Alex Salmond May Be Cheering, but His Cash Crisis Has Only Just Begun

By Blanchflower, David | New Statesman (1996), May 16, 2011 | Go to article overview

Alex Salmond May Be Cheering, but His Cash Crisis Has Only Just Begun


Blanchflower, David, New Statesman (1996)


What an interesting time to be in Scotland. I arrived just after the Scottish National Party's landslide victory in the polls, as the leaders of not one but three opposition parties toppled following their devastating defeat. I was in Edinburgh to address chartered financial analysts at the CFA Institute's annual conference--but first things first. Straight off the plane, I headed to Gullane No 2, for a serious discussion of economics and an incidental 18 holes with my co author Professor David Bell from the University of Stirling.

It was beautiful weather for a while, but inevitably I had to spend half an hour sheltering in a gorse bush as a rainstorm charged across the golf course. I was four holes up with six to go, but lost as my energy ebbed away--well, that's my excuse and I'm sticking to it. Fortunately, we forgot to talk about economics, even when ensconced in the bush.

Back in the city, though, there was no escape. The SNP leader, Alex Salmond, seems to have conducted a fine campaign, but his economic problems as First Minister are only just beginning. The unemployment rate in Scotland, which stands at 8.1 per cent, is already higher than the UK rate of 7.8 per cent. And in 2010, according to the Halifax, house prices rose in every part of Britain except Scotland, where they fell by 2.9 per cent compared to an overall increase of 2.7 per cent.

Adding up the bill

Among the numerous economic worries that Salmond will have to deal with is how to fund his party's promise to maintain free tuition for Scottish students at Scottish universities. His options include reducing the number of students, closing universities or doing a U-turn.

I still find it hard to understand why it is appropriate to make those who do not go to university pay for those who do, even though those who do are the ones who accrue almost all of the benefits. It seems simple to me: those who cannot afford to pay should be subsidised, but those who can afford to pay should do so.

A difficulty for Salmond is that, right now, Holyrood has no power to raise taxes or to borrow. He hopes that the Scotland Bill, still being debated at Westminster, will provide it with such powers--but that won't be an end to his problems. He is going to have to decide on a set of policies that will generate growth and jobs. A first step, if the bill finally delivers what Salmond wants (which seems likely following the landslide vote), would be to lower corporate tax rates in order to encourage investment and jobs, and to hope that revenues increase as a result.

It would also make sense, surely, for the Scottish government to borrow in order to fund investment projects such as offshore wind-power or even nuclear, though the latter looks controversial again, given the ongoing crisis at Japan's Fukushima nuclear plant. One sensible scheme would be to share the cost of an under sea cable to Iceland, which lies about 725 miles north of the Shetland Islands, to enable the Scots to tap into that country's vast and potentially cheap thermal-energy resources. This would likely be a hugely profitable investment, as the Scottish government will be able to borrow on world markets at historically low long-term rates of interest.

More controversial is the question over the oil and gas resources in the North Sea, which the Scots could claim belong to them. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Alex Salmond May Be Cheering, but His Cash Crisis Has Only Just Begun
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.