BBC BLOGS - Douglas Fraser's Ledger

Archives for August 2010

Cairn at the mountain top

Douglas Fraser | 15:30 UK time, Monday, 16 August 2010


Sir Bill Gammell named his oil company Cairn because he liked the imagery of building stones gradually to create something monumental.

It was an odd choice, in that oil exploration doesn't seem gradual.

You have to do lots of preparation, but in the end, there's a brief point at which you either get lucky or you don't.

There are some very substantial shirts to be lost in the process, and Ernst & Young's oil and gas index this morning shows that the risk appetite in current economic circumstances is putting people off the sector.

Likewise, BP has learned that even when you get lucky, other risks can still be lurking deep underground and under water.

But today's agreement to sell a 51% share in Cairn India, the company it spun off on the Mumbai stock exchange, shows there are big, big returns for those willing to take the risk.

The price being paid by Vedanta Resources is £5.4bn, as that Indian metals company diversifies into the energy sector - or perhaps it's hedging against future energy price fluctuations, when its metals business is so exposed to them.

The champagne will be flowing at Cairn's Lothian Road headquarters.

But spare a thought for the people at Shell, who sold Cairn the Rajasthani drilling rights for an oil industry pittance.

A substantial share of the sale is to be handed back to the Cairn shareholders who took that risk, while some will be put into continuing exploration activities, notably in Greenland.

And the risks continue. Don't forget that the drilling going on off the west coast of Greenland this summer is reckoned to have only a 10% chance of success.

Re-painting the broadband bridge

Douglas Fraser | 08:20 UK time, Monday, 16 August 2010


What is of more importance to the Scottish economy: a new Forth crossing, the Edinburgh trams or a broadband network spread far and wide that can compete with fast-improving international standards?

In a tough public spending environment, such projects have to compete for government support. And there may be a case for a better cost/benefit return from putting relatively modest sums of public money into broadband cabling.

Living complacently in central Glasgow and with modest requirements, I can't complain about connection speeds. For those with several people in a household simultaneously gaming and downloading, the options are getting much better around these parts.

The more pressing issue in Glasgow is the unusually low level of broadband take-up, linked almost certainly to high levels of poverty.

The city had 39% of households with broadband in early 2009, whereas Edinburgh and Aberdeen had 72%. On Clydeside, we've also got a very high proportion of homes dependent on mobile phones rather than landlines.

In rural Scotland, the chance of fast broadband would be a fine thing.

A report out this morning by think tank Reform Scotland says there are big gaps in our broadband infrastructure, and above all, in our planning for it.

This is not a think tank that routinely calls for more government intervention, planning or subsidy. On the contrary, it tends to prefer market solutions and a shrunken public sector. But the fact it's making an exception in this case serves to underline the significance of the message.

Slow downloads

A key factor in all this is Neilsen's Law, stating that average broadband speeds will double every 20 months. So for those of us quite satisfied with a service that chugs along reasonably happily with few demands placed on it, that's a bit like saying we'll just stick with Windows 95, thanks, as it's never done any harm to us.

Scotland has nearly reached its former target where there's coverage of the whole country at half a megabit per second. But that is too slow for the BBC's i-Player, or fast music or film downloads. And it's a brake on efficient business links.

It's much tougher to deliver distance learning or e-health to remote parts of Scotland (where both are particularly useful) when speeds are so slow.

I'm told of at least one fisheries company in the Western Isles that sells premium live shellfish direct to Spain, but it's only able to take its orders by fax. How many businesses even have a fax machine, or at least one they use?

The last Westminster government said there should be universal access to 2 megabits per second by the end of 2012 - a target delayed by the new government to 2015.

Telecom roll-outs

And the next target is to take a leap to 50 megabits per second by
2017 - at least for 90% of the UK. Reform Scotland rightly points out that the history of telecom roll-outs is that an impressive figure in the 90%-plus range doesn't look so impressive in remoter parts of Scotland, which tend to be the bits left out.

The report states: "Some 20% of Scotland's residential and business premises lie too far from the nearest exchange to have any expectation of achieving even the very modest two megabits per second 2015 target.

Meanwhile, it cites Scandanavia, Canada, Australia and New Zealand in hot broadband pursuit of the South Korean and Japanese pace-setters.

Sweden has 89% of homes with broadband, and it's aiming for superfast broadband at up to 100 megabits per second in 40% of homes by 2015 and 90% by 2020.

The Obama administration in Washington wants to reach 100 megabits per second to 100 million homes and businesses within the next ten years. That also leaves large gaps, but the strategy says everywhere should have access to 4 megabit per second download speeds.

Birmingham, Yorkshire and Wales are pursuing digital strategies or building new fibre-based networks, as a means of attracting inward investment. Cornwall has 99% coverage, typically at 4 megabits per second, having promoted "the Big Hunt" to find the remaining Cornish businesses and self-employed people who were not connected.

Yet, the report's authors say there isn't even a map of what Scotland has, let alone "a co-ordinated digital strategy to ensure that large parts of Scotland do not suffer from no or very limited access" to what is called Next generation Access.

Whizzbang technology

There's quite a bit going on. It's the co-ordination that's the problem, and it says that may be explained by the Scottish culture minister being responsible for expanding participation in digital use, while other parts of the policy are down to the enterprise minister.

Among the other problems; much of this comes down to regulation of telecom companies by Ofcom, which straddles the border. Private companies need to see return on investment, and in remoter parts of Scotland, the market simply doesn't support that. So subsidy has to kick in, as well as more effective regulation.

And of course, the technology keeps changing. The whizzbang ISDN technology on which a lot of government money was spent across the Highlands and Islands in the 1990s is several generations ago. To keep replacing it, it helps not only to have the latest fibre cabling, but also the ducting in place through which to feed it.

That could be made a requirement of all planning applications for new homes on green or brownfield sites, it's suggested. And why not the inclusion of broadband ratings in Home Reports.

We've sold you to Spain

Douglas Fraser | 10:15 UK time, Saturday, 14 August 2010


How do you ditch a customer you value without causing offence?

It's not a question that troubles many businesses. Most want to retain valued customers, or ditch duff ones.

But it's a tough challenge facing the Royal Bank of Scotland, as it jettisons more than two million of its customers.

They're the ones attached to the 318 branches and a handful of business banking centres that RBS is being forced to sell off.

This was, you'll recall, a condition placed on it by the European Commission, in return for approving the UK Government's bailout.

Earlier this month, it agreed to sell them to Santander.

And as some respondents to the Ledger have already pointed out, they don't want to be "sold" by the banks.

They chose to bank with RBS, and not with Santander.

And elsewhere, it's reported that some have been angered and offended to receive a high-handed letter from RBS to say its selling them.

Would the Spanish government bail out British savers in the way the UK government did, asked one customer?

Inadvertant marketing trick

The problem for the Royal Bank is one of the rules under which it's disentangling the 318 branches, 2% of the UK retail market and 5% of the business market, from its continuing operations for NatWest and the RBS brand in Scotland.

It's not allowed to solicit business from those customers who have been with those branches.

So it's not allowed to add a paragraph to those "high-handed" letters saying "actually, if you'd prefer to stick with RBS rather than Santander, here's a number to call..."

If it did, it would be reducing the valuation of the asset it's selling.

It seems RBS can't win. It's angered an entire nation with its recklessness. Now it's angering its customers by "selling" them.

But then, maybe it's an inadvertant marketing trick - increase people's loyalty to RBS by threatening them with Spanish ownership instead. Perhaps other companies should try this.

Financial harvest

Incidentally, on the bank lending front, note an interesting finding of Scottish government statistics that shows lending to agriculture has grown since last year at the fastest pace for ten years.

That's up nearly 9% to more than £1.5 billion - or £120m more lending.

With the survey tending towards larger farms, it leaves bank borrowing around the same level as the average for the past 20 years.

Banks account for 60% of farmer liabilities, which averages out at £52,600 owed to the bank, and £37,300 owed in hire purchase, leasing, to family members and others.

With agriculture prices showing a healthy upside, it's one sector that's quietly been having quite a good downturn.

Taxman shoots for away goals

Douglas Fraser | 08:40 UK time, Thursday, 12 August 2010


When Mervyn King isn't worrying about inflation and growth, the Bank of England governor's got the shortage of transfer funding at Aston Villa to add to his more personal woes.

But his opposite number in charge of Her Majesty's Revenue and Customs is taking a close interest in the football transfer market for very different reasons.

Among the themes running through the latest annual survey of British football finance from accountants PKF is the role of the taxman (though said official ought, by now, to be a taxperson).

Now, it wouldn't take a particularly cynical observer to question whether the authors of this report might have good commercial reason to flag up issues of tax compliance. There are contracts to be won out of this sort of thing.

Tax torch

But it is, at least, interesting to see where they think the taxman is poking his forensic accounting torch.

One area is into the late payment of tax. More than a quarter of clubs in this survey admit to having paid tax bills late. Of the six Scottish Premier League clubs, only one said it had done so, and that was with prior agreement.

But in the English leagues, others are not getting that agreement. And the advice of football tax adviser John Cassidy is that HMRC is getting less understanding of late payments.

If it feels a club is at risk of collapse, it can protect its own position and push for payment, or require an independent assessment of whether a club is viable.

Another concern is over profitability. Only 22% of those surveyed expect to make a profit over the next accounting period (two out of six in Scotland, sharply down on last year). And if profits aren't anticipated, there are areas where the taxperson can question the legal capacity of clubs to write anything off as expenses.

Image conscious

There's a crackdown looming also on the "image rights" paid to players, which that taxperson sees as income - taxable for top earners at 50% - rather than an opportunity for depositing supposed royalties in offshore accounts.

That's obviously not a big concern for smaller clubs. But for England's Premier League, half of them are concerned about a big bill being slapped on them for part-paying players this way.

It's not clear from the 41-club survey of finance directors what the position is for Rangers - none of the survey participants are named - but it's reported the Glasgow club is being closely watched by HMRC for similar practices in player payments.

According to John Cassidy: "HMRC has so far failed to make much of an impact in this area, but specialist investigators are now asking more searching questions and demanding high volumes of data under relatively new information gathering powers. I now expect HMRC to mount more challenges and tricky investigations into both clubs and players".

While the football finance survey starts a new season with a whiff of optimism that they are climbing away from the dire days of 2009, there is still plenty concerns about the inflexibility of player pay.

Fewer pies

There's been a marked rise in the proportion of clubs that spend more than 65% of revenue on wages. Some 38% of respondents do so, up by double in two years. Back in 2008, 59% of clubs thought they could increase those payroll costs. This year, it's down to 24%.

Player pay is not the top concern for Scottish Premier League clubs, according to PKF. They were found to be particularly concerned about falling attendances, but pessimistic also about catering revenue (fewer pies, less Bovril) and corporate sponsorship.

Facing that evidence, the Scottish finance directors were praised for their pessimism. That's seen by the accountants as being the most realistic view to take.

Growth concerns

In another survey of business financial health and investment intentions, Clydesdale Bank has shown Scotland's pessimism goes rather further than football.

True, half of companies are planning to spend more than 6% of turnover back into the business. Sounds impressive? Well look at it this way.
Some 24% intend to spend nothing at all on investment. One in ten companies expect to contract rather than grow.

And the Clydesdale found 27% see their banks as a constraint on growth plans.

While 50% of Scottish companies aim to get past the 6% of turnover mark, that's true of 61% of businesses in London and 55% in north-west England.

To Clydesdale's regional director, Scott McKerracher, this isn't pessimism - it's "relative conservatism".

Mervyn's choppy waters

Douglas Fraser | 11:46 UK time, Wednesday, 11 August 2010


Inflation estimates matter, because people plan on them, whereas so many other bits of economic data are pointers to where we've just been.

If the Bank of England says inflation is going to stay above its 2% target throughout next year, then dipping and staying low - as its governor, Mervyn King, has done this morning, with a stress on uncertainty and "a choppy recovery" - there are lots of people then make their investment and hiring plans on that basis.

But what if it's wrong? That matters too, particularly if it's consistently wrong. And the track record of the Bank of England's growth and inflation forecasts is an unhappy one of misjudging the path of the downturn.

If the central bank's guidance loses credibility in its forecasting, business leaders and trade unions will make their own assumptions about inflation, aided and abetted by more pessimistic analysis.

They will do so while believing the agency with the task of keeping inflation under control is behind the curve and therefore not taking adequate action. That is a dangerous place for the British economy to be.

Jobs slack

Trade unions can be important in this, in that they play a role in negotiating pay rates. It's not a strong role while the labour market is so weak. They have a much stronger role in the public sector than the private one, so they may be about to take a more prominent role.

That recruitment weakness is part of the Bank of England's reckoning - that a slack jobs market will keep wage inflation low, and hence the broader measures of inflation.

It's also trying to gauge how much spare capacity there is in the economy. That's tricky in this recession partly because many employers went unusually far in trying to hang on to skilled staff, often with shorter working hours, so that they'll be there for the upturn.

That factor could lead to what is becoming known in the US as a jobless recovery: growth expands, but not by soaking up the large numbers of unemployed.

Uncertain mood music

Those uncertainties are conceded in the highly uncertain outlook we've got today from the Bank of England. It continues to explain its problems in controlling inflation by reference to commodity price volatility (now returning?) and a VAT change which was announced 20 months ago along with a scheduled withdrawal more than seven months ago.

Against that backdrop, and a strong theme of uncertainty, the mood music is around interest rates staying very low, and a return to quantitative easing - or creating new money - being under more serious consideration.

That's the direction in which the US Federal Reserve went yesterday, while on the fiscal side, Congress splurged more borrowed money - $26bn of it - on state governments, to avoid massive lay-offs of their teachers and police officers.

You've got to pity the Bank of England. The spread of possible outcomes is a very wide one, because it is in the same uncharted territory as the rest of us.

In particular, because it's unprecedented, no-one is quite sure what the future impact will be of the £200bn in new money, or quantitative easing, which the bank pumped into the economy, ending last February.

That money seems to be sitting on bank and corporates' balances rather than boosting the supply of credit. And with so much slack in the economy, it doesn't seem to have had a clear impact on the inflation figures.

But there are those, including at least one voice in the Bank of England's monetary policy committee, who warn that its inflationary risks should be taken more seriously, and soon.

It could be that the Bank of England's new money is like all that oil that gushed from BP's Deepwater Horizon well in the Gulf of Mexico.

We've learned this week that much of the sticky stuff seems to have disappeared - perhaps evaporated, perhaps dispersed into the ocean. Or perhaps gigantic globules of it are lurking beneath the surface, ready to spring some very nasty surprises.

New banks, or more of the same?

Douglas Fraser | 09:30 UK time, Wednesday, 4 August 2010


Great news, bank customers! There's more competition on the high street, as the Royal Bank sells off 311 of its RBS-branded branches in England, and seven branded NatWest outlets in Scotland.

Well, there should be. But is there?

This is a large part of what the European Commission demanded as the price of approving the UK government's bailout. It saw Britain's banking system as in need of more competition.

The former Chancellor, Alistair Darling, was in agreement - that this was an opportunity to increase the amount of competition for customers.

The new Chancellor, George Osborne, agreed too.

Then why is it that the sale of this large tranche of the British banking market has been to Santander, one of the existing big players?

Spanish giant

Every high street, and lots more besides, will recently have seen the Abbey, Alliance and Leicester and part of Bradford and Bingley take on the Spanish giant's branding over recent months.

So this acquisition of 318 RBS-branches only makes the fifth biggest player quite a bit bigger, and doesn't seem likely to expand the range of options and products available to the consumer.

Note this has been a strong part of RBS. It's not one of those non-core Asian assets - mostly legacy of the former Dutch empire of ABN Amro - that it's flogging off with some enthusiasm.

With the branches, Santander is gaining 1.8 million retail customers, or 2% of that market.

It gets 244,000 small and medium-scale businesses and 1,200 mid-corporate clients, both representing 5% of those markets within Britain.

The tranche of RBS had £21.5bn in total assets and £22bn in customer deposits at the end of last year.

The European Commission required divestment within four years, starting last autumn. So this was an opportunity for the regulators - and RBS's biggest shareholder, the UK government - to use their clout do something significant for banking competition, just as they said they wanted.

But the way the sale turned out, others stepped away and RBS was left negotiating with only one bidder.

Aussies walk away

The attraction of encouraging National Australia Bank to build up its presence would have made good sense.

With Clydesdale and Yorkshire already under NAB ownership, the RBS branches would have given it a network with particular strengths in north-west England, while Northern Rock's sale could give it clout in nort-east England.

The Melbourne bosses were interested, but stepped away when they decided opportunities look better outside Europe.

That tells its own story about the continent's economic position in the world.

With more divestments on the way, immediate attention shifts to RBS sale of its transactions business. An announcement is expected soon.

Then it's on to its insurance business, including Direct Line and Churchill - also forced on to the market by the European Commission.

There's no evident rush there.

The downturn has hit profits. Claims, it seems, go up when people get short of cash. And there are further efficiencies to be driven in these businesses before they can maximise their sale price.

Lloyds watches

Then it's on to Lloyds Banking Group, which has been told by the European Commission to sell off Lloyds TSB Scotland and Cheltenham and Gloucester.

No sign of movement on either of them so far, and it has more than three years in which to do so.

It has been watching the RBS sale with interest, presumably thinking there will be a better price for Lloyds' assets further down the road.

If this morning's announcement of a boost to Lloyds' profit is any guide, the price of bank assets may indeed begin to rise.

You've got to wonder if the RBS sale of those 318 branches has been done too hastily.

    NatWest in Scotland
    The sale of seven NatWest branches in Scotland raises the question of whether they might be replaced.
    They've had two roles. One has been to provide services to NatWest customers in England and Scotland who find themselves temporarily in Scotland.
    And they are in university locations to appeal to English students in Scotland, who can be expected to return south of the border - taking their income, wealth and borrowing potential with them.
    That business case remains as compelling now as before, so why not open up new branches?

Foot off the accelerator

Douglas Fraser | 08:04 UK time, Tuesday, 3 August 2010


How do you spend half a billion quid on "driving more efficiently"?

This is not a wholly sceptical question. It is one of the puzzles emerging from a Scottish government document setting out the likely costs of climate change.

Having reported on Monday that there's a bill of, very roughly, £8bn to deliver the ambitious targets for reduced climate changing emissions, I've since been shown some of the thinking and arithmetic that gets civil servants to that "highly provisional" figure.

So let me share them with you. The calculations were made in May, at a time when an equally uncertain total for Scottish government spending over the next 12 years came to £6.7bn. The £8bn figure is a more recent update.

Of that £6.7bn, the total spend on energy measures would be £2bn.

Nearly £1bn would be spent on energy efficiency in buildings. And of that, roughly two-thirds would go into support for improvements to homes.

With tight government budgets, there's vague talk of "exploring new funding mechanisms for implementing energy efficiency programmes across Scotland".

So far, that's meant the energy utilities have been regulated into taking the strain.

Slow down

The total cost of transport measures came close to £4bn. Half a billion would go on "driving more efficiently", as I mentioned.

This seems to include a range of measures, with the ten most cost-effective listed.

These include promotion of eco-driving (for fuel efficiency), reduced speed limits, and fewer car parking spaces to discourage drivers from taking their cars into town or work.

There's talk of improving the efficiency of vans and lorries, which currently spend many of their road miles empty or near-empty.

There could be a big bill for installing a network of points to plug in electric cars, and car clubs, a form of rental, such as the one that operates in Edinburgh city centre.

There's no talk, however, of a suggestion made by Barack Obama while running for the presidency, when he observed that Americans could save fuel by having their tyres pumped up to the right pressure. He was ridiculed for that, even though he had a point.

Farmyard emissions

Significant in the civil service briefing is that new or upgraded railways get dismissed as having poor carbon abatement returns on huge investment costs.

That thinking may inform project funding over the looming years of capital spending famine.

The other area of spending is on the land. Only £2m is earmarked for schemes to tackle the considerable carbon-loaded impact of methane from either end of Scotland's farm animals.

Far more - a huge £800m - is seen as necessary to encourage the planting of 15,000 hectares of new woodland each year.

In journalism, we like to make such measurements meaningful, by offering helpful comparison.

So to use two such classics, that's nearly 15,000 maximum-sized football pitches each year, and over 12 years, it's nearly one hundredth the area of Wales.

Climate Change vs Fairness vs Spending Cuts

Douglas Fraser | 07:30 UK time, Monday, 2 August 2010


As nearly £4bn is stripped out of Scotland's annual public spending over the next four years, a whopping great invoice is about to land on the nation's doormat.

It's a number worth a bit of reflection. Eight billion pounds is the amount the Scottish government thinks it might cost to implement its own legislation on climate change.

Being a world leader, with a legislated target of 42% less carbon emitting by 2020, is turning out to be quite expensive.

This autumn, the Scottish government will set out its plan for hitting that reduction from 1990 levels.

It will include estimates of what it might cost to adapt the government's own assets and spending profiles to lower emissions, including energy use, transport, housing and offices.

It has given Crawford Beveridge's Independent Budget Review Panel a sneak preview of its figures.

Although there are very wide margins, it thinks £8bn is the best bet.

The Beveridge document is unclear how fast this will be needed - 2020 in one section, and 2022 in another.

Let's assume 2020 is intended, as that's when the target is set.

Lumpy and unpredictable

You might have thought this figure should have been clear to legislators before they voted through the Climate Change Act. But it wasn't.

Posted online on 19 June 2009, the revised financial memorandum accompanying the bill went like this: "In addition to steady, year-on-year emissions reductions (e.g.
arising from enhanced energy efficiency), some of the more significant emissions reductions will take the form of step changes resulting from, for example, the introduction of new technology.

"This means that in practice a straight line reduction trajectory is unlikely.

"For example if carbon capture and storage is successfully introduced as a mechanism for avoiding emissions of carbon dioxide into the atmosphere, the national reduction trajectory will take the form of series of step changes as the technology is adopted at fossil fuelled power stations."

In other words, progress is likely to be lumpy and unpredictable, like a camel or bad custard.

It goes on: "Currently there are not any climate change studies which estimate the costs of reducing emissions by 2020 which could provide a reference point on which to base Scottish costs.

"As emissions reductions will not occur in a straight line trajectory, taking a proportion of the cost estimated for delivering the 2050 target would not provide a credible cost estimate.

"The risks and errors with such an approach are too significant."

Missing the big picture

Even if making an estimate were possible or credible, neither does the memorandum offer any detail on the 2050 target of 80% reductions, beyond the Stern Report's estimate (a UK commission that looked to the global picture) that implementation of necessary measures would cost the whole economy between 1 and 2% of national income, or up to £2.2bn in Scotland at 2006 prices.

Despite such large gaps, the Scottish government's financial memorandum was able to give precise figures on a proposed plastic bag tax or making bottles returnable, or the £2.5m cost of setting up an advisory panel on climate change.

Useful, no doubt, but somehow missing the big picture.

One point that arises from this is underlined on Monday morning in a survey commissioned by O2, the telecom company.

Its survey of 500 British business leaders found that 36% expect to ditch their sustainability efforts over the next two years "in favour of strategies to generate short-term profits and enhance their balance sheet".

The report goes on: "One in three argues that they (sic) don't have the expertise to quantify and justify sustainability's benefits, resulting in it failing to fly in the boardroom".

If private businesses see it as a luxury they can or should ditch when financial times get much tougher, that leaves the government and household sector with more of the strain if those targets are to be met.

How this fits into public sector budgeting is not much clearer from the Beveridge Report.

Its authors make clear that climate change, as with demographic change, is going to add to costs at the same time that resources are being slashed.

But they only point out the tensions there, rather than offering a way to resolve them.

And on re-reading the work of Crawford Beveridge's Budget Review Panel, that's one of the approaches that is striking for its absence.

Who's the fairest of them all?

What the panel delivered was a costed list of possible cuts, and a sense of urgency about prioritising them with a mature political debate.

What it did not do was examine those trade-offs to say which options would have the biggest impact on competing priorities: not just action on climate change, but economic growth or fairness across socio-economic groups or generations.

That fairness test is particularly relevant when comparing the approach with the coalition government at Westminster.

Because of the political background Conservatives and Liberal Democrats bring to their partnership, George Osborne's budget in June made a strong play of being fair.

There are those who question whether it was, but perceptions of Conseratives are such, and the requirements of Lib Dem grassroots are such, that claims of fairness had to feature.

Casting a long shadow

It's easier to make such claims when the big issues in that budget were mainly about taxation.

It's much harder to say which groups are hit hardest by changes to spending on services, which is what the Scottish government's choices are largely about.

To be fair to the authors of the Beveridge Report, they were limited by both time and a paucity of data.

And they implicitly address at least the fairness question.

Underpinning the report is an unwritten assumption that removing universal provision of services to all across the income and wealth range is no longer affordable, and that retreating from that to a more targeted approach ought to be fairer. Or at least it could be the less unfair approach.

But it is one of numerous trade-offs between different targets and priorities in Scottish public sector spending.

Fairness and climate change have barely been mentioned, but will cast a long shadow over the political choices.

Monday 2 August, 22:00
Recycled glass is half full

Eight billion pounds is only one side of the ledger, or so I'm told from deep inside the Scottish government.

The other side - which was not presented to the Beveridge panel - is measured in the number of 'green' jobs that can be created from all that spending at home, and by export of that Scottish green technology overseas.

There are big numbers for that - notably a claim of 60,000 green jobs in a decade. Lots of that is tied up with private sector investment in renewable energy.

A significant counter-balance is the reduced cost of fuel if all those energy efficiency efforts actually reduce usage.

It's reckoned that, by 2022, Scotland - that includes the government, business, household and transport sectors - could be paying £2.6 billion less each year for our fuel.

That would be a welcome return of investment, of course, just as there's good to be done in doing our bit on climate change.

But the £8bn or so has to be found first, and that printed variety of green stuff is what's in scarce supply.

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