Saturday, 14 March 2009

Old buffers speak at Lib Dem conference

Vince Cable, old buffer of the Liberal Democrats and former Glasgow Labour councillor, has claimed that the RBS balance sheet was 15 times the size of Scotland's Gross National Product, implying that this makes Scotland too wee or too poor to be independent.

How does he know that? Owing to the complexities surrounding the estimation of GNP no official GNP estimates currently exist for Scotland (penultimate page). The best you can get is GVA - doesn't have the international earnings component of GNP - Scotland's was £98.5 billion in 2007, a per capita GVA for Scotland of 96% of the UK's. The oil industry had a GVA of £30 billion (not included in Scotland's total).

RBS's balance sheet was standing at £1.9 trillion at the end of 2007 - will be substantially less now - one fifteenth of which would be £126.67 billion, so to make Cable's calculation work you'd have to have £28 billion of overseas earnings for Scots (including Scottish companies) - or we can have our oil back, thanks. It's quite possible that Scots earned that much elsewhere in the world. Quite possible and totally unimportant. The UK GVA in 2007 was £700 billion short of the balance sheet value of RBS' assets - that means chuffle all either, all the money for the bank bail-out is borrowed, the UK can't afford this bail-out just as the US can't afford the money being stuffed into its banks.

This cataclysm is going to run and run as well - there isn't going to be a recovery to help pay back the wodge that's been splashed. I had dinner with an economist last night who just laughed when I asked him what the chances were of the UK recovering from recession any year soon - he reckons we might have an idea of how long it's going to last by the end of 2011. We're facing a long, long period of pain, the idea that this somehow provides an argument against independence is ridiculous.

Almost as daft as his chum Menzies Campbell who thinks that being old makes you better at international relations but forgets that business was done on the First Minister's US trip.

I can't remember who these two remind me of ...
Mind how you go.


subrosa said...

Love the picture Calum :)

Anonymous said...

wee Dougie on Marr came out with a classic slip of the tongue

‘Of course people are angry with bankers (paraphrased), everywhere I look in my constituency I see people losing MY job’

lol, says it all

David Farrer said...


A lengthy response here