Taxing Times: A fair tax model for iScotland.

I was drawn to a statement made by my friend Iain Lawson, the former member of the SNP’s National Executive, on his Facebook timeline recently:

“Accountants are unhappy about the Scottish Government tax proposals. I can understand this, what would happen if we had a simplified tax system without hundreds, if not thousands of loopholes?

“Let me tell you from my experiences in Estonia, accountants have to find new ways of making money other than devising tax avoidance schemes.

“Companies have to pay the true tax based on their true profits. What's not to like?”

This set me thinking again as I have put quite an amount of time and thought into considering future models of a Scottish tax system and it prompted me to try to crystallise the better part of 2-3 years of musings into some semblance of order.

A fair and transparent taxation system is a relatively straightforward thing to devise and implement whilst a complicated and opaque system is symptomatic of an arrangement pandering to vested interests in a scatter-gun approach with a certain lack of joined-up-thinking.

So here goes…

Corporate Tax

A great deal of column inches have been written about Corporate Tax (CT) so let’s begin there. The arguments have been pushed along by HMG up to now by my way of thinking and not led by Holyrood. What do I mean by that? Well, the main thing that is talked about in terms of lowering the CT rate is that it will cost the economy in terms of lost revenue. Yes, that is true if you let that isolated fact stand alone but if you then consider the grander purpose of lower CT then that argument is rubbished.

In plain and simple terms, if CT is lower then, all other things being equal, there is the creation of an incentive for inward investment to generate new employment opportunities. These new opportunities see people in work whose salaries attract personal income tax (PT) and national insurance (NI) plus the logical local spend of this newly created wealth. This leads to downward distribution to retail business – among others – and a corresponding entrenchment or expansion of earnings and existing jobs in that sector with corresponding CT, PT and NI enhancements from these secondary businesses. It’s a very simple “trickle-down” progression which need not have a logical end as long as we can establish interconnectivity between the various elements of the economy. Of course there will be spillage in that our Scottish economy will not be hermetically sealed! But the fiscal drivers will be domestic.

This type of scenario is what has driven the Irish economy along. Don’t put all the blame on the boom and bust of the property bubble and the economic crisis as that was a universal phenomenon which just happened to be exacerbated in the Republic because, to a great extent, much of Ireland was starting from a far lower base than most of Western Europe. The CT rate of 12.5% has been a huge success story with so many foreign companies flooding into Ireland to take advantage of a light fiscal touch and an educated workforce. There is also a fallacy abroad about Ireland in terms of CT which needs to be cleared up. The 12.5% rate only applies to trading income – non-trading income is taxed at 25% so Ireland is an unsuitable place to park so-called offshore assets as there is no advantage to doing so. Or more precisely there is no advantage to the Irish state as this type of income does not offer trickle-down benefits to society.

There are plenty of models out there in the EU which are attractive and pro-business. The Estonian model gets a lot of mileage for its 0% rate on undistributed corporate profits. But there is also the 5% flat rate on profits under ca. €290k for the so-called Lithuanian "micro company" – a very competitive small business vehicle. This model is already being marketed beyond Lithuania’s borders as a tax-efficient holding for businesses with a quasi-transnational footprint – crucially once a business has been taxed for CT in one member state of the EU then there is no remaining liability for further taxation in another member so paying 5% in Lithuania is a better choice than some other jurisdictional levies. This suits Lithuania today.

Luxembourg has several attractive business formation models and it's no accident that an increasing number of multinationals lodge their IP there with a sub-6% income tax rate on royalties arising. It's a hoot when HMG and HMRC squeal about Luxembourg VAT on things like Amazon but at the same time fail to tax the big boys at anything like statutory rate – just witness Pfizer's eagerness to become UK domiciled. Luxembourg has cleverly switched its company regulations in a rather fluid manner as EU legislation develops and will undoubtedly continue to do so. For anyone not familiar with Luxembourg Ville, a huge financial zone has been built in an entirely new part of the city on the plateau of Kirchberg. This is a purpose built quarter which houses a great many international banks, accountancy firms, auditors and insurance companies along with conference centres, EU institutions and retail centres. All of this in a zone that conveniently reaches towards the airport.

Maltese corporate taxation could teach us a thing or two with what is, at face value, a high CT jurisdiction – 35% – but with rather generous rebates for legitimate operators that can be reduced to a very palatable 5%.

Personal Income Tax

If there is one area of government policy that is guaranteed to get virtually everyone excited it is personal taxation. This is an area fraught with dangers at election time for any potential leader of HMG and many a UK General Election has been won and lost on personal taxation policy.

But, in principle, PT need not be such a thorny issue. It is the very complexity of the system as laid down by the Chancellor of the Exchequer and administered by HMRC that creates such electorally charged issues.

A flat rate PT regime as a jumping off point for iScotland would be a very pleasant culture shock to my experience. There are various schemes in operation throughout Europe and although some are very attractive such as 0% in Bosnia we need to have some form of realism about what taxation is actually collected for. If we wish to have a healthy state sector then we require healthy input and that starts with realistic PT.

If a future Scottish Revenue Service (SRS) would pursue a fundamentally flat rate scheme it would offer so much clarity but the key point to the layman would be that when an employer tells you that you will earn £X per week or per month then you will be able to calculate with some degree of certainty what your take-home will be – something quite unimaginable with HMRC.

This is an area of taxation where clarity should be welcomed by all-comers. As Iain suggests it is the accountants who are the winners with the opaque regulations of a tax system that runs to 11,000 plus pages.

Then the flip side of the coin might be offered.

Are you sure that your accountant is as well versed in absolutely up-to-date HMRC regulations as he needs to be to offer you a full service? I am not sure if that question can be universally answered with a “yes” by all of us. I had the personal experience of a fairly young and generally go-getting accountant who was on the staff of a leading Aberdeen law practice a number of years ago. He was well versed in saving clients’ money through judicious financial planning of estates and trusts. But at the same time he was costing his own employer thousands of pounds every month, as was pointed out to him one evening, because he was not up to date on the latest allowances for company cars.

The silly stuff is in the detail and that is the largest part of the problem.

So, as a wise man once said, KISS – Keep It Simple Stupid!

National Insurance

We don’t look at NI with anything close to the same keen gaze as we do other forms of deductions. It’s just there. It comes off before tax and that’s that. It doesn’t seem to hurt so much. But NI is just a PT by any other name. Only in this case it looks after a narrowly defined area of benefits which are closely attached to the person such as pension, healthcare, unemployment cover etc. Therefore it is impossible to calculate a gross rate of deduction without factoring in NI. In some jurisdictions NI is not levied separately and the PT figure is indeed the gross deduction but that varies.

Whilst I would argue for flat rate PT I would, conversely, argue for a sliding scale of NI. This proceeds from the premise that some of the different elements in the NI payment might be permitted to be comparatively less steeply increased but pension provision can never be enhanced enough if the individual concerned can afford the contribution. Private and employer pension provisions are other beasts entirely but an affordable and properly funded state pension to the individual can be something new that iScotland gives as a reward for a productive working life, something that is impossible to imagine with HMRC and the DWP at the helm.

Inheritance Tax

As the author of the 2010 Conservative Party Manifesto and the Chancellor of the Exchequer-in-waiting George Osborne made an explicit pledge to raise the threshold for Inheritance Tax (IHT) to £1 million in the UK. He reaffirmed later in 2010 that the increase would take place “in this Parliament” but despite that this promise has completely disappeared without a trace.

IHT is a tax on death. It is a tax imposed on the survivors of those people who have done reasonably well in life and salted enough away to leave something to their kids and their grandkids. It’s not adding insult to injury, it’s adding insult to death!

This is another political football that is kicked around at Westminster election time but the net result never seems to be anything too radical and the threshold has crept up well below the numbers indicated as appropriate.

Employment Costs

The primary employment costs are similar to those as described under NI, namely pension, healthcare and unemployment contributions although this can and does vary from one country to another.

The levels of employer contribution can be fairly light in some tax regimes and the flip side of Estonia’s 0% CT on undistributed profits is a social security contribution of 33% over and above an employee’s gross income. As an example an annual gross salary of €10,000 paid to an employee in Estonia would see the employer actually make gross payments of €13,300. Other examples of employment costs are 31% in Hungary and 23.75% in Portugal.

So that’s the main components of direct taxation. From the point of view of indirect taxation we should consider mainly VAT.

Value Added Tax

The case of VAT in the EU is a little different from the main direct taxes. Variability of rate of VAT is limited in that the lowest regular rate is 15% with reduced rates available in various sector down to as low a rate as 0%. The application of reduced rates and the sectors in which they can be levied are dependent upon negotiation but as things stand currently the UK has the highest number of zero-rated categories.

The current issue of using low VAT jurisdictions for e-business and mail order invoicing purposes, such as Amazon out of Luxembourg, is set to change soon with the burden of VAT becoming fixed by the address of the purchaser and not the vendor. So there will be no accrued advantage in operating from a low VAT base as the invoice will have to reflect the relevant VAT rate at point of delivery of the goods. For instance a package of new books shipped to Ireland from inside the EU will attract a 0% rate commensurate with the Irish exemption but the same package delivered to Denmark will attract a rate of 25%.

These new regulations will iron out a few bumps in the VAT system and point companies squarely towards CT advantages. So we can look forward to far less VAT-vectoring in transnational trade within the single market in the future as there will be no distinct advantage unless the local VAT rate alone offers justification for business location.

A Scottish Revenue Service

I am convinced that the future SRS should be a fairly light touch organisation. By this I do not mean that they should be lax with regulation. What I do mean is that the level of transparency should be such that only a fair-to-middling level of accounting competence would be needed to be able to see all businesses report to full satisfaction with no need for clarification and cross-referencing with the SRS.

When the taxation regime is built in a fundamentally simple and straightforward manner with concrete rules and minimal exceptions then the possibility to be “creative” disappears. If the rules are foolproof then even a fool should be able to get it right by definition. Also if errors are made then the offender should be admonished or punished accordingly in an “across the board” manner.

Potential Tax Model for iScotland

What follows now proceeds from what I have written above and is only my own personal model for a taxation structure in iScotland. This bears no relation to the Scottish Government’s White Paper, Scotland’s Future, and can be ripped to shreds at will if anyone so desires. I’m not going to try to tackle Capital Gains Tax and the issues of Excise and Duty payable on fuels, tobacco and alcohol etc. These subjects will be returned to in later separate articles.

1. Corporate Tax – I see the need for a benevolent CT system to attract foreign investment and jobs to our country. I also see a benevolent CT regime as an enticement for undecided parties to reaffirm their commitment to Scotland as a place to do business. To this end I would suggest something of an amalgam of the examples that I described earlier.

I would take the Lithuanian micro company model and impose it as a workable analogue across the board. Let all companies have their first £250,000 of profit  – distributed or otherwise – taxed at 5%. Further to that I would impose a continuing CT rate at 5% above £250,000 on undistributed profit without ceiling and have distributed profits taxed at a rate of 15%.

2. Personal Income Tax – We need to be realistic in our assessment of what is both viable and fair in the PT rate for iScotland. I would favour a flat rate with a reasonably high initiation point. I suggest a taxation threshold of £15,000 with everything under that level of income being 0% rated. All income above £15,000 should be taxed at a flat rate of 22.5%.

There is the question of allowances for married couples or civil partnerships. I would replace this with a unique “pooled allowance” which might permit any two permanently interlinked individuals to enjoy a joint taxation threshold that is substantially higher than the single person’s allowance. This pooled allowance could offer a 0% taxation threshold of £25,000 across the two incomes in a relationship. This may not sound astoundingly generous but if the scenario sees, for instance, one person working and the other staying at home to look after children then the working partner will enjoy a further £10,000 of income at a zero rate which, if the salary is equal to or more than £25,000, will equate to £2,250 more in the pocket every year.

Furthermore I would offer a revolutionary incentive to those on a pension – I would make pensions exempt of all PT for a period of at least 10 years. That’s right, completely abolish taxation on pensions for the time being. In the intervening period there can be a debate on how best to address the issue of taxation on pensions but I would favour a pledge of a high threshold and shallow entry such as nothing taxable below £30,000 and even then only at a rate of 5% with a step up to 10% at £50,000. The vast majority of pensioners will be unaffected by any return to taxation and those who will eventually be taxed will be those best able to afford the contribution. As an example someone with a pension of £40,000 would only pay an annual amount of £500 in PT and in the case of a pension of £60,000 that figure would be £2,000.

3. National Insurance – As I mentioned earlier I would tilt NI contributions in the direction of pension provision, but that should not be at the expense of other sectors that the payment is intended to provide for. My base NI threshold would be at £12,000 – let the first £1,000 every month be free of contribution. At £12,000 the rate of NI would be 4%. At £15,000 when PT kicks in I would see NI rise to 5%. Then at every £5,000 increment from there upwards I would add 1% to the NI rate – 6% at £20,000, 7% at £25,000, 8% at £30,000 etc. – up to a maximum contribution rate of 15% at an income level of £65,000 and above. All contributions up to 8% would be split as required between the different sectors that NI is designed to provide for but anything beyond 8% should be explicitly ring-fenced as supplementary state pension provision. The entry to this NI system is not nearly as steep as the UK version. The cost will dig deeper but only on the basis of affordability.

The current UK system kicks in at an income level of £153 per week or £7,964 per year at a rate of 12% but then drops to 2% at a level over £805 per week or £41,860 per year. Unfortunately that level of NI contribution sees both too steep an entry point and too shallow a rate reduction. The earner is penalised too abruptly at too low an income but when he or she can most afford it the rate is relaxed. This will always create deficits in the key areas of public spending that are most critical to us all at our times of maximum vulnerability – old age, illness and unemployment. A graduated and increasing NI burden has the potential to secure better provision for our times of need,

4. Inheritance Tax – More revolutionary stuff here with IHT and follow the lead of Australia and New Zealand – scrap it completely. It can fairly easily be argued that the means of collecting IHT would be at least as costly as the actual tax take. Scotland is not the Home Counties after all and the number of qualifying estates is relatively low by comparison. It can also be fairly easily argued that by having accumulated an estate sizable enough to attract IHT then the person concerned was likely to have been taxed more than adequately whilst building that estate.

Therefore remove IHT completely and do not tax the dead!

5. Employment Costs – This is a difficult one as we need to be fair and equitable to society in general without scaring off employment opportunities. At the same time we need to recognise that there must be a reasonable level of contribution from an employer. In the tax year 2014/15 in the UK the rate is 13.8% for all earnings above £7964 with a few exceptions. Bearing in mind the CT benefits as specified above I would levy a flat rate of employer NI contribution at 20% from an entry level of £12,000 – the same threshold as for employee NI contribution. This is certainly higher than the existing UK system but is more than compensated for by other allowances in the general system.

6. Value Added Tax – VAT is of course a transactional or consumption tax that is indirectly collected and disbursed along the supply chain of products until eventually being levied upon the end user. The system is fairly standardised within the EU in terms of its administration although not, as pointed out earlier, regarding its levels. I would argue for the lowest headline rate of VAT as permitted by the EU at 15%. I would also argue for the retention of the UK’s zero-rated sectors on what are regarded as essential items. The reduced rate can be as low as 5% and that would seem to be a reasonable level.

Summing Up

So that’s where we are at just now and that’s where I see us going in the near future with iScotland. We should aspire to a highly transparent and completely linear system of contributions which create scenarios that are easily read by the contributor.

When it comes to arguing the features and benefits of such a system it is very important to treat this model as a whole and not to separate out the different components as doing that simply creates obfuscation. Westminster has skilfully managed to separate employment costs from the taxation equation and stand them up as separate and problematic issues, or more accurately, in my honest opinion, the Scottish Government has not offered a persuasive, inclusive narrative for reconciling taxation and employment costs in a joined-up manner. As Westminster drags each issue away from the body of the whole it is quite easy to interrogate one element as unsustainable but that is all about contextualisation and the boys from London are the undoubted experts in this form of misleading subjectivity.

I think part of the blame for this is not through any fault of the Scottish Government getting hauled off-message and nor do I think it is because of a lack of consideration of the issues. Instead I feel that it is in some part down to John Swinney’s more cerebral approach to his portfolio. He’s not a Bullingdon brawler like George Osborne or as combative as Ed Balls. Instead he attempts to argue reasonably and rationally with no aggressive attempt. By trying to tell the truth in an inclusive and rounded manner John Swinney has not made the sound bites that the media crave and the electorate hang onto. This is not a criticism of the Finance Secretary as he has been singularly successful in getting to grips with the big picture of Scottish finances with one hand tied behind his back and the other in a boxing glove!

So maybe I need to contradict myself here. Maybe we need to cherry-pick some of the good stuff out of the whole and rub it into the faces of the media until a little of it sticks and they pop their heads out looking for more. Whatever it might be it should create a media and Unionist feeding frenzy. But that is good. Then we can bring in the heavy hitters of Alex Salmond and Nicola Sturgeon to underline the interconnectivity of the entire system.

When Michelle Mone and her ilk bump their gums there is a lot of irritation but some uncertainty as to why she is totally wrong. She is NOT totally wrong. Yet! The inclusive narrative has not been presented coherently. When it has been presented coherently then we can all be certain that she is the stooge that we feared all along.

I would ask everyone to be interactive here and offer as much criticism as you like. The model outlined is only my model. Tell me how to improve it!

Opportunities (Let's Make Lots Of Money)

Phil Lawrence, Tallinn, 13th February 2014

So it’s official. All the Queen’s horses and all the Queen’s men have decided that Humpty Dumpty (AKA Oor Eck) should have a great fall and unlike in the nursery rhyme they will be the perpetrators, not those rushing to the aid of the afflicted. Gideon, Edward and Danny have closed ranks and decided that we are not worthy of continued use of our own currency.

Giddy George delivered his message today with relish and a self-satisfied smirk as his blood brothers from the other Unionist parties regurgitated potted versions on his theme.

Barely had the hot air subsided when no less a figure than the Research Director of the esteemed Adam Smith Institute, Sam Bowman, was waxing lyrical on the benefits of using the currency without formal agreement pointing out that, “An independent Scotland that used the pound as its base currency without the English government’s permission, with banks continuing to issue notes privately and private citizens free to choose any currency they wanted, would probably have a more stable financial system and economy than England itself.”

Bowman then noted, “It’s up to Scots to decide whether they want independence, but the Chancellor’s announcement today should be seen as a feature, not a bug.”

What? Wow! That wasn’t in the script! Who are these upstart Adam Smith chappies? Well they just happen to be the Libertarian think tank that largely sculpted a great deal of Thatcherism, especially in privatization policy, and a big chunk of Tony Blair’s populism. OK, that’s not the best recommendation north of the border but if one thing’s for sure it’s that the Adam Smith Institute knows what will fly and what won’t.

So we should have the pound without the benefit of policy input. It’s the same way that some Latin American countries use the US dollar and a number of European states outside the EU have adopted the euro.

This is a good option for any country looking for short- to medium-term stability WITHOUT having to spend in shoring up the value of the currency. If there is a run on sterling – and there will be – then Scotland can detach itself without drama or fanfare and then our commodity-backed currency (Scottish Crown, Merk, Pound or whatever) will find its own par at the inevitable higher level. Look out NOK!

I just always saw the currency union as a bit like Devo-Max – a halfway house measure that was neither fish nor fowl. I'm not unhappy to see it being undermined but I suspect that this may have been the idea all along... You have to smoke out the objections as early as possible.

Along the way several major Yes policy announcements have stunk to high heaven from my standpoint but they have been seen to be tactical markers thrown down that Project Fear should skip around. Of course they don’t do that and just steam right through the middle thereby proving that Bitter the Gither is completely reactive with not one proactive notion in their combined head. They don’t predict, they only lash out. They don’t get subtlety and can only bludgeon. That’s ideal for Yes as they can set the agenda. 

Even subliminally?

Consider this. It is only in recent weeks that the Yes campaign has ramped up currency union as probably the prime issue. Was this all about timing? Was this designed to get the Unionists fixated on the Sterling Zone and cause them to shoot their bolt? Alex Salmond is not just the best parliamentary debater alive in the entire UK today, he is probably the best long-term strategist as well.

The more I think about it the more I hear the playground chant, “You fell for it! You fell for it!” Did Gideon et al fall for it? I’m inclined to suggest that this may be the case.

In some more smoke and mirrors I also can imagine that what we saw today was pounced upon by the Unionists for another altogether different purpose. I smell a rat and his name is Nigel. This is not just all about Scotland. The Establishment is closing ranks to save their skins in England. This is designed to appeal to Middle England as UKIP look likely to win the Euro elections in 3 months time. It seems directed at one audience but resonates with another. Tactically, at face value it might be regarded by some as smart. Strategically it is a disaster.

Am I giving Oor Eck too much credit? Did the stars just align themselves all on their own? Or was there a wee boost somewhere?

So at the end of today where do we stand? The Unionists have probably been enticed to blink way, way, way too early with the Adam Smith Institute – one of the leading free market research establishments on the planet – patting Scotland on the back. Add to that the previously stated view of the US Federal Reserve on “borrowing” a currency being that we will, “consequentially have far more prudent and stable financial systems than if they were part of a formal currency union.”

All in all not too bad when the media were waiting for Gideon to tap in his open goal. Hmmm, maybe cricket’s his game. Or maybe he’s a wet bob? (That’s public school jargon for a rower, don’t you know?)

I am inclined to believe that Eck is less Humpty Dumpty and more Little Jack Horner – he put in his thumb, and pulled out a plum!

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All the cloak and dagger stuff in the past 48 hours has made me think again and again of card-playing analogies. Here’s a few commonly used terms and how they apply today:

George Osborne – the Dealer (who oddly lays all his own cards out face-up!!!)

Ed Balls – the perennial Joker

Danny Alexander – the Busted Flush

Perm any 2 from those 3 – a Low Pair

Alex Salmond – Full House

Going Green? It's a Gas - Hydrogen That Is

by Phil Lawrence 09/12/2011

The commitment to green energy on the part of the SNP and its leader, Alex Salmond, is a commendable line in the sand drawn as a bold and progressive policy. The target of generating 100% of Scotland’s energy needs from renewable sources by 2020 is an unprecedented ambition. But is it a realistic aim? And will the benefits really be there when virtually every commentator pours scorn on the vision of the nationalists?

Scotland has oil and gas aplenty so why in the name of all that is sacred would we need to look to a mega-industrial scale version of the life pursued by Tom and Barbara Good in their Surbiton semi? Why indeed. As the informed gentlemen of the press continually tell us the oil and gas will be gone in 10/20/100 (delete as appropriate) years so there is no point in basing an economy on depleting resources. 

Well OK, that sounds reasonable but how about if we use those depleting resources hand-in-hand with resources that are sustainable and renewable?

Hold on a minute, that’s not in the script! 

And how about if at the same time we lessen our reliance on the depleting resources so that the likelihood is that they will last even longer than anticipated?

Now that’s just plain cheating!

Yes, we are a right bunch of cheats aren’t we?

The long and the short of it is that Scotland has a rather unique position in Europe in that we are jutting out into the North Atlantic at the mercy of the wind and the tides but these two massive forces of nature are destined to become our very best friends. By reasons of geography and connectivity we are best positioned to exploit the potential of these gifts. The technology to best harness the wind and the tides is improving month by month and subsidiary technologies are developing hand in hand with this. 

As one example there is a green brains trust tucked away in Luxembourg working on various renewable options but their particular Scottish option is a giant battery. This is something on the scale of a 20ft container attached to a small wind turbine. The turbine generates electricity when there is adequate wind and keeps the battery charged. When the wind goes down the battery takes over and provides mains power until such a time as the wind rises again. This scheme is designed as a replacement for diesel generators for our islands so that small communities can become energy self-sufficient. Can you imagine it? Batteries that can belt out mains electricity.

Take a look to Methil and we have the Hydrogen Office. This test-bed demonstrates that wind power can look after the generation of electricity and excess capacity can be used to hydrolyse water to create hydrogen gas. This stored hydrogen can then be burned in a heating system or syphoned off and used to power vehicles. The beauty of hydrogen of course is that when it is burned with oxygen the sole byproduct is water. Pure simple water. From water to water with all the power in between.

When we gaze to the hillsides north of Dunblane as we drive up the A9 and see the turbines stacked on the slopes as wind-farms we only imagine the electrical power that they can send into the grid but we do not contemplate what else they might be doing. Hydrogen farms? Why not? We certainly have no shortage of water on those hills! Hydrogen farming might not be as daft an idea as it sounds if we consider the common objection to wind-farms that electrical transmission efficiency is not always suitable from the more inaccessible locations in which they are located. Gas storage and pipeline technology have their own limitations but not when it comes to moving the product to a convenient distribution point. 

Fuel cells continue to be prohibitively expensive and this seems to be a non-starter in the motor vehicle stakes in any short- to medium-term solution so this use for hydrogen is very limited. However burning hydrogen in a modified orthodox internal combustion engine remains a clean and efficient propulsion method. A “grid” of hydrogen stations across Scotland, fed by local wind-farms, could offer an alternative to short-range rechargeable vehicles with hydrogen-powered cars capable of traversing conventional motoring distances without the need for an interim charge or a switch to petrol power to complete the journey. 

This connectability of a network of a renewable resource is a quantum leap from the analogical thinking of hydrogen as a difficult to handle fuel. Yes, granted, that can be the case if hydrogen has to be delivered by tanker to point of sale but if production is localised then this major objection can be overcome to a very great degree.

I have to unveil my true colours here. I am no crusading super-green in any way shape or form. In fact in questionnaires I tend to test as the polar opposite of that model of the modern 21st century clean citizen. On the other hand I, like the vast majority of us, am feeling the bite in terms of fuel bills and I am left slack-jawed by the impunity with which consecutive UK governments lie to us about the true level of inflation. For me renewable energy is an opportunity to bring down costs to more manageable levels for the average punter at home in Buckie, Ballachulish or Baillieston. 

A novelty double act

We are currently being wrung dry by Westminster and the plain truth is that the tipping point where tax income starts to drop due to fuel prices reaching a level where consumers will no longer buy with gay abandon has passed. Already gross fuel duty income to the Treasury has started to drop because fuel buyers simply cannot afford to buy the same amount of petrol or diesel that they once could. This is a unidirectional trend as we have been induced to be prudent and we will not be heading back towards profligacy anytime soon. The answer from Osborne and Alexander — a veritable fiscal Jedward — is to only promise to slow the inexorable fuel duty rise and even this can only be accomplished as they have made a tax grab at source on the oil producers in the North Sea and the East Shetland Basin.

Whether or not the people of Scotland choose to separate from the UK at the upcoming referendum we need to consider the long-term fix right now. We need to explore all avenues to make the 100% goal by 2020 a realisable target. Nae-sayers in the mainstream media bombard us with headlines stating the implausibility of the renewables target but the arguments are almost universally thin and rarely if ever coherently constructed: 

We can’t achieve a 50% target in renewables let alone 100%. Why not? Because. But really, why not? Because I said so.

That is truly the sole scientific legitimacy of some of the stuff that is printed in our national newspapers. It’s like a game of “he said, she said” but unfortunately there is no robust player in our media willing to counter this disinformative claptrap. The smear campaign being insidiously leaked into the national consciousness is that green is loony, the SNP is green, ergo the SNP is loony. If you do not buy that then take a look at recent archives of The Scotsman and there is quite a head of steam being built up in that direction — unattainable targets, untested technology, unrealistic results and all with a political slant. It’s as if having an open mind to renewable energy in Scotland is tantamount to tearing the Union asunder. 

This slander must be addressed in a robust manner and a joined-up renewables strategy has to be presented to the people of this land to underline that pervasive fuel poverty is not an inevitability but merely the side-effect of an imposed Westminster policy which might as well have been dreamt up by Jedward.

We have the power to decide our own destiny in the palms of our hands or more accurately we will have it through the nib of a pen in a few short years time but now is the time to act, to coherently compose an energy roadmap which can only enhance the simple buried truths of McCrone and give us confidence to declare that we are big enough, we are clever enough and we have simply had enough!