Sep 162011

Voice’s David Innes’ benchmark indicator of biographical literature quality is more or less, “Would I have a pint with this guy?” It was with some interest and not a little thirst that he approached the latest revelations from inside government, written by the man who achieved heady high office as President of the University of Aberdeen’s Student Representative Council in the mid-1970s and then went on to reputedly greater things.

Tabloid is a newspaper shape, although the term is now universally used to describe populist low-rent journalism. Not here at Voice where your screen size delineates layout and low-rent isn’t our way.
Tabloids’ views on Back From The Brink have been almost prurient in their seizing on the Darling-Brown relationship as their focus for summarising the book’s content and offering review.
Whilst this is interesting, and is probably welcome relief from the views of Debbie from Doncaster, 22, 38-22-36, on monetary policy within the Eurozone and its effect on Greek public expenditure, far more interesting is Darling’s take on the events and decisions forced upon him during his tenure in No 11, as the economic crisis of 2007 threatened to destroy global financial systems.

The former Chancellor’s view is that the Financial Services Authority (FSA) failed due to its never having had to deal with a financial crisis, as the regulatory system had only ever had to operate in good times.

When the chill economic breeze blew over the North Atlantic and the unregulated mortgage free-for-all was found not only to have been the preserve of US financial institutions, the UK banking system clammed up, investors panicked and the reliance on UK financial service companies for 25% of UK tax revenue was shown up for the short-term folly that it was. Not before those responsible had lined their own pockets, of course.

As banks pleaded poverty and our mortgages and pensions were put at risk, these self-same bankers, previously vocal in their demands to be left alone, free from governmental intervention, queued up at the Treasury door, looking for a bail-out, courtesy of Mr and Mrs Joseph Soap of Gullible-At-Sea, also demanding that the “toxic assets” (those’ll be debts which will never be paid, then) be taken on by taxpayers whilst the banks continued to rake off the top line from profit-making accounts.

It is to his credit that the Chancellor extracted significant pounds of flesh from these banks in charges for the liquidity handout they received.

Here’s a very interesting fact to ponder next time you’re trying to have a cheque cleared through our banking system, where processes move at the pace of traffic in King Street on a rainy Thursday night, the week before Christmas – $6bn was reputedly taken from the UK Lehman Brothers’ UK operation on a Friday evening so that it could be in the US operation’s empty coffers on the Monday morning. As the author observes, this

“demonstrates…how quickly money can be moved from one jurisdiction to another”.

Of course, when it suits the usurers.

It is to Darling’s credit that much of the technical content is made easy to understand, even to economic illiterates like your reviewer. He is also very clear on timescales, forensically-sharp on the decision-making processes and pays suitable tribute to a Treasury team worked to exhaustion putting measures in place to prevent meltdown.

He stints neither from taking credit for saving the banking sector – and by definition everything else in the economy – from collapse, nor shies away from admitting where errors were made.

Among those errors was the Prime Minister’s approach to the 2010 General Election. His “Tory cuts v Labour investment” was a line easily seen through, a false promise which the electorate didn’t buy. Darling’s view, over-ruled, was that voters could be persuaded that whilst cuts were to be made, they would accept that they did not need to be made to the degree and on the timescale gleefully endorsed and seized upon zealously by public sector-despising Tories and their Lib Dem patsies.

As sometimes sweet relief from the incessant round of IMF, G7 and G20 meetings, Spending Review speeches, Budget statements and Treasury late-night sessions, Darling writes affectionately about his family, the social and charitable aspect of life in No 11 and of his bolt hole in the Hebrides. He comes across as mild-mannered, thoughtful, loyal and reliable. He describes himself as “managerial”. That’s a fair self-assessment.

Of course, this insider account is one-sided, although credible. It will be interesting as others’ takes on the financial crisis are published and comparisons can be made.

So, would I have a pint with the former Chancellor? Yes, without a doubt, if only to point out that “the late Tommy Docherty” referred to on page 119, is very much alive.

Your round Alistair, just don’t put it on expenses.

Back From The brink. 1000 Days at No. 11
Alistair Darling
Atlantic Books.
ISBN 9 780 85789 279 9


Jul 012011

In a week where the media have been vilifying public sector workers taking strike action to protest at government cuts and pension changes, little coverage has been given to alternative proposals for dealing with the UK’s economic deficit. Patrick V Neville gives his views.

On June 30 we visited two picket lines and attended a meeting of the Public and Commercial Services Union (PCS) to understand their feelings on cuts in public services and to show support for the workers who, against the wishes of the government, organised strike action.
Needless to say, PCS members we spoke to felt unhappy about our nation’s financial situation.

If the full cuts proposed are implemented, one in every five public service jobs would be lost, adding further to the UK’s unemployment rate. Not only could there be fewer jobs, but those who will still have a job available to them face cuts to their pension schemes.

Each worker in government pension schemes could see their contributions doubled or even tripled. To the best of my knowledge, this extra money contributed will initially end up in government funds – but with rising poverty, corporate tax avoidance and evasion and rising prices of consumer goods, will there even be money available for pensions in a few years time? If so, will the cost of living become too expensive for the average person to survive?

Investment in jobs and public services must be in place if we desire a future free from poverty and we could avoid the majority of public services cuts if we take the right course of action.

Corporate tax loopholes are estimated to be costing the tax payer £25 billion a year.

Since moving its headquarters to Switzerland, Boots has reduced its annual tax bill from £100m to £14m, a saving enough to employ 4000 NHS nurses.

Rather than closing tax loopholes, we are making cuts in the public sector.

Billionaire Sir Philip Green is to advise the government on how best to plan for the cuts, rewarding himself hugely in doing so. Sir Philip is the owner of the Arcadia retail group which includes Topshop, Topman, Burton, BHS, Dorothy Perkins and Miss Selfridge. The company is registered in the name of Sir Philip’s wife Tina, who resides in Monaco and therefore pays no UK income tax. This arrangement has allowed the Greens to save around £300m in UK taxes.

Tax evasion and avoidance aside, who have we bailed out?

The Royal Bank of Scotland was rescued with £45 billion of public money. This represents over half of the £81 billion planned in cuts over the next four years. Rather than being allowed to stay open, the bank should have come to terms with closure.

Public spending cuts are more damaging, and minimising them and their effect is more important than encouraging risk-taking bankers to carry on trading.

UK Uncut has leafleted members of the public near the premises of targeted retailers to inform them of tax avoiding measures taken by these retailers.

I would encourage anyone wishing to preserve a future free from poverty to choose where they shop carefully, to write to politicians and businessmen, to contact journalists to demand coverage of tax avoidance and evasion and simply to consider bringing up these issues with friends and relatives.

Jun 292011

 With thanks to Mark Chapman.

Civil and public servants across the UK and from within Aberdeen & Inverness Revenue & Customs Branch, will be joining teachers, head teachers and university lecturers striking against attacks on pensions, jobs and services on 30th June.

The government wants to make public servants work at least:-

  • 8 years longer,
  • pay double or triple more per month
  • not get any benefit from that whatsoever to receive a reduced pension
  • accept real term pay cuts of 10% which is not only affecting the standard of living of public servants, but is already reducing the worth of their future pension entitlement

They say  ‘we are all in this together’ but the bankers are still getting their multi-million pound bonuses for failed banks owned by the taxpayer and the majority of the cabinet are millionaires.

In PCS Aberdeen & Inverness Revenue & Customs Branch we will be striking on 30 June.  There will be picket lines at all branch offices, but in Aberdeen as well as having a picket line, PCS representatives and members will also be joining together for a union breakfast followed by a cross unions meeting in the Aberdeen Trades Union Council Social Club at Adelphi at 12pm.

With inflation at over 5% in the last 2 years, the current pay freeze on Civil Servants pay actually represents a real terms pay cut of at least 10%. Probably more when you take account of rising costs. We have also had an increase in National Insurance contributions and VAT. Aberdeen PCS members’ standards of living have already been severely attacked and eroded and we are not prepared to accept any further cuts when they are totally unnecessary, especially when it is clear that the increased pensions contributions we are being asked to pay are going to pay off the deficit; these increased contributions are not being invested for the benefit of the employees.

There is £120 Billion of unpaid, evaded or avoided Tax to be collected and the UK, the 6th largest economy in the world, holds £850 billion in banking assets from the bailout of the banks – this is more than the national debt.

Mark Chapman, Branch Chair of Aberdeen & Inverness Revenue & Customs Branch of PCS Union said:

“The government admits that money cut from pensions will go straight to the Treasury to help pay off the deficit in what is nothing more than a tax on working in the civil and public sector. The very modest pay and pensions of public servants did not cause the recession, so they should not be blamed, punished or demonised for it.

“Unless ministers abandon their ideological plans to hollow out and attack the public sector in the way they propose, they will face industrial action on a mass scale on 30 June and beyond.”

An AO (Admin Officer), 38 yrs of age added:

“I’ve worked out that I will pay an extra £48.75 per month, have to work 7 years longer than I expected and will lose approximately £19,000 from my pension too.

“I cannot afford this. I already struggle to make it to pay day at the end of the month and this all because this government wants me and people like me to pay for a crisis caused by failed banks and the irresponsible non-investment decisions of those who run those banks.

“This is not equality of sacrifice, is not fair and is criminally unjust. This is on top of an expected pay freeze which is already making life harder for me and is already hitting the future worth of my pension”

There will be picket lines outside most major HMRC buildings and other Civil Service buildings, and services to the public will be disrupted.

Striking Aberdeen PCS Union members will join teachers, other striking workers and representatives from other Unions at various meetings and rallies up and down the country, showing support and solidarity for this action.

PCS, the Public and Commercial Services Union is the largest Civil Service Union. It has over 290,000 members in over 200 departments and agencies throughout the UK. It also represents workers in parts of government transferred to the private sector. PCS Union is the UK’s sixth largest union and is affiliated to the TUC.  For further info See:


Nov 262010

By Mike Shepherd.

Local author John Aberdein saw his second novel ‘Strip the Willow’ published in 2009. It is set in the near future in Aberdeen, now renamed Uberdeen. Following the cities bankruptcy, its assets have been sold off  to the sinister and manipulative multinational corporation, LeopCorp.

The novel is of course fantastical, but when I met the book’s author in Union Terrace Gardens earlier this year,  John told me that he was amazed as to how much recent actual events seem to have overtaken the satire in the book. While LeopCorp is fiction, the idea of transferring Council assets to a limited company is not.

Last year the Council agreed to set up an organisation called the Aberdeen City Development Company, essentially as a means to privatise or semi-privatise Council assets deemed to be what they refer to as ’market failures’. A key document describing how the company could be set up is the report of Aberdeen City Council Policy and Strategy committee, dated 9th June 2009. It describes how a City Development Company can allow local authorities to “use their assets to realise long-term investment from the private sector for regeneration projects”. They “provide a route to bringing public and private sectors together to pool finance, land, expertise and powers, allocate risks and returns appropriately, and plan and deliver projects more strategically”.

More information emerged about the company in the report to the Council for the enterprise, planning & infrastructure committee on the 9th November 2010. This also included a partially redacted report from the accountants Ernst & Young on how the city development company will be set up. Some details are missing here and other sources have been used to supplement the material quoted from the document in this article.

The new company is to be called “One Aberdeen”. “It will be governed by a non executive board with up to a maximum of 12 directors. The composition of the board will be split between the public and private sector with 6 directors coming from each sector.”

One Aberdeen is the private sector’s Christmases and birthdays rolled into one

Of the six public sector directors, it is understood that only four board members will be from the Council itself, one will be from Scottish Enterprise and one from the Aberdeen Civic Forum. Later in the document it says:

“The chair will be from the private sector appointees and will have the casting vote, meaning that that there is private sector control at parent board level.”

The intent is to transfer assets into the development company. In an email forwarded from the Council executive I’ve been told “There is no question whatsoever of the Council gifting these assets. A full market value would be realised for the Council. The additional value created – which can be shared with ACC – is derived from development activities which the Council has traditionally never undertaken. It is designed as a way of maximising public benefit of assets in partnership with the private sector.”

Some excerpts from the Ernst & Young document give an idea of how the company will operate: “The transfer agreement will set out the commercial details of the transfer and related obligations of each party, including appropriate clauses for profit share between the Council and One Aberdeen.” …. “The delivery approach to each commercial development will be influenced by the nature of the investment and identified partner. This could involve development through a series of joint ventures or other forms of public-private partnership for example, via a development agreement.”

The minutes of the ASCEF meeting held on Monday the 23rd November 2009 states the following:

“Partners, including ACSEF, would have the opportunity to transfer assets to the CDC, and could fit into the structure as a founder member, associate member, or as part of the advisory panel for the venture.  The Chairman indicated his willingness to discuss this at a future meeting of the Board.” It is not clear what this means; ACSEF is a publically funded economic forum for the Aberdeen area and not a property group, although the board of ACSEF has members from private business. It may be indicating that private companies will also be allowed to transfer assets into the development company.

The Council have identified 59 assets deemed suitable for the development company. Of these, 14 have been short-listed as suitable for development. The Council have not revealed which assets these are. The Council executive informed me that:

“This was a draft list. Discussions are ongoing with asset management. Any short list will not be finalised until the new year for the April 2011 Finance committee.”

In a previous committee report (9th June 2009) the following was stated:

It is widely recognised that the provision of land assets into any development vehicle is key to help “kick-start” the re-development process. As such, external consultants have appraised 12 land assets owned by the Council with a view to demonstrating the development potential available to the Council through its asset base. This, in turn, would then help in the consideration of this development potential being levered via the concept of a city development company vehicle. The example sites considered were agreed within the Council Officer Working Group and were as follows:

1 Aberdeen Exhibition and Conference Centre

2 Bon Accord Baths

3 Chapel Street Car Park

4 Denburn Health Centre and Car Park

5 Granitehill

6 Greenferns

7 Land at Carnie

8 Land at Haudagain roundabout

9 St Nicholas House

10 Summerhill Education Centre

11 Union Terrace gardens

12 Westburn House and Park House/Choices”

It is important to note that item 12 “Westburn House and Park House/Choices” refers to two buildings and does not refer to Westburn Park itself. This list should only be taken as indicative of the assets that are likely to be selected next April.   I have been told that Union Terrace Gardens will not be one of the 14 assets. The development of the Gardens is proposed to be carried out through a separate company or trust to be formed in 2012.

the Council are more inclined to the interests of big business rather those of the ordinary citizen

Fourteen out of the 59 assets have been short-listed for development. The remaining 45 assets will either be sold or kept on the shelf by the Council. Although the Ernst and Young report does not make this too obvious, it is likely that some of these assets will be sold to fund the company. Again, the Council have not provided any details as to which assets will be sold.

The aim of the company is outlined in the Ernst and Young document:

“It is proposed that the delivery vehicle will be created as a charity with the purpose of positively contributing to the regeneration challenges of the City. An application for charitable status will be made following approval of this business plan by elected members. The vehicle will deliver a sustainable urban regeneration programme that will contribute to, creating local jobs, maximising economic development opportunities, meeting housing demand and tackling the spatial concentration of deprivation in Aberdeen. The geographical focus will be on the priority and at risk areas … “

These are identified as:

Priority neighbourhoods
At risk neighbourhoods

Seaton Stockethill
Tillydrone George Street
Woodside Mastrick
Torry City centre
Middlefield Froghall, Powis and Sunnybank
Cummings Park Garthdee
Northfield Old Aberdeen


The Ernst and Young document also mentions that: “A wholly owned subsidiary will be established (“Property Company”) with the purpose of undertaking riskier and more commercial projects and activities which do not fall within the charitable purposes and objects of One Aberdeen. Any projects which do not meet the charitable objects as defined within the Articles will be conducted through the Property Company.”

Although the aims of One Aberdeen are largely charitable, it has already received considerable criticism.

As has been referred to frequently in articles in the Aberdeen Voice, it has been a long time since the Council and the people of Aberdeen have been in accord. Given the response to the city square consultation, there is widespread distrust of the motives of the Council; a suspicion that the Council are more inclined to the interests of big business rather those of the ordinary citizen. The Ernst and Young report appears to differ: “A failure to consider the opinions of the wider community and halting to gauge public opinion has plagued a number of high profile developments in the North East of Scotland.” One suspects that the wider community referred to here may be the business community.

There is also criticism that control of Council assets will be surrendered to private business. One online blogger made the comment that “One Aberdeen is the private sector’s Christmases and birthdays rolled into one providing them with access and influence over empty buildings and land which will result in ‘surplus’ public assets being sold off for private development.”

it has been a long time since the Council and the people of Aberdeen have been in accord

The Council’s dealings with private business has proved less than impressive to date. The Press and Journal reported last month that the Stewart Milne Group (SMG) had lost an appeal in court after disputing a land deal with the Council. The Council had sold 11 acres of land at Westhill for £365,000, having made  the condition that it would share any profit made by the SMG selling or leasing the land at a future date. The land was then sold to a linked company, Stewart Milne Westhill, for £483,020, who then stated that there was no money in the deal for the city Council because the sale had cost them £559,696. The Council then later argued in court that the land was worth £5.6 Million, eventually being awarded £1.7 Million.

It is also possible that the money generated by the company could be used for purposes other than for regenerating the priority areas of the city. I heard one councillor state at a public meeting recently that he thought it would be a good idea that any profits could be used to fund the Exhibition Centre, a very early example of potential ‘mission creep’ for the development company. The Exhibition Centre owes the Council £28 Million and has been heavily subsidised by the Council in recent years.

Aberdeen One is likely to be set up in April next year, at which time it should be known which assets are to be transferred in the company. April should prove to be a highly fraught month for local politics. On April 27th the full Council meets to discuss the business case for the company intended to take the highly-controversial City Square project forward. They will also vote to approve assigning a lease for Union Terrace Gardens to the company even though it will not be a legal entity until 2012.  The Scottish Parliamentary elections take place the week after on the 5th of May. Interesting times as the Chinese would say.