Problems solved while you wait
It’s been hard to miss the constant shrieking from Unionists in recent days (and indeed, weeks and months) about the consequences of an independent Scotland telling the rUK where to shove its debt in the event of a non-cooperative approach to negotiations. The words “renege” and “default” are repeated constantly, sometimes dozens of times in a single interview, alongside dire warnings that international markets would regard Scotland as some sort of pariah state.
This is of course utter bumguts – to use the proper financial jargon – on about half a dozen levels. An independent Scotland would in such circumstances have no debt, a budget surplus (because our current deficit is entirely down to UK debt repayments – without those Scotland would be in the black BEFORE it even factored in savings from different policy choices, like the £800m a year on defence), and a vast reserve of tangible resources, most notably oil, as security.
The rUK, by comparison, would have a debt of £1,500,000,000,000 and a huge budget deficit. If you were going to lend someone money, would you choose the guy living within his means with plenty of assets, or the guy who already owes his entire annual salary and is still spending more than he earns?
Nevertheless, we were still intrigued to see the comments of Sir Nicholas Macpherson, Permanent Secretary to HM Treasury, in his published advice to the Chancellor today, because we like it when people who aren’t on our side agree with us.
So it was pleasing when Sir Nicholas, strikingly but sensibly, refused point-blank to endorse the position of those in the No campaign who scream that lenders would regard Scotland as a nation in default. “An extensive wrangle about [Scotland’s] share of the debt would increase uncertainty and hence its funding costs”, was as far as he would commit himself to comment on the matter.
And luckily that’s easily fixed.
–BEGIN WRANGLE–
UK GOVERNMENT: Okay, Scotland, how much of this debt are you going to take?
SCOTTISH GOVERNMENT: None.
UK GOVT: But we’d really like you to.
SCOTTISH GOVT: Yeah, well, we’d like you to agree to a currency union, but you say you won’t, and as you’ve already acknowledged that the debt is legally all yours, then with all due respect go f*ck a pig.
–END OF WRANGLE–
If we invite you to come and live in our house as our lodger, but then we don’t pay the mortgage, the bank comes looking for us, not you. It couldn’t care less what you do, because we’re the people it has a contract with. You’re no more responsible for the debt than our dog is, and your credit rating won’t be any more affected than his.
Today George Osborne effectively told Scotland it was the UK’s lodger, with no rights whatsoever over the house. He wants us to stay and keep helping him to buy the property, but we have to keep sleeping in the room with the leaky roof and no heating while he spends a fortune on absurdly expensive wallpaper and John Lewis furniture, and a ridiculous, enormous cannon in the front garden to impress the neighbours. And if we leave, he’s going to tell all our friends we’re an alcoholic paedophile.
Are you feeling the love yet, readers?
Scotland’s earning plenty of money. It’s time we moved out and got our own place.
The UK’s current debt may be legally the rUK’s but the entire world knows that in reality it is a shared obligation.
If the first action of the SNP is to welch on the debt, who on earth is going to lend it a red cent in the future?
There is form on this one. In 2007 the SNP manifesto promised that all sorts of projects would be financed by the sale of “Scottish Futures Bonds”.
How many “Scottish Futures Bonds” have been issued?
I love the last paragraph
@Lindsay,SG have no control over Financial Lever,s dont you know.
“shared obligation”?
How so?
The very document that binds Scotland to the debt has been torn up by Westminster.This isn’t a Union to them,we are Englands possession,a region,not a constituent Kingdom.
They state that Great Britain wasn’t a signatory to the Treaty of union so it cant be bound by it.Funny,Scotland isn’t a signatory to the debt.
Of course Westminster is desperate for ‘Continuing State’ status… And this is why there is all the kerfuffle at the moment. They are asking themselves, how they can get a successor state to agree to the debt.
The funny thing is, it is worse than people imagine. Scotland can argue that without a currency union, they cannot go to the markets and get the money to pay rUK. So it would be a case of ‘instalments’ … Now that’s okay for Scotland. It is a disaster for rUK. Their GDP to debt ratio just got much worse.
The Unionists are well and truly stuck between a rock and a hard place. They know that, so they will continue to try to divert independence through fear.
I like the photo of the wee ginger dug.
If Scotland is the lodger we’re not liable to meet any of England’s mortgage repayments. We can go and buy our own house with a much smaller mortgage.
As I mentioned earlier it’s all about the value of joint assets.
Brilliant.
Good point, Rev.
As any good landlord knows when planning to rent out his property, it’s mandatory to have landlorld insurance. Might I suggest the venerable and aged Treasury approach SAGA to negotiate terms and costs.
Quote “Scotland’s earning plenty of money. It’s time we moved out and got our own place.”
A-freaking-men!
There is this notion, that should Scotland be forced to ignore and thereby refuse to pay a portion of the UK debt, due to rUK Governmental beligerence, that bankers would shun iScotland. This is complete and utter hogwash. Global banks are nothing if not renowned for being truly ruthless in search of the bottom line. If you are solvent, with good collateral (oil, strong exports, high per capita GDP), banks will do business. It is a hard nosed business. They will care nothing for debt blighted rUK, sans oil and exports, weeping in the corner, screaming ‘it’s just not fair’.
Morality doesn’t come into it.
The current Scottish Government have set forth sensible proposals which would be benficial to rUK and Scotland, following independence. Under such terms, iScotland would take on a portion of the UK debt. However, if London chooses to behave like their silly chancellor suggested he would today, then iScotland can walk away.
If rUK cannot fathom that it needs to stop posturing and frothing and actually start negotiating, then it deserves the contempt of not just Scots, but the English businesses they would by their actions damage.
Scotland is moving on, rUK has been invited to play a part. If rUK choose to sulk instead, like a petulant wean, then they deserve nothing but contempt.
but…but…but we will become an international pariah. The precedent will have been set. The international debt markets will automatically assume that the very next time that Scotland is asked to take responsibility for debts which are not legally theirs they will renege on them. And the very next time that Scotland is breaking up from the UK they will renege on the UK’s debts.
It is great that Osborne keeps ignoring the fact that we are also entitled to massive asset as well if we do accept the debt.
No Rev I am not feeling any love, but I agree that the best way is to just move out, become an adult, make your own decisions and remember what your parents told you. You are on your own now, you have to work to keep a roof over your head and you should keep all debts to a minimum. No buying that sports car you want, a nice wee car will do just as well, no buying the furniture on tick either, only cash will do.
What works for people works mostly for countries. We will do fine without them.
The next coarse of action from Westminster gov.
Waterboarding, they have penty planks to ty us to.
LOL Nice puppy
On the shrillness, it is a joy to watch the shrieking over the debt issue. I fear they know perfectly well that we could walk away. All this “the foreign investors will hate you say you have cooties” is heartwarming but silly. Scotland doesn’t have debt to default on. The debt will not be defaulted on (unless George really screws up) so it will not register on the money markets.
For sure rUK could play silly buggers regarding the EU and NATO but as I don’t want to join NATO and I am lukewarm about the EU I really don’t care. In fact we could be joining the EU as rUK is leaving.
None of the countries that have become independent from the UK over the years ever paid a penny towards the UK national debt.
There can never be any doubt about who owes a debt. Those all-powerful MARKETS don’t like uncertainty.
So the debt isn’t, and can never ever be, Scotland’s.
It’s just one of those “wee things” that might figure in negotiations after the coming YES vote in September.
@Ronnie Anderson
I’d argue that Westminster has already inflicted waterboarding on its people, by inflicting a neo-con austerity programme that withdrew funds for flood barrier construction and staff.
I think this was announced now to put a cat among the pigeons in light of the YES campaign’s £2.5 million campaign starting in March. With no grass roots to talk of, A Darling, already looking for merit for getting all three Westminster parties in line, has pointed out to his masters that there would be little defence against the upcoming YES initiative.
Love the analogy of the lodger, Rev. I’m going to print it out and use it, if you don’t mind.
The whole ‘banks will shun Scotland if it refuses to take on UK debt because it’s morally wrong’ line people are punting is just nonsense.
If the banking sector was not SOLELY based on making money they woudn’t be involved in immoral activities…
link to washingtonsblog.com
@ronnie anderson
And plenty of water too.
Today is a good day – opposition to greater democracy for Scotland have reacted to what they perceive – opinion shifting to Yes, we can govern ourselves.
Telling England that Scotland won’t share UK national debt mountain really pisses them off, online anyway. And the angrier they get, the more they blame Scotland for the Blair, Brown,Darling tragicomedy. Balls gets a free pass somehow but then he is a pretty aggressive Britnat fearmonger. Its not a very pretty thing really, British nationalism.
Such is their moral rectitude, it would not surprise in the slightest if the London banks were first in the queue to lend a debt-free iScotland as much money as necessary.
With Scotland paying 9.9% of the UK treasury’s income while receiving only 9.3% of UK government expenditure means we are contributing a £4.4 billion extra payment to Westminster each year.
If we also hold on to the £6.5 billion or so that we are paying in debt interest charges to Westminster each year, then that’s already making us £11 billion per year better off. Another £1 billion saving in Defence and that’s us got a minimum of an extra £12 billion to play around with etc.
I’m actually not bothered about a currency union but if they change their mind, I might listen, as long as it’s very soon. Otherwise, I’m quite liking the thought of not having a currency union with such horrible, bullying and insulting people.
@grouse Beater, Just announced bbc news Pickles writeing to councils not to charge for sand bags, I hope those council office,s are on high ground,because ther,s no postal delivery,s in the flooded areas,one cock up after another, but as per people suffer.
According to UK Gov’s own legal advice, Scotland was extinguished in 1707. How can an extinguished country accrue debts? How can a brand new country have any debts?
It all comes down to what is “fair and equitable”. Trying to withhold the assets, which is what George Osborne is doing with the pound, is nether fair or equitable.
If you look at Scottish revenue against spending over the last 32 years Scotland would have run a surplus and in fact have paid £64 million to service a debt they did not accrue. Given that the UK wants to keep all the assets built up over 307 years I think Scotland having no debt upon independence is entirely fair and is not us walking away from our responsibilities!
link to businessforscotland.co.uk
Just a wee note to cheer everyone up… until now, I believed I was in an office full of “No’ers”.
Bit of a discussion arose in the office at Lunchtime, mainly sparked by the Osbourne charade.
I now know that it is more like a 50-50 split. The definitely Yessers and No’ers more or less are about equal, with a splattering of ‘don’t knows/unsures’.
I work in an office of mainly well paid individuals, so I get the feeling that Osbourne’s/BBC’s fearbomb may not have quite the desired effect he would have hoped for.
@chris
Maybe they just regard the debt as a ‘negative asset’.
Cute dog Rev.
Not only are we nationalist pariahs, but we’ve completely lost the plot over the currency of the pound, according to Alan Cochrane of the Telegraph. He goes on to say nationalists are also stupidly adherent and resort to foot stamping childishness.
link to telegraph.co.uk
SUPERB article. Made me laugh that’s for sure
Have to say that I prefer Robin MaAlpine’s take on the debt/asset issue.
link to bellacaledonia.org.uk
Scotland’s been paying its way for years, sending Westminster more money than it receives back. Hell one of our First Ministers even sent some surplus money back down to Westminster because he couldn’t think of anything to spend it on in Scotland. We may not have an actual credit rating, but we’ve sure as hell got a de facto one.
I Can’t see any country not willing to finance iScotland on that basis.
You’ve missed out a few lines:
UK Govt: In that case, you can go whistle for our support into the EU and NATO
SCOTTISH Govt: See that Trident? Out! Tomorrow!
UK Govt: See your 2016 deadline? Think that’s going to happen? Go on – declare UDI – we dare you
(But after a nice soothing cup of tea and a pause for reflection, maybe both sides will come to the conclusion there’s a better solution) (maybe)
Oh look a puppy. Sorry, I’m easily distracted.
Not really getting it are you Lindsay?
Lindsay, there is also an obligation in the Edinburgh agreement to work together, but then Westminster have form for not playing by the rules.
I’m a bit confused. IF Quantitative Easing involves making more money (pounds Sterling)available. How does wiping all the money in Scotland from the budget books overnight, when we vote YES, not do anything but have a huge negative impact on the rUK economy?
Osborne, Alexander & Balls,
Found the writing was up on the walls.
Indyref polls nosediving,
Yes Scotland is thriving,
So a fearbomb’s let out of the stalls.
My preferred option has always been Sterling without agreement (initially) and no debt, as worked for Ireland, Australia, New Zealand, South Africa etc, etc ad nauseam.
There’s a wee prize over on my blog for the best Osborne limerick starting or using the line “Ireland made use of the Punt …”
Entries on this comments thread for those who don’t have a Google comment account are also welcome.
link to logicsrock.blogspot.co.uk
Lindsay if you believe the entire world knows that the debts are a shared obligation ,they will also know the £Sterling is a shared currency.
We either share assets and liabilities ,or we do not.
Osborne said he ,nor any Rump Uk Chancellor could sell a Currency Union to the people of England.
I would suggest no Scottish chancellor could sell to the Scots that we would pay a foreign country’s debt.
Unionists so disliking foreigners I am sure you will agree.
It’s hilarious hearing numpties talk as if the international bond and money markets are conducted on a “moral” basis. They need to get out into the real world more.
When someone holds a government bond (indeed any bond) you simply need to look at the issuer on the certificate to see who it can only be redeemed with.
This is the way it works globally.
@Rev. Stuart
The UK has ‘spent more than it earned’ for most of our lifetimes, without problem. That’s what countries with external deficits do.
If you were going to lend someone money, would you choose the country that ‘spends more than it earns’ and has given up control of its currency, thus losing the ability to fund that external deficit with a self-financed government deficit?
Maybe not, and if you did you’d charge them a small fortune for it.
Which is why the rUK government would be insane to enter a currency union. It didn’t enter the Euro and It cannot enter a union with iScotland. The UK did enter the ERM, briefly, and it was a disaster.
Countries with external deficits have to control the currency they use.
The SG tried to do the decent thing by offering to pay on a pro rata basis what there was in debt, obviously in return for a pro rata basis of the assets. Seemed fair to me and the honourable thing to do.
Now the WM lot are showing exactly how dishonourable they are and totally ignoring the sentiments of the Edinburgh agreement.
“to welch on the debt”?
Really?
What Westminster dont get about Independant Scotland , its all change, a fresh start, in a new Country, they talk in terms of a continuation of Westminster Politics, & subserviance.
All change 18th Sept 2014. The whole World will welcome a Independent Scotland.
This is Darling’s comments from the Guardian. Is there anything he says here that has any basis in reality:
“It is now clear beyond any doubt – the only way to keep the Pound is for Scotland to remain in the UK. People need to know that when they go into a polling station in September they will be voting either to keep the Pound or ditch the Pound. A vote to leave the UK is a vote to lose the Pound.
Alex Salmond has no plan for currency in an independent Scotland. The SNP wanted to turn the pound into the Eurozone but understandably the rest of the UK have said they don’t think this is a good idea. The SNP Government have ruled out using the pound without agreement in the way Panama uses the dollar. So what money will Scotland use?
What we need now from the SNP isn’t so much a Plan B but a Plan A. Now that using the Pound is off the table, would we be rushing to join the Euro or set up an unproven separate currency?
Alex Salmond should stop making reckless threats about defaulting on debt that would put jobs and businesses in Scotland at risk. People know that if you don’t pay your debts your credit rating is shot and that means everything is more expensive.”
Isn’t it fun seeing Danny Alexander ricochet from one interview to another like a hairy ginger pinball?
Here’s the Express Jock bashing by lambasting Nicola Sturgeon for playing the victim, of Westminster bullying, Kerry Gill of the Express adds “Poor poor wee Scotland” referring to Winnie Ewing when she stood up to Westminster, and its bully tactics.
link to express.co.uk
indsay says:
13 February, 2014 at 2:13 pm
The UK’s current debt may be legally the rUK’s but the entire world knows that in reality it is a shared obligation.
I think Lindsay will find most lawyers believe legality and reality are indistinguishable.
We signed for nothing, we borrowed nothing we owe nobody nothing where’s the default?
We being decent honourable people were quite prepared to help our neighbour out of a hole of its own making by taking a share of his dept and he bites us in the arse for our trouble. If you want help then you will have to stop being so aggressive and arrogant and bringing your two bully boys with you trying to frighten us.
When the debt collectors are due at your house next, I’m sure you will give us a call to see if you have become any more reasonable. Beggars can’t be choosers ozzy leave you dogs at the door please
Its would appear that Westminster are our masters are, or believe they are.
There was never ever a real Union, we are simply part of North England.
I was listening to the discussion on the Jeremy Vine show on radio 2 about Osbourne’s meltdown in the car, and the phone in part elicited a woman from Helensbourgh for whom “hell would freeze over before I’ll vote for independence” who was clearly not swayed by Osborne’s calamitous comments and had obviously always between a committed no’er,
then followed by a succession of previous no voters who are so angry with Westminster’s arrogance that they have decided to vote yes, one was a confirmed no voter who in his job a a delivery driver has being getting a growing response from people who are now yes voters who were previously no and his take is this will simply add to the avalanche towards yes, of which he is one.
I don’t think Osborne has got a handle on the “love bombing” part of the debate yet, still it could be worse as he definately does not have a handle on the “NO assets, NO debts” part of the debate either.
Honestly what do the unionists actually think Scotland was going to do with this announcement break down and cry mercy, no fucking chance. We will do what ever we need to do to ensure Scotland has the best currency option it requires to function as a fair and honourable independent country.
George Osborne, you can stick your sterling up your earse and your deficit with it, and that is Scotland’s version of “love bombing”.
So, to go slightly o/t but this will tickle anyone who has somehow not heard…Sturgeon vs “debater of the year” Lamont on the next Scotland Tonight debate…I’m giddy with excitement!
#prayforjohann will be the hashtag I use on twitter
@ muttley 79, A Salmond doesent need to do anything, there making the moves, the credit rateing you refer to, who,s credit rateing UKs, its certainly not Scotland,s, the World Financial Market,s will respond to this nonsence by next week.
Popcorn time tonight! On Scotland Tonight STV Nicola Sturgeon v Johann Lamont
So we will see Lamont unscripted and in full flow and another scalp for Nicola !
Popcorn time tonight! On Scotland Tonight STV Nicola Sturgeon v Johann Lamont
So we will see Lamont unscripted and in full flow and another scalp for Nicola !
Its their Bank of England, their £, their policies that got them into debt and their debt.
@ronnie anderson
The quotes were from Darling…
All this Unionist talk of “defaulting” and “reneging” on debt we do not owe has got me wondering what UK assets Scotland would actually want? Fuckwit Brown sold the gold off and created his own “Brown’s Bottom” of the market to do it in, so I suppose there is our share of whatever foreign currency reserves and ‘debt assets’are left, then there’s any UK Government-owned real estate within Scotland.
Would we really be fussed about defence assets? Ask any soldier and most MODUK kit is crap. I suppose a few ships and planes may come in handy, but obviously no SSBNs or white-elephant aircraftless carriers.
Scotland would start in the black with a handsome surplus without having to service a share of the UK’s crippling debt mountain, which will become eye-wateringly, ball-bustingly crippling for rUK with an obscene Debt:GDP ratio without Scotland.
Scotland will not be in a position of default. But look how quickly the money markets have restarted lending to countries which have actually defaulted in the past.
The ‘nae borrowing for Scotland’ bit is the absolute weakest point of today’s scare stories.
Moody,s placed RBS on review for Downgrade, that,s the start of the World market reaction, shooting themselves in the foot, well done Mr Osbourne.
Why is my post come up twice?
Iceland, Iceland, Iceland.
link to businessinsider.com
link to youtu.be
Danny Alexander says “This isn’t a bluff,or bullying its a statement of fact. The SNP’s claims that an independent Scotland, could or should be able to share the pound, are just fiction.
I was going to say what a cheeky statement from Alexander, but the comments are more cheekier it seems Daily Mail comment writers don’t particularly like Scots, Oh dear.
link to dailymail.co.uk
According to BT camp, Scotland would be a new state so would be entirely on its own to …
negotiate back in to Euro Zone & adopt Euro
erect border posts.
build its own embassies.
negotiate back into NATO.
create a defense force from scratch.
BUT
pay down debts created by Britain.
I don’t think so.
I seem to recall Brazil defaulted in the eighties,
link to en.wikipedia.org
look at them now!
Watch CNBC money markets,
Barclay,s
Rolls Royce
Lloyds Bkn group
vodaphone Uk
Legal n Gen ect ect
more & more being added all the time.
@Andy-B thanks you have strong stomach. And whatever the swivel loony that wrote that gets paid, its way too much. He/she ends DailyBetterTogetherExpress ranting with, Scottish democracy is
“It is utter rubbish, but the SNP and its followers within Yes Scotland see divisiveness as the key to scraping victory in the referendum. It is up to you and me to ensure that their cynical misrepresentations and downright lies are exposed for what they are.”
The Rev was asking yesterday about the timing of the apparent intervention George Osborne would apparently make today.
As expected – today – it was all puff and bluff –
Which bring us back to the motive – this was/ still is a massive winner takes all bluff 7 months out. Why?
One reason for BT/BBC / and the Treasury to go for such a high risk move is their need/ fear/ compulsion to STOP the YES momentum in the polls. Plus the Yes addvertising campaign?
So are we missing something by focusing too much discussion on the currency/ bluff and myth??
Consider this….
The BBC Blue Peter Political Poll Strategy – called so because
(a) the BBC will champion it and
(b) the poll results are ‘ones we prepared earlier’.
1. Wednesday – The three main Westminster parties claim that whoever forms the next UK government – none will enter a currency union with in an independent Scotland. A big loud myth that by Thursday is seen as an inflated puff piece. But..
2. Thursday/ Friday – 3 polls that are already commissioned – they ask the prescriptive question planned. A question directly related to the myth. If myth happens will you vote yes or no?
3. Following week Publish results – for MSM weekend spin – discussion
4. Repeat – 1, 2, 3 in four weeks time with some other myth
5. Repeat – 1, 2, 3 every four weeks thereafter
So leaving nothing to chance
(a) PRE Select Definitive Date for Fear Myth
(b) PRE Select Definitive Poll Question
(c) PRE commissioned poll for launch day.
(d) 7 days from poll publish / and spin PRE arranged result
Given Yes Scotlands forthcoming advetising campaign
Are we witnessing the begining of the :-
The BBC’s Blue Peter Political Poll Strategy..
Where an outrageous myth on a Wednesday becomes –
and ‘here’s one poll we prepared earlier’.
If in doubt… remember
Never, ever, underestimate the high deviousness and low cunning of the British state. Or the BBC.
CNBC channel 613, Bea Systems now added
Rev time for you to set up a fund for buying gold/silver to support an ISG.
I think the unionists are having trouble in accepting that we will not lie down and die on this issue after they fired what they thought was their big cannon.
They have forgotten the First Rule of Warfare: No battle plan survives contact with the enemy.
John Mackay will host an independence debate tomorrow in Paisley, if anyone’s interested. The event is to be held in the Abercorn building at West College Scotland, Ivan MacKee, will bat for the independence movement, and Phil Anderton will respond for the no camp, times are from 12.00 noon to 2pm, all welcome.
Does anyone else think that Salmond’s stance is similar to his second question manoeuvre? There he pretended to support a second question, because he knew his opponents would reject it, as they hate him and the SNP. Hence, voters in Scotland saw the unionists publically reject a more powers option.
With the currency union: is it possible Salmond did not actually support it, but knew it would be rejected by the British state and establishment? Again, the Scottish electorate would see the nature of Westminster rule over, and towards Scotland, which is basically extreme arrogance and spite. He would know that the MSM in Scotland and the UK would gleefully take the side of the British government. Therefore, it would make the SG appear moderate, conciliatory, while making the UK government/MSM look extremely bitter and spiteful.
link to archive.is This one’s very funny too but they can’t even write properrrrrly. Grammar no no “, and” plus what the feck’s a “voyage head” at the end?
“On the other hand, the poll is a warning that those of us who cherish being citizens of the United Kingdom must not give in to complacency, and can never afford to become smug about our lead in the polls. The voyage head is full of unforeseen hazards.”
Plan A survived Osborne’s fear-bomb.
Go tell the world folks. Scotland will not be swayed by fear.
Thank you Gideon. We Scots love being told what to do.
Turning the debate into a ‘them and us’ is wonderful.
Thank you, thank you.
Accepting that we are responsible for part of the 1.2Tdebt.We have to deduct 375B QE and 160B gold reserves owned by the BOE leaving 665B owed by the UK.This leaves about 60B owed by Scotland.this will be further reduced by other ASSETTS jointly owned.It would be interesting to know just how much we would actually owe on independence.
@ Lindsay,
Is that you offering to pay my credit card bill? Sounds awfully like it from here? Shared obligation – really with with whom?
Now that is a handsome wee pup.
Love the take on negotiations Rev.
First class.
This’ continually having to log in and post something, just to get to see the latest comments is getting quite frustrating.
Lindsay says:
‘The UK’s current debt may be legally the rUK’s but the entire world knows that in reality it is a shared obligation.’
– Really ? Evidence please. Personally I think business minded markets and corporations will look at Scotland’s favourable balance sheet and huge energy reserves and say ‘ lovely, I’ll have a piece of that action. ‘
Business, markets and financial institutions couldn’t care less about politics, they care about the return.
‘If the first action of the SNP is to welch on the debt’
– this is not the first action, it is the first re-action – to Osbourne and Westminster saying that they are not prepared to share the assets. Sterling is an asset shared and owned by all in the UK, if they are not prepared to share the assets, why should we share the debt ?
Simple question, look forward to your answer.
Of course, words like ‘renege and default’ are complete crap anyway, because as pointed out you cannot be held liable for debt you have not incurred or accepted any responsibility for, so there is no way for Scotland to default on ANYTHING if we don’t accept we should take it on.
Lindsay; similar to renege and default, welch implies responsibility. Which, on the off chance you weren’t paying attention, the UK Treasury has accepted because, regardless of what the ‘whole world’ knows, it’s their debt. Not shared, theirs. And the Scottish Government is perfectly well entitled, since it is not their liability, to tell the UK Government just exactly where to get off.
i was in pub with 2 Dont Knows on Saturday.
Conversation went like this:
DK1: “Right, How will I be better off if we go Independent?”
Me: “That isnt the question to ask”
DK2: “How no?”
Me: “See when you moved out your maws hoose, where you better off having all the responsibility and having to pay all your own bills?”
DK1: “Naw”
Me: “Did you mind?”
DK2: “Naw, course no”
DK1 : “Hmmm, never thought of it like that.”
Alex Massie of the Spectator magazine comparing George Osborne to Lyndon B Johnson, by reminding us that its Osborne who wields power by carrying the big political stick.
link to blogs.spectator.co.uk
Can we not just pay our TV Licence fee to Wings over Scotland? Astute political analysis, a healthily involved audience, and pictures of cute animals, no Call Kaye. What’s not to like?
FTSE 30.32 down
@ Heedtracker 3.53
Voyage head explanation.
A head is what a toilet is called on board ship
A voyage is travel by water or air to someplace distant
So, we have a toilet, water, air and travel. Work out the rest yourself. Just saying like
Not everyone is wildly enthused by George’s errant mouthings.
link to cityam.com
Nicola vs Johann isnt tonight. Its 25th February.
You would think Scottish Labour would have learned their lesson.
How many times will Johann play the “Well, We would look to debate that” card when asked to confirm alternatives. Paddy Power will be taking bets on number of times she says SNP over Labour.
All the while, Nicola’s stride towards Prime Minister of Scotland continues with pride and ease.
#HelpMeRona2
Peter A Bell @ 3.01
“Have to say that I prefer Robin MaAlpine’s take on the debt/asset issue”.
Indeed Peter, a point well made about the morality issue and it would be nice to repay in the manner suggested. However, I’m sure the torn faces in Westminster would cut the budget of the recipients in the manner they did with the EU funding for Scotland. It still appeals to my tail tweaking instincts however!
roddy Macdonald,
I fancy negotiating for a load of the loot in the British Museum (Elgin marble’s anyone?) and then returning it all, with due ceremony, to the nations that rightfully own it.
A clear statement to the world that Scotland is not the same as rUK.
Ps. envelope With badge arrived safely, thanks, a lot.
Sturgeon versus Lamont? Jeezus. Will there even be programme after the ad break in the middle? And will the jaiket turn up?
It is now no longer a case of vote for the Union because we are better together. It is now a case of vote how we tell you to or we’ll hurt you and your country.
@ mosstrooper heedtracker, watch oot fur they Icebergs during your voyage,
Osbourne
Darling
Murry
Alexander
Balls up
any good at playing dodge balls, lol
@Edward re Sturgeon v Lamont
Loved this on Twitter:
@Ray_McRobbie : Nicola Sturgeon’s @STV debate with Johann Lamont will be the bloodiest thing on the telly since that Game of Thrones bit when everyone died.
Just consider everything that has happened within just a few weeks, UK conceding ALL the debt is thier responsibility, the the speech from mount Olympus, about ‘Love’, then we had the Bank Governor, and now we have this.
Honestly, you can smell the fear coming out of Westminster. They are starting to sound quite hysterical.
We’re not even part of North england since that stops somewhere near Newcastle.
Conclusion – we are a non-entity – aye right!
BTW re ramping up tension – I think Derek Bateman said something similar in that they, British establishment, can’t help themselves as they see us as an asset to be used, abused and then disgarded.
I am not in anyway comparing us to NI, because of the violence that the poor population had to endure, but they could have handled that much better – ie why send in the paras to ‘police’ a civil rights march?
Muttley the man is a master politician.
He never lets us down and you’re more than probably right that he’s set another bear trap they’ve inserted their collective foot into.
Lindsay
The whole world is unlikely to know anything of it and won’t give a tinker’s toss even if it did.
That’s not the way international finance works.
If rUK decides to claim to be the sole successor state and refuses to share a currency it gets all the debt.
It can’t have it both ways
cearc – That’s a lovely idea and one I am very, very much behind.
Is it not time to hold these clowns to their word, after all no means no and if no pound means no Osborne or Balls that’s fine by me and as for assets… if its in your country you get to keep it….any body want to buy a submarine ?
Popcorn time tonight! On Scotland Tonight STV Nicola Sturgeon v Johann Lamont
Nicola has been doing television interviews all day and she’s been in London, I hope she won’t be too jaded. Should still be more than a match for a ‘fresh’ Lamont.
It’s been another of those …
“I love the smell of NO-plan in the morning.”
… days.
This is why they say the Scottish regements in the British army arent Scottish,they are worth £100s of millions of pounds.A regement is set up in a way to take over control in case of an emergancey.How much silverware,art,furnature,and supplys they have is unbelevable,just another way to rob our heratige.
Here’s how other EU nations saw George Osborne’s speech.
France’s Le Monde said “London threatens Scotland.
Germany’s Frankfurter Allgemeine said “Threats over the pound by English politicians.
Russian news wire Lenta said “Britain would ban Scots from pound.
Further a field.
Venezuela’s El Universal said “The UK was threatening Scotland.
Catalonian newspaper Vilaweb said “London threatens Scotland.
So its by no means a stretch of the imagination to say, without any hesitation that, Osborne and Westminster HAS threatened Scotland.
source.
link to heraldscotland.com
@James123
Just as well the debate on the 25th and not tonight then. Sturgeon is down in London giving a speech at 5pm.
I’m with ‘Lindsay on this. I just can’t get over the simplistic idiocy of this idea that leaving behind all the debt is somehow a simple option with no negative consequences.
For a start, the debt is incurred in part, by Scotland. We’re in the UK, the debt has been raised on our behalf, and so we will be expected to pay a share, unless this is negotiated away in independence discussions. This is the expectation of international agreements and practices, but is also a fundamental part of the negotiation process.
Many people here confuse the currency with an asset, arguing that the currency must therefore be shared. It isn’t – it’s a system. If 5m people want to leave the UK, they want to leave the system. By all means split assets and liabilities fairly, but if you want to leave the UK, you leave the UK. Deal with it.
As far as the practical outcome of not sharing the debt goes, Scotland would be outside the UK, and outside the EU. Uk has a veto on all new members to the EU. Scotland would not be in the EU. It would not be in EFTA. It would be in shit, and the UK would not be able to veto that.
It is such a daft, daft idea to think that there are any circumstances that Scotland could somehow be in a good position if it refused to accept a fair share of the debt.
As has been doing the rounds on twitter today – “The SNP reaction to Currency Union announcement is effectively ‘how dare you treat us as if we were a totally different country’.”
Hmmm.
@Robert Louis
They reek of it RL (fear that is). Just as I replied to you on the other thread, they’ve burnt the union themselves today and played one of their trump cards to boot. They’re well aware of the polling trend and they’re well aware that BT is pretty much in full disarray with only the media holding it together.
If the Scots electorate recognise this move for what it is (naked threat) and respond the way we hope, its game over for Dave and George.
muttley79 – I would definitely NOT play poker with Alex Salmond
Alistair Darling’s groundless mutterings about a vote to save the pound sound like William Hague’s failed election campaign.
People will see through this garbage.
muttley79 & James123
My fault for not reading further, eyes just mesmerised with the aspect of Sturgeon v Lamont (embarrassed face thing)
@muttley79
Note to self, check TV listings next time. BTW I gave you some BE info on the other page, but maybe you should just ignore what I say
Les Wilson says:
13 February, 2014 at 3:51 pm
Another issue we do not look at often enough, is the HUGE UK debt. What if we are in a currency Union, and there is a big “Soros” type run on Sterling, ending up with UK default, that means we are involved in that default and would equally suffer for it.
I think default IS a real issue, money will be worth less across the board. It is US who are taking the risk and WE did not incur the debt. We need to be careful with Sterling and allow for anything happening. Please do not think a default is impossible, UK has never had so much debt, so history has no place in the future.
The closer the ties, the closer the problem and it is a very dangerous one for Scotland.
So thinking this could happen at some point, as the debt is increasing by large amounts, why should we touch any currency union, when we can have our own and run it in parity, with far less risk?? Bonus, no debt on us. It was their choice and they chose it.
@muttley79
Yes, I think there’s a very good chance that this is what’s been happening. I definitely hope this is what’s been happening. End up with a Scottish currency, and let Westminster boost the Yes vote in the process.
Roddy Macdonald
There is not much defence wise apart from the military bases in Scotland that we would want, The Naval ships of the size we would require are designed to defend Aircraft Carriers, we don’t need ships that are very expensive to operate/maintain just for looking after a few oil rigs and fishing grounds.
The Aircraft the UK use are not only very expensive to purchase 2.5 Billion pounds for 14 aircraft!!! they are also the most expensive in the world to operate. The F35b operating cost is estimated at between 21,000 and 32,000 usd.per hour and the Typhoon costs approx 18000 per hour to operate.
As an example of what is available, The Saab Grippen can be leased and has therefore no expensive capital costs to pay upfront,costs a miserly usd 4,700 per hour to operate.
Therefore we can lease Grippens and fly them for less than the operating costs of the Typhooon.
Im sure we could come to some agreement with friendly foreign Governments to lease some destroyers until the new ones built to our requirements are built on the Clyde.
As for the Army, We don’t need tanks, the British Armies vehicles are not fit for purpose, obviously we will allow any personnel that want to to transfer to the SDA, Serving soldiers I have spoken too are keen on a move to the SDA.
So as for military assets nothing much we would want to take on from the UK. They really don’t have much else either apart from the 31 billion or so which is our share of the assets of the BOE, and they have told us we cant get that. So basically walk away, and build our defence forces, based on what’s in our interest.
Simples
@Alec
The rUK cannot have it both ways. If they want to continue to reject a currency union, then Scotland will pay no debt. I am not sure why you find this so hard to grasp. In fact I find it absolutely bewildering why unionists keep on saying this.
Well done,Stu.We expect to get a fair share of the assets and pay for a fair share of the debt.Westminster says we’ll get nothing but will have to take on a share of the debt.That just doesn’t make sense to any fair minded person.
@Alec
You are starting to irritate me.
Some of what you say may be worthwhile discussing, but you posted the same sort of comment yesterday regarding debt and the Rev at that time asked you, and I’m paraphrasing from memory rather than looking back, ‘Name one country which has become independent from the UK which has had to share the debt.’
In the absence of an answer your contention on debt would seem to be without foundation.
Please deal with this then your other points can be considered as worthy of discussion. Until then you risk being seen simply as a unionist troll.
I also love the selective interpretations on here of some of the links.
Rev C provides the link the Nick MacPherson’s report, and says that – “So it was pleasing when Sir Nicholas, strikingly but sensibly, refused point-blank to endorse the position of those in the No campaign who scream that lenders would regard Scotland as a nation in default. “An extensive wrangle about [Scotland’s] share of the debt would increase uncertainty and hence its funding costs”, was as far as he would commit himself to comment on the matter.”
Strictly in terms of Scotland as a defaulter nation, that is indeed what Sir Nick says.
However, he then goes on immediately to say – “Secondly, the debt is one of a number of issues which would have to be settled post independence, where the new Scottish state would require the cooperation of the international community including the continuing UK.”
This is civil service speak for ‘if you think we’ll let you join the EU if you don’t share the debt, you can f@ck off”.
Interestingly, the Rev C seems to claim that Sir Nick is strikingly sensible when he delivers that one sentence amongst three pages of text. Is he also strikingly sensible for the remainder of the document, which is a highly effective demolition of the idea of a currency union as proposed?
You can’t pick and choose the credibility of a witness.
They are either credible, or no.
I’m still left wondering why of earth the SNP didn’t go into this with the simple policy of a Scottish pound, set at parity, with no visible change to people’s day to day trade and a likelihood that informal cross border arrangements would probably emerge, without the need to have to go through the difficulties of a formal currency union. Ireland managed like this for a decent time, and it would have given Scotland time to develop long term options.
Alec – You could be correct, however, in the minds of the undecideds it plays well……a more realistic approach is Trident and the fact we already have a share in the BoE.
Now that there is some realisation, none of the Westminster parties want to be in power dealing with the aftermath of a YES vote. Scotland will get what it wants and ‘whatever party in office’ will be seen as a failure for ‘allowing’ Scotland to take its rightful assets. They are terrified of negotiation and the negative press that will shadow them in the rabid right-wing MSM.
If Scotland votes YES then I think UKIP will do very well in England at the GE2015.
I’ve got a certificate from the former Soviet Union which says I am owed several thousand roubles.
I’m going to try and get my money back from Estonia. They have a moral obligation to repay part of my money having been part of this union.
@Muttley79 – “The rUK cannot have it both ways. If they want to continue to reject a currency union, then Scotland will pay no debt. I am not sure why you find this so hard to grasp. In fact I find it absolutely bewildering why unionists keep on saying this.”
There is no connection between a currency system and debt. One is a mechanism, the other is a physical amount, like the assets, which can be shared proportionately. I find it absolutely bewildering why unionists have to keep on saying this.
And lets just get one thing straight – we have a currency union. You are rejecting it, not the unionists.
@Brotyboy – “You are starting to irritate me.”
Only just starting – now there’s a thing.
I answered the Rev’s question on countries leaving the UK with no debt shortly after he posted it. In fact, I recall his question was framed in the context of RoI only, but I’ll give a fuller answer now for your benefit.
Under normally accepted international norms, colonies would not be expected to share the sovereign states debt on separation. To my knowledge, this has been the case for all former British colonies.
RoI was deemed liable for it’s share of debts when in gained independence in 1922. During the negotiations, it’s representatives agreed to recognise the Northern Ireland border, in exchange for not having any liability for UK debts. It had to share the debts, but gave away something deemed to be of commensurate value to the UK in lieu of it’s obligations.
As would Scotland, if it chooses to refuse any debt.
Alec, you fail to recognise that Sterling is just as much Scotland’s as it is anyone else’s. And as for what Osborne said (or didn’t), Sterling is an international tradable currency, and we can continue to use it if we like, currency union or not.
If Sterling isn’t an asset, why is Osborne treating it as such? Sterling includes the BoE surely? The BoE is also ours, since we’ve been paying for it for three hundred years. They also say we would have no embassies, despite our having paid for their upkeep. Another asset.
Be quite clear about the legal situation. If Scotland is a ‘newly independent state’, under the terms of the Vienna Convention we have no debts and no obligations to pay the debts of the rUK if it wants (as it desperately does) to be a ‘continuation state’.
“There is no connection between a currency system and debt.”
Yes there is when the debt is in Sterling.
@Alec
You sound like one of those British nationalists who only look at the side of the British government.
You cannot treat sterling denominated sovereign debt differently to a Sterling bank note.
The holder of each has rights to an amount of Sterling on presentation / redemption.
You cannot say one is a “liability” and one is an “institution”!!
I truly fail to understand any unionist that can actually say ,let alone believe that Scotland should accept no assets ,and a share of the liabilities.
Are they so blinded,fingers in the ears?
@ Brotyboy, weil said that man,re that Alec post, nail hammer heid.
Pa Broon, speaking in commons just now,Syrian Debate, ticket,s at bargain prices, less than G Galloway,s
As a good old Republican I hope they see the Royal Family as an institution.
@DaveyM – “Be quite clear about the legal situation. If Scotland is a ‘newly independent state’, under the terms of the Vienna Convention we have no debts and no obligations to pay the debts of the rUK if it wants (as it desperately does) to be a ‘continuation state’.”
Sorry, but that’s completely incorrect. The Vienna Conventions state very clearly that assets and debts will be the subject of negotiation, and if no agreement can be reached the assumption is a proportionate split. Not that we’re signed up to convention though, but nonetheless, that’s a bit of foot shooting there to bring that up.
You’re correct though – sterling is as much Scotland’s as the UK’s, but you want to leave the UK. You’re rejecting the currency union.
“””Lindsay says:
The UK’s current debt may be legally the rUK’s but the entire world knows that in reality it is a shared obligation.”””
The entire world couldn’t care less – couldn’t give a fig.
Alec,
Deary me, I thought you had given up on this pariah/renege line after you got your heid in your hands to play with yesterday.
Here’s how it works. The UK government and any future rUK government is legally and financially responsible for the debt. No ifs buts or maybes. Have you got that.
Right, next. A Scottish Government cannot be responsible (even if it wanted to be) for this debt. What it can do is offer to help service a portion of the debt – if the rUK government plays nice. The portion of the debt will be negotiated in the context of all the other assets and liabilities that are up for discussion.
OK, you got that? If the rUK government play silly buggers (as they already appear to be doing) then we can choose not to help rUK dig themselves out of the hole.
But what about the precedent that we are setting, I hear your scream? We will be an international pariah in the eyes of the international money markets. They will rightly come to the conclusion that the NEXT TIME Scotland declares independence from the UK and does not pay for debts for which it is not liable then they might do the same again.
However, when it goes to the markets as an independent, asset rich, wealthy, solvent country with no debt it will not be a problem. AND EVEN IF the debt is marginally more expensive the difference will still be a damn sight cheaper than £150bn.
Do the math son.
Just heard this on BBC Radio Scotland Newsdrive in regard to George Osbourne’s currency speech. “..soon we’ll have some views from people in Dundee, and later we will get the opinions of the most important people, THE JOURNALISTS”. Is any further proof needed to illustrate the utter disdain in which they hold the Scottish public???????
For a start, the debt is incurred in part, by Scotland. We’re in the UK, the debt has been raised on our behalf, and so we will be expected to pay a share, unless this is negotiated away in independence discussions. This is the expectation of international agreements and practices, but is also a fundamental part of the negotiation process.
This is a commercial situation or nation to nation, its not you and your mate agreeing whats right and shaking on it. Bottom line is that rUK by taking position as continuity state is 100% responsible for UK debt. Legally Scotland owes no one anything. In footballing terms we are New Rangers. Still Rangers but we owe no one anything.
Even if Scotland accepts a share of the debt, the actual debt obligation itself cannot be transferred as bond liabilities cannot be transferred to another party, as that would technically be a default.
There would need to an agreement made between rUK and iScotland that there is money owed and when and how it was repaid but just between the two countries. Similar to WW1 or 2 loans from US to UK. Could be done with Bonds but probably in shape of loan.
Many people here confuse the currency with an asset, arguing that the currency must therefore be shared. It isn’t – it’s a system. If 5m people want to leave the UK, they want to leave the system. By all means split assets and liabilities fairly, but if you want to leave the UK, you leave the UK. Deal with it.
Sorry thats bullshit and purely semantics. Even on a legal basis the Bank of England exists as a company. In that case iScotland should simply challenge rUK assertion that its continuity state and argue it from there. You do know that continuity status requires all parties to agree…..Just ask the Russians.
As far as the practical outcome of not sharing the debt goes, Scotland would be outside the UK, and outside the EU. Uk has a veto on all new members to the EU. Scotland would not be in the EU. It would not be in EFTA. It would be in shit, and the UK would not be able to veto that.
Lets be clear, we won’t be outside the EU as we’re inside it today. No one in Brussels will launch 5M EU citizens out. If you believe that you need to lay off the green. A pragmatic compromise will be reached in the same way they approached East Germany.
According to UK government we’ll ALL still be able to keep UK citizenship , so on a very basic level according to our passports we’re still EU citizens thru dual nationality. Imagine all the countries and companies in EU at once thinking shit we need to alter all the agreements and trade agreements with North Britain. This is a non issue and UK won’t get to block it. Its not like Westminster has many allies in EU. EU is run by Civil Servants not politicians. They nearly broke the EU to keep the Greeks in. This is a club you will NEVER get to leave without a huge fight. Ask the Greenlanders. The thought that we’d just fall out due to a National level split is fantasy stuff. There are soft areas in SNP plans but EU is not one.
It is such a daft, daft idea to think that there are any circumstances that Scotland could somehow be in a good position if it refused to accept a fair share of the debt.
+ive
Immediate surplus.
No debt whatsoever, so clean slate.
No big haggling over assets
150BN buys you quite a lot and even then we’re only in the same state as rUK is ‘offering’.
-ive
No share of rUK assets
Wrath of rUK consumers
rUK will suffer with immediate 4BN additional deficit and
8% jump in Debt/GDP. Potential rate increases that will be blamed on Scotland. UK is our biggest export market. Ignore this at our peril.
The same organisation promises to pay the bearer of a UK bond (or gilt) as the holder of a £5.00 bank note.
That’s because they are a part of the same currency system.
One part cannot be treated differently from the other if you are to have any credibility.
For those who feel honour bound to accept the debt!
Do you want an offset for 2 aircraft carriers or just pay for them and the rUK keeps them?
You are happy taking the debt for QE and let rUK keep all the bonds.
You feel confortable taking the debt for Trident and all the design work for it’s replacement but the rUK keeps them.
The rUK keeps the entire established Military / Embassy / Civil service infrastructure but we pay for it.
The millions already spent on HS rail is fairly our burden?.
Do you consider it fair that we pay the up front cost of the nuclear power station project and they keep it.
Those sums spent on the Falklands and Gibratar. You agree that these are rUK assets post Independence but we pay for the spend to date.
The crown estate has sold rights for years to come and that income has already gone to Westminster. Are you happy that our coast and offshore will be exploited for years to come but the rUK has the income pre-paid.
All of this before we go back to the M25 / Channel tunnel rail links / etc.
The assets of Scotland spent in England for 40 years.
The discussion has to be about assets and liabilities…otherwise !!!
Further to Macart’s link (and apologies if it has already been posted) here is another link from the same publication…
link to cityam.com
Any thoughts on this, Alec?
Could anyone point to any evidence in the currency and gilt markets that not having a currency union will be a “disaster for the £”?
I don’t see any.
Also, where is Salmond?
Has something happened?
@ Alec , go on to the next story The Angel,s Share,& tell me, we owe anything to the UK gov, Scott Minto demonstrates how were hoodwinked by UK gov.
Negotiations is about assets and debt, that’s what will happen. Scotland will leave with some assets and some debt, the rest is puff. RUK can’t afford Scotland ending up being a pariah or a basket case as it would have a disastrous effect on the rUK economy too. Think of Ireland and why Osborne handed them £10billion off the bat, they couldn’t afford Ireland to go under.
link to standard.co.uk
A Sterling Zone is the best way forward in the short-term, everyone including the British Government/Treasury knows this, the recent hyperbole is to try and influence the outcome of the Referendum, nothing more. After a YES vote, come 2016 Scotland will then be in a position to decide how best to continue whether it is money, EU, NATO et al, that’s what independence is about, empowering yourself with choices and decisions.
“The UK’s current debt may be legally the rUK’s but the entire world knows that in reality it is a shared obligation.”
Understand , its not personal its business. People make money buying and selling sovereign debt. They will measure risk using their own models. Not one you made up with your mates down the pub. The commercial world isn’t filled with lawyers for no reason. Its not whats fair or right. Its what is written down or what the judge says when you can’t agree what is written down.
Scotland has no debt, technically in the world of sovereign debt we don’t exist, so we can’t owe anyone anything.
@ cearc 16:09
Broken families in lands we’ve harried will curse Scotland the Brave nae mair, mae mair.
Mind you lets not forget Scotland’s historic artefacts at the BM too. Lewis Chessmen anyone?
Every cloud has a silver lining.
Today’s shrill denouncements from the Swingers Club of odd bedfellows indicates Alastair Darling has been constructively demoted.
A shared obligation which we were prepared to share. But in entering the negotiation room we’ve offered our hand to shake, and received a kick in the balls.
Do you think our negotiating mood might change from now on?
Fuck, of course it will.
@Rod Mac – “I truly fail to understand any unionist that can actually say ,let alone believe that Scotland should accept no assets ,and a share of the liabilities.”
I’m not aware that anyone is saying that?
The ever popular David Cameron and his reign so far.
link to youtu.be
Here is a picture of a specimen £50 note link to tinyurl.com
Here is a picture of a £50 gilt link to tinyurl.com
They are both part of the same overall Sterling currency system. George Osborne and his New Labour chums cannot pick and choose which parts they want to share (the liabilities) and those they do not (the “institutions”!!).
It seems a pathetic, ill thought through play to me.
What a lovely wee dug!
Now where was I?
Osborne follows his master’s instructions and travels to Edinburgh to tell those pesky Scots they can NOT have a currency Union. Hmm, oh is that so Ozzy?
Well let me see now, Westminster tell me I can’t have a currency union with them gosh that really put’s the cat amongst the pigeons then doesn’t it?
Oh wait a minute. Think I’ll tell Westminster to stick our offer of a currency union where the sun don’t shine and they can keep all of their £1.3 Trillion debt for themselves as well.
Meanwhile, back here in sensible Scotland we’ll use the pound any way. We’ll create our own bank of last resort say the Independent Bank of Scotland (I.B.S.) and fill its coffers with the £3.9 Billion currently held in the Bank of England to cover the usage of the Scottish pound. Bet Mr. Kerney will be over the moon at losing £3.9 Billion. I think it’s £3.9 Billion, knowing my luck it’s £3.9 Million.
Oh and lest we forget iScotland will of course be debt free, thank you Ozzy for permitting us to reclaim our own country as an independent country AND become debt free. Who could NOT want that?
Clootie at 5.15
“The discussion has to be about assets and liabilities”….indeed and the asset valuation should make interesting reading to the negotiators, with the given that it’ll be doctored well in advance.
@Seasick Dave – that would be an option. I don’t really see a problem with this. There could be issues of the supply of currency to cash machines etc, but the arguments against such an option from rUK would be largely invalid, as far as I can see. We would bank all the advantages, and none of the risks.
As gilts (UK bonds – “IOUs” / “debts”) are part of the overall Sterling currency system, George Osborne himself has ruled out Scotland being any part of the UKs debt obligations.
That would be a possible starting point in negotiations.
LIndsay – ‘where is Salmond?’
I think you will find the First Minister is on tonight’s ‘Scotland Tonight’ on STV, presume you can get STV?
@Murray McCallum – “The same organisation promises to pay the bearer of a UK bond (or gilt) as the holder of a £5.00 bank note.
That’s because they are a part of the same currency system.
One part cannot be treated differently from the other if you are to have any credibility.”
I see where you’re coming from. I think it’s a completely false comparison, however. The UK doesn’t owe anyone anything who holds a sterling bank note. There is no promise of a transaction, no interest due, and no liability to pay.
A bond is a debt that must be honoured, with interest in the mean time. It’s completely different. You can tell this is the case, as we have entirely different published figures for bonds and money supply.
Bonds can be used to make money, as in QE, but that doesn’t mean they are the same thing.
Andy-B says:
Andy,that possibility brings back the vision of Carmichael v Nicola, but with an even worse result, so much so we would all be in hysterics. Despite the fact they would bring on an anti Independence “referee”. I would love to see it happen, but why would Alex Salmond waste his time.
Do you think for one minute Alexander does not know that, he would be shitting himself if Salmond said “OK”.
Robert Peston has an article up with comments allowed on this, some utter rubbish being spouted forth, but I just can’t motivate myself to correct the misconceptions, but it’s only got 300 odd comments so those of you with tougher skulls may want to bang them on the wall
link to bbc.co.uk
I promise to pay the bearer on demand ? that’s not a promise is it not? there’s nothing backing that promise anymore in terms of hard metal, but there’s definitely still some abstract concept of backing involved. If paying a bearer on demand isn’t a transaction then what exactly is the note doing? It’s not real, it is a promise, especially so in Scotland since nothing is legal tender, a wee strip of tinfoil doesn’t make it real either.
Without that abstract concept of backing then nobody would accept the fiver, it’s the reason that taxi drivers refuse Scottish bank notes, they don’t believe the worth of the note, they assume it has no backing.
What is the value of the gilt without backing?
@Dcanmore – “Negotiations is about assets and debt, that’s what will happen. Scotland will leave with some assets and some debt, the rest is puff.”
That sounds about right.
While I’ve been a bit belligerent tonight about currency and debt issues, I have to say I’m very unsure if this is the correct tactic. The vast majority of English people live outside London, about 60% vote against Tories on a regular basis, and Cameron and Osborne’s poll rating on ‘understanding people like me’ are dire. We can readily understand the view from north of the border.
While I think that technically they are absolutely correct, firing salvos from London on three barrels about future currency unions isn’t a great tactic.
BT have always had a serious problem about how to be positive. I’ve just heard Henry McLeish express his doubts on R4, and I think he hit the nail on the head. Like him, I’ve been wondering why there has been nothing heard as yet about what happens if the vote is No.
I see that some on here are genuinely frightened of this prospect (another Project Fear?) but such fears need to be addressed.
Conservatives have a problem with change – the clue is in the name. Someone needs to start fleshing out how the union can change and decentralize, and accommodate different constituent parts in the 21st century if there is to be anything positive to say about the union in the debate.
this will be Scotland
@Caroline Corfield – “I promise to pay the bearer on demand ? that’s not a promise is it not?”
Yes it is. Present a £5 note, and you would get a £5 note back. That’s all.
Hold a £5 bond, and you won’t get £5 back, until the maturity date of the bond. In the meantime, you can receive interest at the agreed terms of the bond issue. You’ve lent the government money, which they have promised to pay you back at some point in the future.
You’re correct though – sterling is as much Scotland’s as the UK’s, but you want to leave the UK. You’re rejecting the currency union.
It was the Conservatives, Labour and Liberal Democrats who today came out to reject the idea of currency union with out certain strings attached.
I do not believe that the wide ranging Yes campaign or the Scottish Government have come out and rejected the currency union. In light of todays Osborne speech and the news media trailing it there are no doubt many people in Scotland, England and further afield wondering WTF is going on.
As a preamble to pre negotiation today has been a very bad day internationally for the Westminster elite. Foreign TV and news are reporting this as an attack on the Scots. The London financial world is none too impressed with Osborne’s intervention.
If this went well for the Unionists, then they are in a much worse place than we ever imagined.
This ALL comes down to negotiation. The Scottish Government have agreed in principle to to a share of the debt, they have also proposed a currency union.
All cards on the table – what will the Scots have in 2016 if they vote No?
@Lindsay: We’re in the UK, the debt has been raised on our behalf
That’s exactly it: the debt was raised on our behalf. WE didn’t raise it, we didn’t want it, and we didn’t have a say in it. This debt was forced on us without our consent. To suggest that Scotland has a moral imperative to help pay debts which were, in part, raised for purposes explicitly and soundly rejected by the people and elected representatives of Scotland (i.e. Trident, High Speed 2, etc) is the “simplistic idiocy” here.
“The SNP reaction to Currency Union announcement is effectively ‘how dare you treat us as if we were a totally different country’.”
I have just watched Bernard Ponsonby effectively sink Osborne and all on the STV news. Wonder what BBC Scotland will do. Salmond on Scotland Tonight tonight to make mincemeat of Danny Alexander
And another thing:
By all means split assets and liabilities fairly, but if you want to leave the UK, you leave the UK. Deal with it.
Perhaps someone more properly nuanced in the matter of the Union can explain, but I don’t understand how the UK can continue to exist without Scotland. The Crown aspect, certainly, but the UK as a political state was Scotland + England. Ireland & Wales were treated as English holdings, and only lately became considered countries in the UK. Without Scotland, could it legitimately be called the UK at all?
And again, this suggestion of Scotland “leaving” the UK implies Scotland as a junior, not equal, partner. Does a marriage still exist if the wife leaves?
I don’t know, it’s just one of the many bizarre things I don’t fully “get.”
George was referring to iScotland today as a ‘foreign’ country.
Ireland is specifically designated as not being a ‘foreign’ country under its independence arrangement from the UK.
George, the eyes of the world are on you.
The ‘foreigners’ verdict today seems to be that you are threatening Scotland.
Taranaich,
I think the union between Scotland and England created the title ‘Great Britain’. Britain or ‘Great Britain’ never existed before the act of Union (1707).
Then it became Great Britain and Ireland (1807 or something …I’m doing this off the top of my head), and I believe the United Kingdom is a late mid to late 20th conception.
You are right however. ‘rUK’ which we commonly use here is not even a correct future term should Scotland claim independence.
England is a Kingdom, Wales a Principality and Ireland a Province. It would probably be better to call them the ‘Confederation of Nations of Britain’ …and isn’t that a nice mouthful.
A name …such a simple thing …but in the case …actually quite difficult. Well, the Treasury likes to speculate on the future, so it can come up with one if it wants.
OT I’m puzzled about Trade. If rUK has so little industry what exactly are they trading with us that we need and couldn’t produce ourselves?
And how much of the stuff that comes up the Motorway is actually imported into England from somewhere else? Couldn’t we import that direct?
They sent a tory called osbourne
he was here to send a fear bomb
he could have been here for weeks
but shat his breeks
so fucked off before a big storm
Alec said “The UK doesn’t owe anyone anything who holds a sterling bank note”.
Alec, give me your sterling cash deposits then as you are saying they are worthless.
You really do write some rubbish.
@JLT I think I read recently that Wales has been reclassified as a country, therefore there is a possibilty of the UK of Britain and NI – but who knows.
I think this is one of the reasons why a new ‘tag’ – is that what it’s called – ‘dotscot’ has been set up.
Alec
The more you hear about the options and the realities of them all you realise that Mr Osborne is as scary as a Gruffalo.
this has got to be one of the funniest ones yet. as I said before I thinkthey want a war link to eveningharold.com
“So it was pleasing when Sir Nicholas, strikingly but sensibly, refused point-blank to endorse the position of those in the No campaign who scream that lenders would regard Scotland as a nation in default.”
This is a bit of a stretch. On foregoing our share of the national debt, he said explicitly that he “does not believe this is a credible threat” due to the damage it would have on our economy.
Nobody can speak for how the markets will react with 100% certainty, but what is clear is that if you want to gain favour with the markets and thereby keep your borrowing costs low then getting involved in a lengthy negotiation about your debt is a pretty terrible way to go about it.
“This is a bit of a stretch. On foregoing our share of the national debt, he said explicitly that he “does not believe this is a credible threat” due to the damage it would have on our economy.”
He said it wouldn’t happen because protracted wrangling would cause uncertainty, not because it would be seen as a default. Which is why I pointed out, satirically, that the wrangling would in fact take under a minute.
“why send in the paras to ‘police’ a civil rights march?”
For the same reason they would send tanks into Glasgow in 1919
link to en.wikipedia.org
Liz,
Wales was always a country. It did have Kings and Princes once, but guess who ended them.
Yep …Edward Longshanks, Scotland favourite all time English King. Hammer of the Scots.
Without going into it too much, Longshanks demanded (just like he did with the Scottish King John Balliol) that Llywelyn ap Gruffudd bend the knee to the English Kings and so become his man. The Welsh prince did so, but then he reneged on the deal.
Now, Edward got a bit miffed at this. He got an army which scoured the whole of Wales until finally, he found Llywelyn. Taken back to England, Llywelyn was executed.
To assert his authority and claim over Wales, Edward Longshanks took the title that Llywelyn had claimed (Prince of Wales) and thus used it for himself. It is that title that is still used to this day.
Aye …he was some boy was Edward. The man who created such enmity with the other home nations that it is one of the reasons why Edward is widely detested in the Celtic Kingdoms, and remains so to this day.
Kingdoms …Tsk…nations! Nations!
Dave McEwan Hill
Saw that too. Ponsonby was livid that the new “Coward of the County” (Osborne) would not take questions from journalists, and was rushed away in a car by his minders.
Who organised this event and who were the small band of people invited to it? Held in the Point Hotel, Edinburgh.
Despite the Civil Service speak there is desperate stridency about George’s position and the implied threats from the Treasury. However the Treasury are not independent on this matter, they are fighting a rear guard action to prevent a yes vote and have provided a number of lengthy papers for Osborne attacking every aspect of the Scottish economy. I am not in the least surprised by today’s speech although I am surprised that George thought this would play well here. It undoubtedly pleases those who are firmly No and utterly repels those who lean to Yes but what impact will it have on the Don’t Knows?
I see the Courier poll on people’s response to the speech is now 42% Yes 32% No and 26% Don’t Know.
@Alec
A £5 note is basically a 0% bearer bond. No more no less. Least I’m pretty sure thats what they told me way back when I started in Investment Banking.
Has it changed?
Bill Walters
It is true that if one defaults on debt then it affects future borrowing rates but Scotland does not have debts. It cannot default. If Scotland does agree to share the burden of UK debt it will be by direct payment to the rUK. Scotland would have no interaction with specific bonds or other debt structures. No one would be defaulted on by Scotland even if it took time to negotiate a deal.
Ordinarily when one country declares itself a successor state and the other is a new country (or countries as was the case with the Soviet Union) the successor state takes the debt and all the memberships and embassies and whatnot. The UK wants to be the successor state take all the trappings of the former UK and Scotland only gets successor status when it comes to debt. This is patently unfair and if attempted would be viewed as unfair by the markets. Consequently the warning that without assets there can be no debt would not be viewed as defaulting.
On a practical level a modern western European country with no debt would be an attractive proposition. If bonds were raised would China or Saudi Arabia care if rUK was pissed off? The threat to block EU and NATO membership is more tangible but as I am lukewarm about the former and couldn’t give tinker’s about the second so I don’t care.
@Muttley79,
I think you are right and Salmon is playing a brilliant hand, according to Andrew Neil Salmond was historically in favour of the Euro for Scotland.
The Euro is not popular with the Scottish people so he states he wants a shared pound which the central bankers will not endorse, and then predictably the UK government has to be the bad guy and say no.
After a few weeks of the media ‘clambering for a new currency policy’ and the UK government being accused of bullying, the SNP says reluctantly it has to move to the Euro.
Brilliant strategy, absolutely brilliant. The central bankers are very pleased as any debt will be secured against a hard currency, the Euro. They now care not if a yes or no vote and their money is safe.
Brilliant strategy satisfying everyone, unless one believes in true Scottish independence from both the UK and the European Federal state.
@Southerner
If you can’t get the name of Salmond right, then your UKIP sounding pish is not going to get you anymore respect than it would otherwise. You must be a complete dolt, in the same league as the idiots at Pacific Quay, who think Scotland will have to join the Euro. Reporting Scotland GTF, UKIP trolls GTF.
Southerner
I do confess to a sneaking suspicion that he is up to something. My feeling is that he is moving to limit the amount of debt that the rUK would try to shove our way although I do not think it will be a total walk away. I think the Treasury secretary thinks so too as he makes a rather unconvincing case that the pound and BofE are not an asset. It stands to reason that if he argues that we would be worse off without it then it is an asset. However, there may be a currency aspect to this too.
Salmond is many things but he is not daft.
Osbourne’s piece today was all puff and (white) powder.
link to youtube.com
Feast your eyes boys, and girls.
bjsalba says:
13 February, 2014 at 6:43 pm
OT I’m puzzled about Trade. If rUK has so little industry what exactly are they trading with us that we need and couldn’t produce ourselves?
And how much of the stuff that comes up the Motorway is actually imported into England from somewhere else? Couldn’t we import that direct?
Spot on Bjsalba, spot on, wrt import statistics, and the same in reverse for export ones, the real overseas ones.
@Alec
Since you raise the Irish debt issue see second link for the thing of “commensurate value” you mention.
link to trove.nla.gov.au
link to hansard.millbanksystems.com
Ireland never paid a penny of UK national debt. UK squealed about that too. Much good it did them.
For other precedents where the debt was left with the main successor state, see Russia and Pakistan with respect to British India’s debt. Oddly, these are two of HMG’s key precedents.
MAJORBLOODNOCK at 2,51
‘Such is their moral rectitude, it would not surprise in the slightest if the London banks were first in the queue to lend a debt-free iScotland as much money as necessary.’
I haven’t laughed quite so hard for quite some time sir, I thank you, Gins are on me old chap!
This just in from Alistair
”
Dear Supporter,
It is now clear beyond any doubt – the only way to keep the Pound is for Scotland to remain in the UK.
People need to know that when they go into a polling station in September they will be voting either to keep the Pound or ditch the Pound. A vote to leave the UK is a vote to lose the Pound.
We need your help to keep the security of the UK Pound.
Alex Salmond has no plan for currency in an independent Scotland. The SNP wanted to turn the pound into the Eurozone but understandably the rest of the UK have said they don’t think this is a good idea. The SNP Government had already ruled out using the pound without agreement in the way Panama uses the Dollar. So what money will Scotland use?
What we need now from the SNP isn’t so much a Plan B but a Plan A. Now that using the Pound is off the table, would we be rushing to join the Euro or set up an unproven separate currency?
Alex Salmond should stop making reckless threats about defaulting on debt that would put jobs and businesses in Scotland at risk. People know that if you don’t pay your debts your credit rating is shot and that means everything is more expensive.
Help Better Together campaign to keep the strength and security of the UK Pound by donating what you can today.
Alistair Darling
Better Together Leader
PS don’t forget to follow us on Twitter and like us on Facebook.
“
“The SNP Government had already ruled out using the pound without agreement in the way Panama uses the Dollar. “
Does anyone recall when that happened, just out of curiosity?
This has all happened before. Back in the 13th century when Alexander king of Scots died without a male heir, the Scots nobility asked for king Edward of England to help choose a new king of Scots from several claimants.
Edward (”in the guise of a friend”) chose John Baliol and almost immediately insisted that now that Baliol was in his debt (!) he and his Scottish army must help Edward and the English fight to expand his territory in France.
Baliol said ‘nuts to that’ (or similar) and the long and short of it is that the English invaded Scotland and slaughtered over 6,ooo men, women and children in Berwick.
The streets apparently ran red with blood.
Well you all know about what happened next with William Wallace and Robert Bruce. It took a long time and lots and lots of spilled blood, but Scotland eventually regained her freedom and independence.
The point of this wee history lesson is that what is happening just now is just a re-run (perhaps not so bloody) of what happened then. ie.
‘You owe us, so you must do what we say, and if you don’t then beware of the consequences’.
It didn’t have to happen then and it doesn’t have to happen now, but I don’t think the unionists know any other way; they can’t help themselves, and that is a great pity. Prepare for a long siege folks.
Does anyone recall when that happened, just out of curiosity?
Nope as far as I am aware the SG approach is to go for a currency zone. I don’t think any thing else is ruled out or in.
“The SNP Government had already ruled out using the pound without agreement in the way Panama uses the Dollar.“
I was puzzled by that one as well, sure I read it today in a piece quoting the sainted A.D.
Rough Bounds
I’m a Berwick boy and we Berwickers know our history, and rightly so.
The population of Berwick at the time was upward of 20,000, THE main trading town in Scotland.
The adage runs “it took 6 hours to take the town and 3 days to slaughter the town.
The streets did run with blood.
The streets did run with blood.
Although I wasn’t actually there, so can’t actually attest to this. wee embaressed, smiley, thing.
Some funny comments in here. The Treasury report stated that rUK would be financially better off taking on board Scotland’s portion of national debt than accepting the incalculable risk of a currency union with a foreign country with divergent politics. Those in here who say that banks will still lend to iScotland have a point, but the expected yields will be significantly higher than at present because: (a) Scotland’s smaller and less diversified economy represents a riskier investment; (b) the rUK will probably bring legal action against Scotland (as they have against Iceland) meaning an elevated credit risk and (c) iScotland would be self-evidently considered a successor state as Russia was when it defaulted on Soviet Union debt ands perished high interest rates as a result. These are the facts. But no doubt I’m just scaremongering, sabre-rattling etc.
“These are the facts.”
No, those are some assertions. Important distinction, dear.
@Northbrit – thanks for those links re Eire and the debt – you’ve gone to the trouble of confirming exactly what I said. Eire made an agreement that was accepted, so didn’t have to accept any debt. That they reneged on the deal isn’t really relevant.
I also mentioned that colonies wouldn’t normally be considered responsible for the sovereign states debt, so obviously that example isn’t relevant either. Don’t know much about Russia and the USSR, so can’t judge how relevant that example is.
Scotland should leave the debt with the rUK. Why take any responsibility at all for the UK Pound denominated debt? A highly desirable outcome for Scotland.
@alec
Here is something to think about.
As the UK/GB ceases to exist after Scottish independence, then neither Scotland nor England is liable for the £1.2tr debt. That is surely a winner for everyone, apart from any Brits silly enough to say that the UK still exists. Any Brits still claiming that the UK still exists will then be liable for the debt and will be required to pay it up at about £5 per week
@Patrician – that’s exactly the point I made in response to the stupid idea that Scotland could decide not to have any of the debt. The clear logic of that is that England, Wales and NI declare themselves independent, and bingo, all debts are void. Utterly stupid idea.
Like I say, and like Sir Nick MacPherson said in his letter, Scotland need UK cooperation for independence. The most obvious example of this is EU membership. The EU is very clear on this, and UK will retain a veto on new members, Scotland would not be an automatic member.
No Scottish leader would really be that foolish to refuse to take legal responsibility for part of the UK debt, and those on here who think that this is in some way a viable option are demonstrating what a limited grasp of reality they have.
The Irish example is also a great one to consider. Following this example, I would imagine London will require full, legally enforceable agreement to service the debt share,so the idea that Scotland could ever relinquish responsibility as the debt is in the UK name, is likely to be completely bogus.
To extrapolate the lodger analogy further. Imagine the following conversation if the lodger moved next door and their house was ten times smaller…
Ex-lodger: How about we share a bank account?
Ex-landlord: No thanks
Ex-lodger: How dare you! Stop bullying me!
These are the facts – SAM
Pretty sure Russia was continuity state for Soviet Union and not successor state, this was agreed between all former Soviet statea and UN. That is why Russia kept it UN seat that was previously held by Soviet Union…
rUK cannot be Continuity state and Scotland be successor at the same time. Legally ALL debt is in rUK name. Why do you think they said 2 weeks ago that yes they would guarantee all debt.
UK is in court against Iceland not on debt but on its banking guarantees that it did not deliver on that UK subsequently paid.
Significantly higher ? Based on what ? Wishful thinking….
Like I say, and like Sir Nick MacPherson said in his letter, Scotland need UK cooperation for independence. The most obvious example of this is EU membership. The EU is very clear on this, and UK will retain a veto on new members, Scotland would not be an automatic member.
This is bullshit. Its wishful thinking at best. There is absolutely no precedent for this and all past behavior of EU has been complete opposite. Scots are EU citizens and will remain so. UK will not have a veto same as it didn’t have a veto over East Germany.
To extrapolate the lodger analogy further. Imagine the following conversation if the lodger moved next door and their house was ten times smaller…
Ex-lodger: How about we share a bank account?
Ex-landlord: No thanks
Ex-lodger: How dare you! Stop bullying me!
Jesus wept, really ?
Hi Rev,
Commenting for the first time.
Thanks for pointing out a big bit of our GERS expenditure is debt servicing. That was something I had missed.
But I have just check GERS 11/12 and I see debt servicing at £4.072Billion. Which isn’t enough to extinguish the deficit if we are debt free.
Have I missed something hidden somewhere else?
Ex-lodgers and ex-landlords no longer have any economic trade relationship with each other. Scotland and rUK will.
Better find a better analogy!
@Roddy Macdonald
Voila! (It took a while, not a lot rhymes with Punt).
Ireland made use of the Punt,
„Scots cannot“, Grorge Osborne is blunt.
But Scotland won’t beg,
It cares not for Clegg,
Or Cameron, Osborne or Hunt.