Gary Monro’s blog

The Scotsman on a report written by economists at Scottish Enterprise:

The astonishing extent to which state spending is propping up Scotland’s economy is laid bare in new figures which suggest the ballooning public sector is strangling wealth creation.

The findings show that in some areas, three-quarters of the local economy is made up solely of the billions of pounds pumped in by the government.

I think I might replace the sentence ’state spending is propping up Scotland’s economy ‘ with something a lot closer to the truth - such as, ’state spending is propping up Labour’s tartan vote block’. Our tax-and-spend government maintains artificially low unemployment by moving unemployed onto disability benefit and by buying public sector jobs - as if the country needs them.

Such is the size of the public sector in these areas, business chiefs and economists fear it is swallowing up private enterprise, hoovering up talented workers and making it nearly impossible for companies to prosper.

The findings shed fresh light on Scotland’s chronic dependency culture - in which the economy is becoming increasingly reliant upon state handouts to provide wages for the ever rising army of public sector workers.

Some of the findings are pitiful. Just how does a person have any pride in a town or area when all that it is has been provided by tax-payers - via the government?

In Argyll and Clyde, 76% of the economy is generated from the state, in the form of spending by councils, health boards and through other forms of government activity. In Ayrshire and Arran, the figure is 74%. In Lanarkshire, it is 72%.

Only in oil-rich Grampian (35%) and finance-friendly Lothians (39%) do the figures fall below comparable English levels. Across the UK, state spending accounts for approximately 40% of the economy.

The figures have almost certainly been boosted by the rocketing sums spent by Scotland’s government since devolution. By 2008, Scottish Executive spending will be double that of 1999. Scotland’s benefits bill has also rocketed. Scottish Enterprise claims that total public spending in Scotland in 2002-03 reached £40bn, or 55% of Scotland’s total economy.

The warnings are stark - and probably set to be ignored:

Business chiefs warned that the high levels were ruining hopes of boosting growth.

Alan Mitchell of CBI Scotland said: “To have that much of the economy generated by wealth spending rather than wealth creating can’t be good for the Scottish economy long term.

“It has a major effect on the ability of companies to recruit and retain staff. Their margins are tight and they cannot compete in terms of holidays, pensions, childcare and all the other add-ons that the public sector can offer. If we don’t have ambitious small to medium size businesses growing then we aren’t going to develop that economy long term.”

Even the Scottish National Party is concerned:

Jim Mather, enterprise spokesman for the SNP said high levels of public spending would leave Scotland dangerously exposed when government funding was cut back.

Which is plain common sense (if you’re not a card-carrying member of the Blairite Tendency).

No wonder the Scottish National Party only secured 6 seats in the May General Election. Independence is just what Scotland doesn’t want.

[Thanks, The Anglo-Saxon Chronicle]

There is a suggestion that Tehran is arming and training insurgents in Iraq to kill British soldiers. The British government’s response to evidence that foreign powers may be killing our soldiers differs quite markedly from their attitude when they couldn’t find WMDs that they didn’t really know that Iraq even possessed:

“The particular nature of those devices lead us either to Iranian elements or to Hezbollah… however, we can’t be sure of this,” [said Mr Blair].

Despite the qualification, Mr Blair said there could be “no justification” for interfering in Iraq. The Ministry of Defence said these new claims supported the prime minister’s comments. A spokesman said the evidence pointed towards Iranian involvement, but it did not have decisive proof.

Reiterating the prime minister’s statement he said: “What is clear is that there are new types of explosives being used by insurgents in Basra and elsewhere in Iraq. “The particular nature of them leads us to think of Iranian elements or Hezbollah”.

But he said there was no clear proof Iran’s Revolutionary Guard was involved.

Foreign Secretary Jack Straw said the UK hoped to discuss the evidence with Iran.

So we invade a country that may or may not have some nasty weapons and which definitely has not killed our soldiers but require rigorous proof - and discussion - with a power that may very well be doing its level-best to harm our soldiers wherever it can?

I don’t think we should have invaded Iraq (been into all that here) but I do very much care about what happens to our soldiers. And since we aren’t attacking Iran but they are attacking us then I believe there is a strong case for sending them some high-explosive greetings from HM Forces.

In the meantime, in what passes for a show of strength these days, the British authorities showed they mean business in Basra by promising to pay compensation for the damage caused to a police station they raided in order to rescue two of their captured comrades. They also apologised for rescuing their comrades.

“We hope to avoid a repetition of such incidents.”

We’ll only avoid a repetition of such incidents if none of our soldiers are kidnapped by Iraqi police or militia. Otherwise, I very much hope to see such incidents repeated as often as is necessary.

Chinese attempts to demonstrate its superpower status were boosted by a televised launching of their second manned space mission.

From CNN:

The mission, reportedly due to last up to five days, is an effort by the communist government to declare its status as a rising world power with technological triumphs to match its rapid economic growth. It is only the third country to launch a human into orbit on its own, after Russia and the United States.

Much of the technology however is Russian in origin albeit extensively modified. The two astronauts are thought to be spending five days in space having orbitted the earth 80 times. Chinese confidence in the project was sufficiently high that they screened the take-off live on television.

The manned space program is a key prestige project for China’s ruling Communist Party, which hopes that patriotic pride at its triumphs will help to shore up the party’s public standing amid frustration at official corruption and social problems.

I wonder if a certain Mr Blair ought to be thinking of sending something into space soon - for rather similar reasons…