When in reality there was no accident at all and the saddest part of all is that Scotland needs a healthy coherent opposition, an opposition that starts by putting the Scottish people before the party.

Should the Union Flag be banned in Scotland?

That, in a limited fashion, is a conclusion that logical thought appears to direct us to after a scrutiny of Paul McBride QC’s recent statements as reported in national mainstream media.

The basis of Mr. McBride’s statements was that the Union was a significant moderating force for sectarianism.

This question of banning of the Union Flag seems to be a very serious issue that that arises from a slightly more than cursory examination of the facts behind McBride’s recent article in the Scotsman, and the proposals of the new SG legislation.

Perhaps in light of both of these issues, it’s one we should all ask and examine deeply the impact Unionism and its symbols has on daily life in our nation.

At the very least we should ask if a limited ban on the Union flag could be stated as desirable as it is, based upon the surface evidence available, in certain circumstances clearly both divisive and sectarian. It would therefore appear to fall under the scope and remit of the proposed new law and give direct and contrary evidence to Mr. McBride’s assertions.

QC McBride has claimed that the influences of the rest of the UK are preventing a more extreme form of bigotry in Scotland. Mr McBride is closely affiliated with Glasgow Celtic football club. Glasgow Celtic and Glasgow Rangers are perhaps recognized as wellsprings of this bigotry and sectarianism issue. If a lesser term than wellspring is desired, both clubs are at least acknowledged in many areas as a substantial focus for sectarianism.

When anyone so closely affiliated to either club speaks to the nation, by way of the currently mainstream press, on such a significant issue we should listen. We should also verify.

Furthermore, we should dissect and ascertain fact from fiction, opinion from probable reality. If they speak from fact and a basis of likely reality, also offering solutions then they should be lauded. If not they should be ridiculed and identified in many cases as part of the problem.

With the acknowledged common undercurrent of sectarianism in Scotland most prevalent in the public perception through its association with Parkhead and Ibrox football parks, one would expect Mr. McBride would have a good level of insight on the subject.

In addition, with Mr McBride being a QC one would expect an argument based on logic and fact. Both seemed absent, on the surface at least.

One would further expect McBride’s insight to be accurate, unbiased and informative; he has after all represented both Rangers and Celtic football clubs at various times, and by all accounts represented them well. Balancing this however are his outspoken remarks against the Scottish FA which subsequently required what could only be perceived by many as a rather humbling and credibility damaging apology.

It was of interest then to see which Paul McBride spoke the ant-independence diatribe, appearing designed to induce fear into many of a potentially minority persuasion, almost coerce them into “going status quo” in any Independence referendum.

Was it the careful considered respected QC or was it the individual who can seemingly engage mouth before brain. Both do appear to inhabit the same body. I had thought Mr McBride’s SFA comments requiring severe backtracking to perhaps be an aberration.

It was therefore interesting to read his account in the Scotsman newspaper, where he claims that sectarianism would “blossom” in an independent Scotland.

This one time Tory advisor and former Labourite also claimed that an independent Scotland could have “serious” implications for Catholics, who he said should have “concerns” about independence. I’ve read most of the SNP documents and have yet to even perceive anything I would describe as “anti catholic” bigoted or sectarian.

With these contradictions self evident it’s appropriate to further examine Mr. McBride’s claims.

For the purpose of this examination we’ll primarily limit the scope to football/sectarianism, and give a cursory look at “future implications for Catholics” as these are areas where Mr. McBride possibly has an “inside track” through his prominent position in Scottish public life.

They are certainly areas upon which QC McBride professes opinions.

Sectarianism is generally acknowledged in media reports as being most prevalent around the “old firm”, some Rangers and Celtic fans being noted and generally accepted as the worst offenders.

Sectarianism and bigotry is also not a situation normally associated with our national team, and although it’s quite possible there have been incidents, I couldn’t find any in half a day of searching that did not include references to individual clubs rather than just the National squad.

I performed a “Google” search, “* football club sectarianism”, simply replacing “*” with premier league club names.

Rangers and sectarian brought up 371,000 hits. The same search for Celtic displayed 146,000 hits.

Delving deeper, many of Celtic’s hits were simple sheer ignorance and lack of respect for those who died to give them the freedom to sing. I refer to disturbing a Remembrance Day minute of silence with sectarian chants.

This is where the base research diverged from maximum hit numbers – I’d expected to see Rangers and Celtic at the top of the list with the others propping it up.

Surprisingly Hearts came in strongly behind Rangers at a “mere” ¼ million hits – however the most substantial proportion of these had references to Celtic and Rangers. Ditto for Inverness Caley who appeared to prop up the group at about 63,000 hits, and whom I can’t personally recall being called Sectarian.

When references to Rangers or Celtic were excluded from searches, hits for both Hearts and Inverness Caley dropped more to the levels anticipated, which was a small fraction of the original ¼ million in Hearts case.

This exclusion of references to Rangers and Celtic put Hearts and other teams more where popular consensus might have them in the commonly perceived “most sectarian pecking order”. In fact they grouped rather nicely by region, with West Central teams topping the list, East Central teams lagging quite a bit behind and the remainder propping up these two groups.

Looking quickly over the search results two items became self evident, although the sectarian/bigotry/prejudice problem is IN Scotland, it is not specifically OF Scotland. The Celtic hits were festooned with references to Ireland and the Rangers hits were similarly adorned with references to the UK Union, in both cases most specifically centred on flags, music and religion.

Old Firm Match photos: Rangers top, Celtic below.

o the problem appears to be in Scotland but substantially rooted in ties to both the Union and Ireland. The obvious solution appears to present itself, break these links, the problem will reduce, perhaps in time eliminate.

This may be rather simplistic, but primary appearances are that the Union itself, its symbols and the inherent opposition to those symbols in sections of our society are a root cause and fostering agent of sectarianism and bigotry in Scotland.

Absent the Union issues to rail against, energies expended on the Irish tricolour might appear rather wasted.

After Ranger’s and Celtic were consistently included, referenced and referred to in the vast majority of sectarian hits recorded, I went to their journals and cruised their online pages.

On Celtic’s pages my search picked up a club affiliated article built around the sectarianism issue, and highlighted in picture 1.

That took my search in a new direction; it was suggested without more input to look at that picture, and look for anything that’s out of place. At first to me it was just a picture of old firm fans at an old firm game. I was directed to look independently at pictures of the crowds from an Inverness or Aberdeen game, and for comparison a Scotland game.

Scotland International match.

After examining the pictures side by side, only two here for simplicity, the aforementioned picture 1 and also now picture 2 taken at a Scotland game the stark realization is stunning.

Why are the flags of another nation being flown in Scotland at a domestic sporting event?

These symbols appear quite literally “designed to incite and antagonise the opposing fan base”.

I looked at several crowd scenes of domestic matches in England, I failed to see a Saltire flying. I had no luck finding one in Ireland’s domestic fixtures either. I even looked into rugby and curling in these countries. Nope, no Saltires proudly waving, not even one flag that could be construed as a Saltire hanging limply. England and the Irish republic apparently have little use for another country’s flag at their domestic events.

At the Scottish national games it’s very hard to see anything other than a sea of Saltires, perhaps interspersed with the odd rampant lion. The presence of Union flags or the Irish Tricolour at a Scottish national event would now be as likely as a primary school team winning the Scottish cup.

While the odd arrest for inappropriate behaviour continues at most international matches it certainly appears sectarianism and bigotry at the Scotland games is very hard to find, ditto for games in Ireland and England. It’s also very hard to find Union flags prominently displayed in the Republic of Ireland or Saltires in England.

Rioting Rangers fans

I took it one step farther. I “Googled” police arrest pictures from the relatively recent UEFA cup [Glasgow Rangers v Zenit St Petersburg] post match riots in Manchester. Again although not exclusively, they were predominantly featuring the Union undercurrent, in one it could be said even down to the underwear [in pictures 3 and 4] of the Glasgow Rangers support.

Even down to their underwear

This Glasgow team was not representing the UK, it was representing Scotland, and these supporters happily gave the impression to the world that they are not Scots, but English troublemakers misbehaving in England. For the Union flag is almost universally associated with England. Personal experience as I’ve travelled dictates that fact to me.

I freely acknowledge this as a very cursory overview performed in response to Paul McBride’s comments, and that under the respective umbrellas of both clubs there are a great many good and genuine people who are sadly tarred with what is the cloying sectarian and bigoted brush of the few.

These observations do however contain factual evidence and acknowledged issues apparently sadly missing from the foundation of Mr. McBride’s assertions.

The result of this cursory view of QC McBride’s article would appear that his opinion that racism, prejudice or sectarianism would be worse without the Union is just that, it’s an opinion, and an opinion built on potentially very loose foundations.

For a QC who is trained to deal in facts and evidence it appears to me a surprisingly ill informed opinion that lacked any readily apparent facts or references.

In fact when his opinion is contrasted with the stated all inclusive policy of the SNP against Westminster’s still decidedly anti-catholic stance, referencing not least monarchical succession – it’s plain Unionist, scaremongering, potentially panic inciting sectarian rubbish. It’s eminently arguable under proposed SNP inclusive policies that all minorities will be far better enfranchised in a Sovereign Scotland.

Advancing on the above, with the disrepute that this issue brings to the use of the Union flag, and its possible inappropriateness at sporting events not UK represented, coupled to the obvious sectarianism and racist undertones within which it’s apparently perceived in these circumstances, is there not a very sound case for banning the Union flag from purely domestic sporting events inside Scotland. Ditto the Irish Tricolour / Red Hand of Ulster.

A cursory review of the proposed legislation would certainly allow that interpretation. Perhaps the Union Flag requires a special section in the legislation, where it is either included or excluded specifically from it. Either/or, the situation does not bode well for international perception of that symbol, yet is it a place where we can afford ambiguity?

If racist songs should be banned, real or perceived, along with racist acts, why should the ban not extend to racist symbols, real or perceived – the proposed legislation can be interpreted that way.

It is a very credible argument that waving a Union Flag or Irish Tricolour, even the Red-Hand flag of Ulster at a Scottish domestic sporting event is a provocative act.

Then again the afterthought occurs, with this seemingly apparent level of Unionism and establishment entrenchment in the Scots legal profession is it any wonder that this self same legal profession has the potential of being viewed as more than somewhat assisting, perhaps very culpably assisting in a drive to bring disrepute to Scots law and thereby engineer its own very premature demise or abrogation. Many of its members have benefitted substantially from said Union after all.

Perhaps the upstanding senior officers of Scots law whose representatives first reportedly sold their votes to the Union in 1706 still prefer the ermine path of potential personal gratification to the alternate of freedom and self determination for their fellow countrymen. If this were proven fact rather than circumstantial supposition much could possibly be explained around Scots laws ongoing conundrums.