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The truths they don't want you to read....

Friday, October 31, 2008

Comhairle power struggle

I think that the Council have done the best in adverse circumstances (that they created!) by giving the Vice-Convener the political authority over the Council and relegating the Convener to a ceremonial role; rather than creating an additional post of Civic Head.

BUT, and it is a big but, as part of the problem was the perceived lack of leadership from the Chair during debates - for instance, over school closures - is the Vice-Convener going to chair the Council meetings and provide that leadership, or is this just a case of a cosmetic change?

Or is the Convener going to have to act as instructed by the Vice-Convener in these matters? Which is a recipe for confusion and disagreement.

And, whilst have have a huge amount of respect for Angus Campbell working almost full-time as Vice-Convener trying to manage the Comhairle's finances (and speaking as a former insider, he is doing a fine job in exceptionally difficult circumstances), he now has the added responsibility of herding cats into the appropriate decisions. This breadth of control could easily be misused by a less scrupulous individual to make the Comhairle their personal fiefdom, and the extent of control must be reduced before the next elections.

(And I need only remind people of the appalling situation that prevailed not that many years ago, when power was too centralised; which was one of the key impetuses in persuading me to stand for the Council)

As an aside, I would expect the schools debate to be re-opened, and I will confidently predict another U-turn. Which will make - how many? - 6 or is it 7?

The solution works, temporarily, and depending upon the current Vice-Convener remaining in post, but a long term solution needs to be brought forward soon.

Wednesday, October 29, 2008

"Spivs and speculators"

Despite the opprobrium dumped on them by Alex Salmond, I've previous described the short-sellers as gamblers, and pointed out that they can only be gambling on the price of a share falling if others are gambling on the price of a share not falling.

It is with a smug, self-satisfied look upon my face that I read the headline: "Hedge funds make £18bn loss on VW", and the suggestion that some hedge funds might go bust as a result.

The higher the return, the higher the risk; and sometimes it goes wrong.

The BBC explains the convoluted dealings that caused the hedge funds to get burned, and Porsche to make a huge profit....
What is upsetting the hedge funds is that if between 10% and 15% of VW shares were on loan to be shorted and only just over 5% were available in the market, it is likely that many of the funds that shorted VW had borrowed the shares from Porsche.

It meant that because Porsche had not declared the proportion of VW shares it controlled, traders may have been indirectly and inadvertently borrowing shares from Porsche, selling them to Porsche, buying them back from Porsche and then returning them to Porsche.

Greed meant they overlooked the basic principle of caveat emptor, and I don't think anyone will be shedding tears for them.

The American way....

A blog posting from the roving Berneray librarian - who is currently in the US of A covering the Presidential elections for Am Paipear - throws up an interesting suggestion....

Why not have referenda aka propositions, to determine spending priorities? Will you vote for Gaelic education or street lights?

Apart from the obvious "Do you want to remove X as a Councillor?", do readers have any suggestions about what other voting choices should we have?

Monday, October 27, 2008

Power struggle at Council...

...according to a report on Hebrides News.

Apologies to my former colleagues, but at the moment I think most of the public would like to see them struggling with 240 volts through their seat, rather than some self-absorbed battle over whether power is vested in the Convener or a new post of Council Leader.

If you think that the current Convener has done a poor job, then get rid of him by standing up to be counted, and expressing in simple phrases that you cannot continue to give him his support.

Don't think that you can solve the problems by creating a new expense account to match the title and hence giving the Councillors the opportunity to avoid difficult decisions.

Avoiding difficult decisions is the root cause of this problem, and too many Councillors will always avoid saying or doing anything 'difficult', preferring to make vague and empty statements for the benefit of their constituents.

Find your backbones and make it clear - back the Convener or sack him. These are your options; anything else just makes it worse.

I swore I'd never say it, but it wasn't like this in my day

Subsea Cable

I am becoming more concerned about the impact of the proposed sub-sea cable from Gravir to Dundonnell, and the impact it is going to have on the community.

I always knew that the infrastructure was going to be potentially much more difficult to sell to the public, compared to the turbines themselves. And we all know just how difficult that has proven to be.

Like many of my colleagues in the Council, I expected the cabling landing point to be at Arnish, where an existing power station could have been upgraded to manage the electricity flows on and off island.

The original proposals for the Eishken windfarm had pylons running from Pairc to Arnish, and the indicative schematics provoked a fair degree of shock at the time. The pylons were not part of the actual planning application, and consequently could not be brought into the equation when the decision to grant/refuse planning permission was being considered. I did warn at the time that the power connections were likely to prove unacceptable, and that was looking at what we thought would be the plan.

Having had a long hard look at what is being proposed, I cannot see how it can be accepted as it stands by the planners, the community or the Council, and I hope that some very serious modifications to the proposals are enforced and agreed before it comes up for a decision, but the track record is not good.

My most serious concern is the proximity of the cables to houses, and I would hope that a distance of at least 500m would be enforced. (I stand to be corrected on this figure, but it is the distance that I think I remember being recommended for the LWP scheme).

Of course, if all the proposals are called in by the Government and then refused then it is all academic. Speaking recently to two people with differing views on the Eishken proposal, the supporter was worried about it being refused and the opponent was worried about it being approved. Whichever camp you are in, I am sure that you will agree that the community need decisions, and need them soon, to let us know just what is going to happen in Gravir.

Update 28/10: Last night I received a letter from SSE (addressed to Cllr Angus Nicolson!) inviting me to get more information about their proposals. I shall be taking them up on their offer, and will report back in due course.

Friday, October 24, 2008

Lighthouse Caledonia

The more I look into the situation at Lighthouse Caledonia, the more confused I have become.

I have come across some company documents that seem to confirm the following:
  • The losses were not just forecast, but were as expected by analysts
  • There were no issues about hygiene or the work environment in Stornoway highlighted to the board (the one hygiene issue relating to Russia was flagged as nonsense)
  • The long-term profitability of Stornoway was not in doubt
  • There are no suggestions of any threat to the Stornoway operation, until very recently
I confess to being confused to what is going on, and I want to read the documents more carefully before making them publicly available.

My immediate gut feeling is that either there is another major issue looming behind the scenes that we are not aware about, or this is some kind of 'shroud waving' in a desperate effort to get some kind of grant support for the business.

More to follow over the weekend.....and if anyone has any further internal documents that can shed light on the matter, I'd be most grateful.

(Update 29/10: The dreaded lurgie has been rampaging through the house, and I haven't been well enough to finish reading all the material I intend to post)

Wednesday, October 22, 2008

School closures - will this ever end?

Few pupils. Soaring costs. Rationalisation.

It was all supposed to start with the secondary schools, which would lead the way for the primary schools to be rationalised.

This was working quite well, until Councillors got involved and decided to forget strategic vision for the islands and concentrated on getting re-elected.

The holes in the budgets are getting bigger - much, much bigger - and the indecision is only delaying and exacerbating the size of the problems that need to be resolved.

I am told that at least 19 of the 38 primaries will be recommended for closure, and that it is expected that the vast majority will close in this round, with any that are 'saved' being reconsidered in not more that five years.

The full extent of the problems in providing education will become apparent when the school rolls for 2008/09 are published by the Comhairle.

Will the Scottish Government set in to delay closure of small primaries?Trimisgary school

Does that matter in the long run? No.

With insufficient pupils to support the education system, how can the schools stay open? How long before they all go they way of multitude of old derelict schools spread across the islands?

How many pupils were in your class when you started school? And how many were in the same school with your children - if you have any?

This is why Cllr Angus McCormack is right to raise the fundamental questions about the provision of education in the islands, and particularly the trade off between education and other alternatives in the capital (and revenue) programs of the Council for the coming years.

I don't entirely agree with Cllr McCormack (but I think he is less wrong than most of the others!) but he is prepared to raise the issues that the rest want to see ignored or brushed under the carpet and he deserves credit for that.

Education above all else? Or are thee other equally/more meritorious options for the islands?


As a student I remember receiving regular cylindrical food parcels from my mother.

Unfortunately, my bed was nearest the front door and the postman used to arrive before 8am and ring the bell repeatedly until someone - i.e. me! - used to crawl to the door and receive the lovingly wrapped black pudding, which kept me and my flatmates in food for days.

I was delighted to see that there is a campaign to protect the brand of 'Stornoway Black Pudding' to put us on a par with Parma Ham, Champagne or Melton Mowbray pies.

Are there any other local products that could benefit from such protection?


Everyone who has ever failed a maths exam now has an excuse for their failure.

Apparently, the 'average' in the Western Isles differs from the 'average' everywhere else.

At least according to Angus 'Mensa' MacNeil, our illustrious MP, that is the case that he tried to make to the Office of Fair Trading.

Now let's get this right: the issue of fuel pricing is a matter of great concern on the island, and one that has been pursued by many elected representatives over many years. Not many members of the public in the islands believe the excuses of the oil companies (and the attempts to pillory the local retailers as easy targets were appalling) over the pricing of petrol.

But to blame the academic discipline of mathematics for the pricing failures is certainly a new approach.

I read the news report and laughed. I read it again, and despaired.

It is utterly incomprehensible to try to build a case for predatory pricing on the basis of the use of two different methods of determining pricing, which generally reflect the purchase price.

There is no overall difference between a monthly moving average (arithmetic mean) and a two-day moving average (arithmetic mean). And if Mr MacNeil believes otherwise then he deserves all the ridicule he gets.

There is a difference in the rate of change: but in the real world resellers tend to price on the basis of the goods they are supplied with, not with some kind of average price. In Mr MacNeil fantasy world I assume that crofters will now have to sell lambs at some kind of average price for the season, and not a price based on supply and demand to ensure that the price paid by the customers in the butchers doesn't vary week to week.

Of course not. But that lack of insight is part of the problem.

On the exact same basis, calls by Mr MacNeil for a fuel duty regulator have ceased, as the price of fuel starts to drop - as I pointed out - for such a plan would slow the price fall. But, thinking through policies seems to be a problem.....

Tuesday, October 21, 2008

In the spirit of openness.....

New Cal Mac ferryI have to confess to spending the past two weeks on the yacht of Mr Oleg Deripaska, as we cruised around Corfu looking for politicians to bribe.

Most of the two weeks on board the "Queen K" were spent trying to find my way from the quarters on the fourth floor below sea level to the sunlight.

Mr Dupiaza and I did not discuss the donation he has made towards my soon-to-be-announced campaign to become MP, MSP & First Minister, which I solicited only after much grovelling.

Olga and I spent some time together discussing our plans for global domination. We did so whilst spending a lazy afternoon this weekend hunting an almost mythical oleaginous forked-tongue lizard on the beaches of Corfu - known as Mandelson of Hartlepool - which we duly barbecued and ate with our respective families.

As we were leaving today, Mr Dysentery told me that he and Nat were off to shoot an Osbourne.

Apparently, I can borrow the yacht the next time he is in Lewis.

Sunday, October 19, 2008

HBOS, Scotland and finance

The 'spivs and speculators' who engage in short-selling are no more.

Those who Alex Salmond accused of bringing down the Bank of Scotland have been replaced by 'the unregulated derivatives market' as the primary cause of the troubles in HBOS and the RBS.

Unfortunately, one lot of economic illiteracy has been replaced by another in the desperate search for a scapegoat to blame for the unfolding catastrophe.

The bank are in the shit because they engaged in 'trendy' financial techniques and bought assets that they couldn't value for an excessive sum, whilst ignoring their day-to-day customers. It is called bad business. And companies go bust for this reason every day.

No-one (including the bankers) really understood what they were doing. Witness Alex Salmond praising both HBOS and RBS recently, when in fact they were sitting on piles of toxic debt.

The cause of Scottish Independence has been put back by the misreading and mishandling of this crisis, and because of two simple policy omissions by the SNP:

  • The absence of any Scottish 'Central Bank' post-independence would lead to reliance on either the Bank of England or the EU to perform that function; removing effective economic control in difficult circumstances from Scotland

  • The absence of any Scottish currency post-independence exacerbates this problem. Removing the issue of changing money at the border, was an easy political sop, but leads to tying the economic future to a third party. Iceland tried tying the Kroner to the Dollar last week. For a few hours. And then gave in to the inevitable, and then saw the currency rates to wild.

The 'arc of prosperity' – including Scotland with Ireland and the Nordic countries - has been renamed the 'arc of insolvency', a slight which will last as long as the 'Tartan Toes' gibe, and probably do as much damage.

Alex Salmond had a solution to the woes besetting HBOS: raise a Government bond to bail them out, just like the Norwegians had done.

Sorry, but I for one do not want to be paying for the bankers follies for many long years.

Norway can afford to raise such a bond largely because it has personal tax rates starting at 37%, and the debt can be repaid out of that yield. Alex Salmond is clearly not suggesting the same for Scotland, but just how would the debt be repaid????

HBOS and RBS (and Lloyds TSB which is also registered in Scotland) are now all part nationalised and are controlled by Westminster. Scotland had a financial sector comparable to that of Iceland (in terms of total size compared to national GDP), a matter that emphasises the sheer problem of becoming over-reliant on any on part of the economy to the detriment of the others.

Banking is not good because it is big; it should be good because it provides a secure, reliable access to funds for everyone. The banks forgot that, and we must use this opportunity to rebuild the economy in a more balanced fashion and to ensure that the principles of banking return to their roots.

Not spend the time finding someone – anyone – to blame. Blame will need to be apportioned – whether that be to friends of Alex or friends of Gordon – but the key issue is ensuring that the illusory economic 'miracle' never bursts again,

Saturday, October 18, 2008

RET _ almost

My scepticism of the scheme of “RET” we are being given is well known – quite how a cut in fares for tourists will benefit local regular travelling businesses is a total mystery - but despite this....

We must all welcome the introduction of the scheme this weekend, unless you are travelling by car from Stornoway to Ullapool, and be grateful for the crumbs that we receive.

The challenge now is to Donald John MacSween, as Labour's candidate, to develop and offer to deliver a better scheme at the next election to persuade the public that voting Labour will have some positive benefits.

We as the voting public must abuse the politicians as they abuse us, and play Labour and the SNP off against each other in the search for real and meaningful cuts in our travel costs.

To put it all in perspective, this week Virgin Atlantic are offering return travel to Boston and 3 days in a hotel for only fractionally more than Expedia can offer a long weekend in Glasgow or Edinburgh.

Friday, October 17, 2008


School language lessons were never my forte.

Indeed, I would go further than that and say that I was crap at languages, and I could never see the relevance of the phrases in the languages that we were taught in school. That probably says as much about me as it does about the teachers.

Subsequently I have learned enough in three or four other languages to be able to do the essentials: make pleasantries, order a drink or two, order food, request the bill, get medicine for the kids, work out how much things cost, and last but not least to be able to communicate that I do not speak the language fluently.

What more do you need?

Today, I could have used the phrase:
Excuse me, but someone has done a poo in the kids pool.

Tuesday, October 14, 2008

Mysteries of banking

Electric Crofter doesn't really understand economics, and exchange rates and the stock market remain a mystery.

All the Electric Crofter wants to know is – will his overdraft be renewed when he visits the bank manager next week?

With lamb prices still depressed and a new tractor needed urgently, Electric Crofter finds himself sitting at the sharp end of the economic crisis, but one that might be remedied when he polishes his wellies, straightens the creases on his oilskins, and visits the big city to plead his case.

But before then, Electric Crofter is going to phone his bank manager to make sure that they haven't closed the Stornoway Branch since he last visited.

And he is going to ask to see HIS money sitting in the vault.

Monday, October 13, 2008

Weaving industry stuffed

So the weavers have been hung out to dry yet again, by another lot of politicians.

Allan is now asking the Scottish Government to support the weavers claim to entitlement to Job Seekers Allowance. This will be the same campaign as MacNeil fearlessly lead for the best part of 20 minutes, a couple of years ago, and consisted of him writing one letter.

And that campaign was a failure, as will be Allan's. It is utterly pointless getting a Scottish Minister to prod a UK Minister, it only gets their backs up and achieves nothing. That may be the very point.

Alasdair Morrison undertook a similar fruitless and uninspired campaign a few years back, but Calum MacDonald was successful, until the Treasury changed the rules.

The real significance of the press release is that it signals that the Weavers Investment Fund is going nowhere and does not have Scottish Government support.

The emphasis has changed to the benefit entitlement – just as Angus recommended, no doubt much to the chagrin of the SNP - only in a pathetic, insincere fashion, designed to give the impression of doing anything, whilst actually achieving nothing. Situation normal, then.

BTW, does anyone know why Mr Mather responded so quickly to this letter from Mr Allan and has failed to reply (as far as we know!) to correspondence about the weavers investment fund, or indeed about Lighthouse Caledonia?

Saturday, October 11, 2008

Credit crisis and Labour


No-one could have expected the Government funding to resolve the banking credit crisis would have had such a limited effect.

Indeed, at this precise moment it looks like the rescue package has had the reverse effect, with the markets spooked at the size and range of the problems and unable to determine how to proceed.

Darling has appeared and made his pronouncements, but with the Prime Minister now commanding the heights of publicity it would appear that No 10 has decided that the scheme is going to work and that with no blame to be apportioned, Gordon Brown will stride the world stage and take the glory for solving anything and everything.

The party politics of all of this is involved and difficult to predict, but some early lessons are clear. Reading the English (and I do mean English) newspapers gives a more non-parochial, more critical, view that the Sottish papers seldom seem to manage.

Brown is off the hook as regards a challenge to his authority, and regardless of the outcome of the Glenrothes by-election, he will continue until the next election. (As an aside, the outcome of the by-election is going to be irrelevant, politically, which is why I suspect that Labour might just hold the seat).

Brown is not being blamed for the credit crisis – it is just not his fault.

This is – of course – utter bollocks, as he was solely responsible for the economic policies that lead to a collapse in the savings ratio; that encouraged, nay worshipped, the creation of obscene amounts of wealth bonuses in the city; that continued to encourage the expectation that borrowing large sums would always generate a large and profitable return; and, that created a tax structure to attract plutocrats who in turn further over-expanded the debt base of the country.

The columnists have – almost entirely – forgotten this, or at least put it to one side, whilst encouraging Brown to get on with his task of saving the economy, or possibly the world.

And boy, has he risen to the challenge. He is in his element, micromanaging a major economic problem, rather than the dull day-to-day demands of Premiership.

And the Tories are stuffed. In the interests of economic well-being they support every action of the Government, and cannot/will not put reward other strategies. Labour have positioned themselves as the saviours of the economy, and no-one is nay-saying.

At least not at the moment.

If they keep this up, they could – just possibly might – be well placed to win the next election.

Friday, October 10, 2008

Banking crisis

The Treasury plans to save the British economy are announced, and frankly I think that the Chancellor has made a fairly good job of trying to remedy the position, were it not for the delay in doing something.

I have some reservations over the guarantee of the inter-bank lending (or more particularly over the guarantee for 'qualifying' lending after the announcement date) as I think this gives banks the opportunity to offload risk to the Treasury ie you and me, without any compensating reward.

However, the attempt to improve liquidity in the market is essential, but as I write LIBOR has increased yet again.

LIBOR is the rate at which banks lend to each other, and is above based. That it has increased indicates the sheer nervousness of the banks in dealing with each other. Which raises the fundamental question: if they won't deal with each other except at a risk premium, then why would they expect us to do so?

The political impact of all of this are amazing – in every sense – and the economic impact is going to be felt for many, many months and years yet.

Frankly, I find the events of the past month almost unbelievable, were it not for the simpl fact that the public have been encouraged to borrow much more than they could afford, without consideration of the repayment, and that he whole edifice was destined to collapse in on itself sooner or later. Not even the deepest cynic in me expected a collapse of such magnitude and such severity.

Thursday, October 09, 2008

Posting problems

Yet again I find myself somewhere that advertises wireless broadband and delivers slower than dial-up. The posts I have sent have been corrupted in transit and I'm going to have to resend them. Sorry, to all my avid readers.

Tuesday, October 07, 2008

Later that night......

The phone calls came. First Gordon, then Alasdair telling me that they heard I was in London and asking me to call in to give them some advice.

“Sole purpose of visit”, I lied, keeping them feeling somewhat self-important as I finished the rest of my tasks.

The substance of our conversations must remain confidential went as follows:

“When the Chancellor is faced with a crisis of confidence in the markets, the markets need a Chancellor who can demonstrate confidence in a crisis” ©The phone calls came. First Gordon, then Alasdair telling me that they heard I was in London and asking me to call in to give them some advice.

“Sole purpose of visit”, I lied, keeping them feeling somewhat self-important as I finished the rest of my tasks.

The substance of our conversations must remain confidential went as follows:

“When the Chancellor is faced with a crisis of confidence in the markets, the markets need a Chancellor who can demonstrate confidence in a crisis” ©

Duly ignored.

“Explain the prudence virtue of savings and you intention to increase the savings ratio, which will in part excuse and explain much of the painful actions that need to be taken.”

Duly ignored.

“Be decisive. The public value decisiveness and hate vacillation.”

Ditto. In spades.

I left the top-secret meeting in Downing Street depressed, and recommended that both Gordon and Alasdair reread Galbraith (JK, not Neil) to understand the fundamentals of what is going on.

London Airports

Today takes me through London airports for the first time in a long time.

It is easy to remember why the London's airports are alternately the best and the worst in the world.

The good is – of course – the multitude of connections, options and the ability to access almost any part of the City. This presupposes that 'The City' is where the action should be. Which is arrant nonsense, but until the revolution we are stuck with this.

The worst is – of course – the jobsworths and the pathetically under-resourced connections, which mean that any transit through the airports is doomed to meet with 'computer says no!' and a singular inability to deliver on expectations.

Friday, October 03, 2008

Cabinet reshuffle

Mandelson is back in Government, as Lord Mortgage of Brussels.

Is Brown that desperate? (Answer: Yes)

I've obtained an exclusive picture of Ruth Kelly announcing her plans to stand down as MP for Titanic South.

Cabinet reshuffle

Thursday, October 02, 2008

Lighthouse Caledonia

With 100 workers facing redundancy by Christmas, we have a solution in sight....
More than 100 fish processing jobs on Lewis on the Western Isles can be saved, according to a local MP.

[...]Mr MacNeil said the firm would like to build a new plant at Arnish on Lewis if a funding package could be agreed.
"Saved" being used in the loosest possible sense.

13 weeks to build and open the factory?

Back in the real world some of us think that the timetable might be just a bit ambitious.
  • Discuss issues with landlords, design factory, seek planning permission and discharge permits from SEPA - at least 12 months
  • Pull together funding package - add 6 months
  • Build new road to replace single track - add 12 months and £millions
  • Build factory and production line - perhaps 12/18 months
Or relocate to the other more efficient factory in Argyll, and expand its capacity.

The non-involvement of the Enterprise Minister (and MSP for Argyll), and the absence of any reference to the Government helping the situation tells it own story.

Having had many past discussions with various management teams in that factory, it's unsuitability has been known for many years, and I feel really sorry for the staff who will be expected to work flat out in the very busy pre-Christmas period, only to receive P45's in the New Year.

Free school meals

An excellent initiative from the Scottish Government to improve and encourage healthy eating by young kids.

However, the government will not be allocating extra money to fund the roll-out of the initiative.

It expects councils to find the money from the funding settlement already agreed.

Like all the best and easiest initiatives, someone else is paying for it. Presumably it will be funded through further cuts in services (aka efficiency savings).