Tuesday 29 December 2020

Scotland's Economical smiles

Yes we all know Glasgow smiles more but that's because they know smiles aren't taxed, they dont even appear in GDP, but if you ask me a good laugh is something we've exported for years, and its well noted, if not by all economists.

I noted with amusement that @glackinreports is this week talking up independence as he mentions Ireland's main trading partner (40%) is the UK and with Scotland at 60% he's seemingly making the case that its not just about trade. When you realise that over 5% of all our trade is in Whisky, I start getting interested. Diageo a while back realised that alcohol is a brands game. As with cleaning clothes where Lever Bros and Proctor & Gamble benefit from increasing the brands almost daily, Diageo just keep buying them when they reach puberty or whatever brand maturation is called. Whereas the Soviet Socialists Republic just called it vodka, Capitalism proved to beat the competition you need more brands, more names for the same stuff, Poitin! This has become self evident in the boom of Gins in recent decades. In Scotland it used to be that Whisky was consumed but now we largely export it and are more likely to consume Gin or Vodka. The maturing of the market as pubs became gender neutral resulted in Whisky looking to the misty eyed hills, aka the export market. "Hoorah", we shouted, "Hoorah!"  all progress is good....!

We have a number of growing industries but we need the skill and acumen to keep them.

I remember when we were at the bleeding edge of golf club manufacture but, when I was a kid, John Letters stopped making clubs in Scotland, relocating to England after the Dunlop takeover. Siemens did the same with a number of our great engineering companies. I dont remember when we designed electrical sub stations, manufactured them here in Edinburgh and put them on boats in Leith docks bound for another continent but I drink with guys who did the work. We are a great entrepreneurial nation, with ideas and the capacity to collectivise behind them and realise the dreams. Whatever the subject matter, whatever the reason, we just seem to work better with Europe than Westminster. 

During my lifetime we have lost out on a number of the new industries because Scotland has largely been a distraction to the more pressing matters in the UK. A devolved parliament is neither fish nor fowl as its not like we can do an Oregon.

"An Oregon" for those of you who are interested is like doing a Netherlands. One of the huge Global growth markets is Cannabis farming. Legalising Cannabis farming has been a contentious thing since the 80's and while Government Ministers can consume as much Cocaine as they see fit, they still enthuse over drug testing in the workplace unless that workplace is the Houses of Parliament, the HP sauce flows fine there. I know teachers, doctors, nurses, bus and train drivers for whom it is standard practice, and yet you can still pull out a mirror, a wrap, a £10 note in the cabinet room and get on with the business of government never mind getting breathalysed before entering the chamber for a vote. 

Quite simply its not a headline. "Drunk Politician votes wrong way on key vote". Its not even getting a titter from the back row. Some people might think it strange but if a bus driver, nurse, ambulance driver, teacher, turned up with ta rosy tint or he slightest look of a Rubens masterpiece they'd be slandered, we only beat our own.

I've written before about how we could use the old mine workings to generate heat but I've never suggessted making them Cannabis factories. An independent Scotland could approach its drug laws in a different way. We have a huge heroin problem but the pipeline for this has long been identified and we need to move in a different direction.

I joke about Bit Coin manufacture but as a way of tackling the boom bust of generating energy when its required, the trick is to consume it and store it. If battery technology is not keeping pace with generation then perhaps using any surplus for bit-coin type manufacture is a way forward. Its the new gold standard, and goes hand in hand with our burgeoning drug industry. Our police force are familiar with the dark web so mix our financial services guys with those wonderful people from Police Scotland and we have a way forward. 

I've looked at a number of our industries in Scotland and those great invisible earnings that we get from very simple things. Whisky sales are well documented and those who have memberships and live in other countries, but the same applies to other industries, from the arts to the golf course. Most Golf Clubs in Scotland have visitor numbers that have plummeted during the pandemic, but many have overseas, or members in England who continue to pay their fees. I remember speaking to a Japanese member of our club who paid his membership every year but made it over only every 4 years. These exports don't get recorded because its far too granular and we dont do the census like it 1834.

The other side of that coin is that its not 1984 either. Friedman economics were largely booted into touch by many but still made it onto the syllabus for every student. Money supply and quantitative easing are real tools the public have been educated on, like growth. Growth, is everything, we are told. Clinton won an election by saying... its the economy....proving yet again that three words are better than 1428, when last I counted.

Our Covid world has carelessly caressed those in the organising service industries which to my mind are just hobby jobs while kicking the shit out of the health & hospitality sector. The problem is clear to see for me and therefore I do give the politicians a nod on closing them but I dont like they kept them open with optimistic winks. If you find yourself at a loose end because you used to be an organiser, then you needed a bit more training as you should have been organised for this. Rant over, but please, we cant feed our population without resorting to food banks and yet we need someone to help us organise an 18th birthday party.

Oops, I slipped off piste again, but that's that.

Ok, party central Scotland. We are a destination venue and everyone knows this. From T-in-the Park to Grouse shooting on the Moorland, I'm not going to judge, I'm just aying, we are a destination. Tourism is huge now in the western world because we can all afford washing machines and TVs. I have three older brothers and they never got a TV until 1968. I was 5, so I wouldn't have remembered if we'd had one before. Who knew the TV would be so popular. We never used it much, mostly had it on the radio. For my Dad not much has changed as he usually has it on teletext.

Back to the point and an independence discussion. If the SNP are serious then they need to tell me what new industries we will pursue. The Danish famously manufactured the turbines we invented to harness the power and I want us to pursue wave power more vigorously. I want us to look at the work SEPA and others have done on the old mines and the issues with the contaminated water and turn this into a world leading solution. We can transform old mines and we can work with climate change to avoids flooding. Its not about building flood defences, its about working with nature and making shed loads of cash from exporting our savvy.

Its a common misconception that our near neighbours in England have a bad track record of building on flood plains or not understanding the geology of the landscape. The truth is that like us they have solutions but rarely have the backing. Water is a magical resource, which like wind power, often arrives when you dont need it.

Anyone who has ever worked in the golf industry knows how much it costs to water their course. On average it £10,000 a year to keep the grass green. Harvesting water is clearly something all countries need to concentrate their minds on and yet few gain headlines for it. In Scotland alone, 300 of our golf courses will pay £10,000 for their water and for those with a clubhouse, another £20,000 for their gas and electricity. Quite simply £10m and that's before we flush a toilet. 

Golf Clubs are a bad example though as I tried to get us to save the clubs £2m recently by abandoning the use of Vouchers as prizes. In Non-Covid years, Clubs tend to invite visitors to play open competions. They give them a discount to the normal green fee and also pay out a large chunk of the entry fee in prizes while the rest is eaten up in goodwill from helpful volunteers. The hidden costs come after when those prizes are paid out in the form of vouchers. These move around the Scottish mainland and Islands via the postal network and then via the bank system the cash makes its way to the place where the recipient spent said voucher. Often these vouchers are worth less than £20 and 99% are under £60. I pity all golf professionals who receive a £15 voucher with a smile and then have to post it off and wait for the money arriving. Then phoning up two weeks later to chase for the cash, I digress but I know that 30,000+ of these vouchers every year are issued by 450 clubs. Some clubs, like mine issue 200 every year. If only it was like stamp collecting.

The time has perhaps come for more of our courses to migrate to becoming municipal courses like St Andrews or Montrose. I dont know about that but we need to get these green spaces into the green environment so that instead of spending money on utilities they are generating profits by supplying them. I'm thinking of the offshore wind farms at Trump Aberdeen of course, still a source of great amusement. I do wonder if he became president just to get back at Salmond, its a funny wee side show, but no of course I dont think that, ha ha!!

So back to the point. I want to hear more about our inventions being delivered into live. From Games in Dundee to beer in Aberdeen, via Gin in St Andrews, Golf in Ayrshire. I want to hear that Ardrossan wind turbines are going to be used to power something. I want to hear about Euro and Crypto Currency!

Most of all, I want to hear that we are now measuring GDH, aka Gross Domestic Happiness. Yes, how happy we are. I want to hear Danish laughing classes and see Glasgow smiling better!



I seem to have cut and paste a piece here and like a traditional DIY Christmas present, I have a leftover screw, nut and bolt......you decide!

The question about independence that I'd like to hear asked are about the new industries.

We like wind power more than Trump, but if we explain we are going to use our excess capacity to mine Bit-Coin will he change his tune?

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