The open goal
We’re still trying to get our heads around the most recent developments (that haven’t actually developed yet) in the independence debate. For a No campaign that’s been based almost entirely – and at least partly effectively – on endless scaremongering about “uncertainty”, the defenders of the Union suddenly seem to be going out of their way to sweep it aside.
Ever since the UK government’s announcement that it would be responsible for all UK debt, it’s been clear that Westminster simply couldn’t continue to resist the pressure from business to put an end to at least some of the doubt that the government itself had created. But we’re still bemused about the timing of the apparent intervention George Osborne will apparently make tomorrow.
As we said last night, we can’t see a single strategic or tactical advantage for the No campaign in ruling out a currency union now, rather than much later. It gives the Scottish Government and Yes Scotland months to deal with the issue, and in many ways could be a massive liberation for them.
There IS a danger, but it requires such spectacular stupidity from the Yes side that it’s barely conceivable. IF all three London parties do state, unambiguously and unequivocally, that they’ll refuse to enter into a Sterling union with an independent Scotland – and we’re still far from convinced that they will – then it will no longer be credible for the Yes camp to simply say they’re bluffing.
Let’s be clear – Osborne, Balls et al WILL be bluffing, but you can’t go for the next seven months simply insisting that they’re lying, even if they are. The public just won’t swallow it. So the only sensible reaction from the Scottish Government and Yes Scotland is to call the bluff and grasp the nettle.
We’re not going to get into the details of the alternative options here, because they’ve already been dealt with concisely and comprehensively by others – there’s a pretty good take by Robin McAlpine over here on his new blog. By a distance the most sensible is a Scottish Pound pegged to Sterling, which would for almost all intents and purposes be a de facto currency union as far as most people were concerned.
(It’s perhaps worth noting at this point that the vast bulk of the electorate doesn’t actually leave Scotland on a very regular basis, and won’t notice any difference. We already have our own banknotes, and at a 1:1 fixed exchange rate lots of shops on both sides of the border would simply accept both currencies at face value, in much the way you can use Euros in lots of larger shops now. As for the danger of English shops not accepting Scottish notes, well, how would that be any different to now?)
A pegged sovereign currency has very few drawbacks compared to a currency union – it would give the Scottish Government considerably more monetary and fiscal policy control, for example. The main downside is the need to have a foreign-currency reserve fund, but borrowing to set up one of those would still cost a lot less than the share of UK debt we’d be walking away from, so Scotland ends up quids in on the deal.
There’d of course be a degree of unwelcome inconvenience for businesses, but hardly an earth-shattering one – most companies now do business globally on some level by trading with the USA or Europe, and banks handle currency exchange within transactions automatically, as anyone who’s ever bought anything on eBay will know. With a fixed exchange rate of 1:1, that process will be essentially invisible.
Pro-Union businesspeople who protest about such things have loud voices in the pro-Union media, but only one vote in the referendum like everyone else. Dr Matt Qvortrup of the Centre for Policy Studies wrote an interesting piece in the Scotsman last week about the folly of trotting out too many millionaire bosses to tell people how to vote, because their interests and views are often at odds with those of normal people, and it would be a difficult card for the No camp to play.
(Dr Qvortrup suggested back in May last year that an independent Scotland could escape any debt obligations, with the UK government being responsible for everything should it choose to play hardball in negotiations. He was proved exactly correct.)
The No campaign has made great play of both the “uncertainty” factor and of divisions within the Yes camp over currency. This latest move, if it comes to pass, would rob it of both of those weapons. A Sterling union is still the most sensible option for both Scotland and the rUK in the short to medium term, but the rUK has far more to lose than Scotland does from ruling it out.
rUK businesses will suffer all the same inconveniences as Scottish ones do, and will blame the UK government for them. (A recent poll showed that UK citizens supported the Scottish Government policy of a currency union by a factor of 6:1.) The rUK will lose North Sea oil’s contribution to the UK’s balance of payments, a serious blow. Scotland, meanwhile, will gain policy freedom and lose debt, while 95% of its people don’t even notice that anything’s changed, because the money in their pockets looks and acts the same as it always did.
Tomorrow’s speech could win or lose the entire independence debate. If George Osborne really tries to bully the Scottish people with an empty threat – a “declaration of economic war”, as Iain Macwhirter put it on BBC Radio Scotland this morning – he’ll be giving Alex Salmond a free shot at an empty net. If the First Minister muffs it by adopting a policy of denial from now until September it’ll be political suicide, and we simply can’t see him being that inept.
If on the other hand he tucks it away calmly and without fuss – at any point in the next couple of months, although the sooner the better – by saying “Okay, have it your way, we’ll have our own pegged currency and you can shove your debt up your arse”, we might just get down to Ladbrokes and put every penny we’ve got in the world on a Yes vote while the odds are still good.
link to itv.com
Interesting that Deutsche Bank analysts suggested that a Scots £ pegged to Sterling was the best option in the event of no currency Union. Will try and find the link.
“Okay, have it your way, we’ll have our own pegged currency and you can shove your debt up your arse”,
I think it will be more subtle….
‘Our prefered option is still for a Currency Union for the reasons outlined by the Fiscal Commission but in light of recent comment from both the Chancellor & Shadow Chancellor, if no agreement can be reached we’ll have our own pegged currency and you can shove your debt up your arse”
….sort of thing.
Perhaps say it’ll be pegged for 5 years whilst the democratically elected Scottish Govt decides on a long term solution, recommission the Fiscal Commission to provide the best advice possible to the Parliament.
>With a fixed exchange rate of 1:1, that process will be essentially invisible.
Except for the ‘transaction tax’ levied by the bank and credit card companies.
“Except for the ‘transaction tax’ levied by the bank and credit card companies.”
With a 1:1 pegged currency that ought to be either microscopic or zero.
Linky:-
link to poundsterlinglive.com
A Sterling union is still the most sensible option for both Scotland and the rUK in the short to medium term,
Despite this, a currency union will only abate market speculation if it were long term. John Swinney agreed this. It would not surprise me one bit if this announcement is not a bluff due to the stupidly great importance of the financial sector in Britain.
Baring in mind, London is basically all these Wombling elites care about, and the financial sector is even more important to London than to the UK.
If Fitch and Moodies are concerned about the ongoing speculation created by the lack of a concrete stance on a CU. The cards played, may not be from Westminster’s hand at all.
Is there any actual difference between using Sterling “without permission” – as described in Dennis’s link in the first comment – and creating a Scottish pound that is pegged 1:1 with Sterling? Other than the notes you’d use, perhaps. I get the feeling “we can use it if we want” is the more likely option, since the “Sterling is a fully convertible currency” line was getting tested ages ago.
“I get the feeling “we can use it if we want” is the more likely option, since the “Sterling is a fully convertible currency” line was getting tested ages ago.”
Maybe. I’m deferring to Deutsche Bank’s opinion on the matter, as I suspect their expertise is slightly greater than mine. As far as I can see the main difference is that a pegged currency is considerably less limiting in terms of sovereignty.
Im all for the stick it up your arse, but for the DR, Sun, DM readers and low information types, the threat that they wont have the pound backed up by the BOE, will make them fear for their savings, pensions, insurances and mortgage type products.
And if we don’t take any debt, then the fearmongering about how an indy Scotland will be able to borrow with no track record to set up a currency reserve fund will come into play.
I never thought that they would definitively rule out a currency union so will wait and see what tomorrow brings, but there is certainly something which has triggered what has been happening since the turn of the year.
Could end up with something like vote YES and trust us that your savings, pensions, mortgages etc will be safe, and how will that look in the run in with the whole media out to monster Salmond and his government.
“And if we don’t take any debt, then the fearmongering about how an indy Scotland will be able to borrow with no track record to set up a currency reserve fund will come into play.”
We don’t need a £150bn currency reserve fund, though. And we’re told our borrowing costs would be higher even in a Sterling union. So whichever way you slice it we’re better off.
It really does appear that the Tories are on a mission to lose this now! Let’s hope so!
Greatbaldo I do like it, you should write for the Scottish Government!
The Scottish government can also show that they were being reasonable in trying to achieve what was best all round.
Having our own pegged currency and more freedom on monetary policy sounds far better to me. Also, given we already have our own money anyway, can’t we just keep the design but phase off the word “Sterling” gradually and replace it with “Scots”? That way no one will even notice a change in the pound in their pocket. Ironically, a currency union may mean we do lose our own design, which might be even less popular with a lot of people here.
Should we not be careful and wait for what he actually says before spincters are prepared – on both sides of the debate – for shafting?
This does remind me of the time when they said they would annex Faslane, that didn’t last long either.
O/T, and the weekly pantomime start,s with a wee smile across the dispatch table,( Cameron n Milliband Love In.
It’s not much but I’m putting my tenner on a Yes vote later on this afternoon.
Pedro
Go to Ladbrokes and take the 7/1 for 55% or better
Banks HQ outside London
The 1844 Bank Charter Act tied the issue of notes to the gold reserves and gave the Bank sole rights with regard to the issue of banknotes. Private banks that had previously had that right retained it, provided that their headquarters were outside London and that they deposited security against the notes that they issued. A few English banks continued to issue their own notes until the last of them was taken over in the 1930s. Scottish and Northern Irish private banks still have that right.
1844 Bank Charter Act is still in force today although small changes were made in the 2009 banking Act. (Mostly to give security to other issuing banks the same level as BoE)
Notes in Circulation (NIC)
As at 28 February 2013, the three authorised banks in Scotland had a total of around £4,000 million of NIC and the four authorised banks in Northern Ireland had around £2,100 million of NIC.
link to bankofengland.co.uk
at last the real battle commences – & Scotlande still has all the aces.
As you said, Rev, the timing of this is very difficult to fathom. It just does not make sense. Even from a BT perspective, I would have said it may have been a useful shot to fire a few weeks out, when voters get last minute jitters, but seven months gives AS plenty of time to deal with it. Seven months is enough time to panic the markets big time. Are they really in such a state of panic? Or are they just stupid?
Bigdrone… precicely this. I suspect that Osbourne’s reported statement (reported by a pathetic BBC by the way), may well turn out to be no more than for the purpose of a scaremongering headline. As I said before, lets wait and see what he actually says.
Wouldn’t it be useful to see some views expressed, by those who claim to know, about how the markets would react to us saying “shove your debt up your arse” in these precise circumstances? Better Together scream that would be “default”. It’s one thing, morally, just to welch on a debt that you’re legally obliged to pay. That’s default. It’s another thing to refuse unreasonably to contribute your fair share of it, even if you’re not legally liable, but I can see that that that, though not technically default, doesn’t give a prospective lender comfort. Presumably these then are both the kinds of things that might lead a lender to charge a premium in light of a perceived risk of default. But I am also presuming that the markets wouldn’t punish a country for reacting, reasonably, in response to threats of the kind Osborne is expected to make. In short, the markets make what is really (though not doubt they’d not like the phrasing) a moral judgment: if all other things are equal, will Scotland meet its obligations if we lend to it? That would not require us to be pushed around in negotiations with the UK, though, and the markets would very easily draw a distinction between default and a reluctant refusal to pay the rUK anything towards servicing its debt as a result of the outcome of the swings and roundabouts of negotiations.
As I say, though, it would be very useful to have someone who knows about these things explain all this. You might almost expect the broadcast media to think about.
Personally I’ve always been in favour of the EURO but the continuous politically inspired canvass against it makes this impossible.
It is worth pointing out at all times however that over the piece the EURO is much more stable than Sterling and has steadily climbed in value against both Sterling and the dollar.
BT have been wailing on about a ‘Plan B’ for the currency. This is an obvious attempt to force the issue and get the Yes camp to say what they’d do. Of course the No camp will have FUD answers prepared for any answer and the media will be primed & ready to repeat London’s word.
It’s a bear pit and Yes will have to tread carefully.
It’s difficult to see how Osborne can now continue making vague comments about a currency union being ‘unlikely’.
It’s pretty clever to have Better Together and the UK unionists expending huge time and effort on attacking something the people of Scotland aren’t particularly exercised about
Its like sending our a decoy to draw their fire.
Most people are only concerned that they have enough money, whatever it is called, in their pockets,purses and bank acounts.
Meanwhile UK is caught “bullying” Scotland.
I would rather we were in the Euro or have our own pegged to the Euro or a Scandinavian currency
Yes, Stu is right on all counts here, to peg is the best” other option, but I would also add, “for the time being”, not by broadcast but by intent.Should pegging not, for any reason, prove to be unsuitable as a FREE Nation, we can do what suits us.
That would be the preferred route to me now as all we are going to encounter is bitterness and spite, so we should just call their bluff and go for it, with all it’s benefits.
To think this would not be the case is not thinking ahead.For example London is huge in the Financial World with links all over the world, do we really believe there would not be an orchestrated effort to hurt us?
By trying to effect our economy.I would not count on it, at least until the dust settles. We know they are devious and manipulating, that is how they are, that is who they are, they will not suddenly change their ways.
All this is very well and indeed possible, but in a New Scotland we will forge our own friends and alliances, but it will take time. Meantime we need to be very careful and watchful.
To be quite honest, I actually prefer Scotland to be pegging a Scottish Pound to Sterling.
And very surprisingly, not one of my Unionists workmates have said a word. In fact, I haven’t heard a solitary peep from anywhere on my runs this morning. Let’s get one thing straight …this ‘anti-love bomb’ from George has NOT rattled the Scottish people.
even on Call Kaye, folk phoned in to say that if this the attitude of Westminster, then they can shove it! This might be the thing that finally begins to push Scots towards the exit.
I’m truly wondering if Dave, George and William are finally getting annoyed with the Scots. We just don’t seem to be taking the hint; ‘Can you Scots just go away …like far away …and just don’t come back. We really can’t be bothered with you anymore’. Is this new Tory tactic the first of a broadshot to finally getting rid of Scotland.
Makes you wonder!
Whatever Osborne is planning to say, why trail it for two days before your announcement?
It is a very hard choice to make indeed and its all up to Chancellor of the Exchequer Gideon Osborne, who prior to becoming another Tory financial genius just like fellow Tory boy Alistair Darling “did a few part-time jobs including as a data entry clerk, typing the details of recently deceased into a NHS computer database. He also briefly worked for a week at Selfridges, mainly re-folding towels” according to wiki.
Its great to know the future of Scotland is in such experienced Tory hands.
I didn’t think that any threat to withdraw a shared currency that has existed for over 300 years and belongs to the two partner countries that formed the union would be able to be carried out legally.
There are legal aspects to this: is it legal to have a mere cabal of political parties in the UK deciding Scotland cannot keep what is our currency when we have been told by the same uk parties that this is a decision for the people in the rUK to vote upon?
What I am getting at is that the above reason stated by Darling et al. is among half a dozen ‘reasons’ that we ‘might’ not be allowed to keep what is our own currency, and I would expect the announcement of removing our currency would have to be backed up by strong legal arguments.
Is it hoped that the Yes campaign will simply argue about this for the next seven months, or is it just a way to point at Yes and say “See, we have forced you into the plan b we said you needed’ and therefore add another tier of uncertainty so loved by the unionist no camp?
I do see this backfiring on Osbourne and his labour bedfellows, there is a big risk in telling us our currency is at the whim of a bitter attitude towards us for having a democratic discussion and then a vote in a referendum and too many people for comfort will see this as a threat on our right to partake in a legal democratic vote.
Dear George, please please refuse Scotland a currency union. We are paid in Euro’s and live in Enniskillen N/I. We really could do with the Euro going 1:1 with sterling because we enjoy going to the shops. Please can you fix it for us.
The Kelly family.
This announcement, if it turns out as expected, will put enormous pressure on Labour. Labour now has to turn its back on Scotland completely, and back Osbourne’s refusal to share currency with iScotland, or they shy away, looking very weak in front of their target audience in SE England. Everyone expects the tories to threaten Scotland, but what about Labour?
So, are the Labour party also going to threaten Scotland if we vote YES in September? We need to know, now.
I am not entirely convinced the open goal will be bagged. Initial comments from Sturgeon this morning seem to indicate the hardball position in terms of debt, but fall short of saying that we would use the currency anyway, or have a scottish pound pegged to Sterling (not much difference between the two I know).
It will be wait and see I guess on this one, just as we are all on tenterhooks for Osborne leaving the empty net vacant tomorrow, and just as crucially, how Balls and Alexander respond.
It’s perhaps worth noting at this point that the vast bulk of the electorate doesn’t actually leave Scotland on a very regular basis, and won’t notice any difference.
Around 0.56% of the Scots population cross the border on a regular basis for work etc. Should remember to take their bank card if needed. I don’t suppose this would be new to them given the problems you can have with Scots notes in England already.
I feel certain that the rest of the UK will not allow a currency union and it most certainly would not be in Scotlands interests to have one. Furthermore, the recent problems with the Euro has proven that currency unions don’t work where the fiscal policy of the countries involved diverges. I think George Osbourne is actually being genuine in examining this point at this stage as it would be totally irresponsible not to. The assumption by the nationalists that Scotland would automatically be able to use the pound whilst having fiscal independence is laughable. Especially when they try to play this off against the repayment of the national debt. I think Osbourne has give the Nationalists a chance to develop an alternative strategy should there be a yes vote. To me that is the only responsible thing to do. Furthermore, if you want to welsh on your debts then so be it. Scotlands share isn’t unmanageable and I believe it will cost the UK more in the long run to have a currency union with Scotland.
“Furthermore, the recent problems with the Euro has proven that currency unions don’t work where the fiscal policy of the countries involved diverges.”
They don’t prove any such thing. The Euro has survived despite incredible pressures leagues beyond what a Sterling union would ever have to face, despite endless predictions of its imminent collapse.
Until Osbourne puts something on the record nothing has changed. Yet look at all the panic and speculation this rumour has caused.
IMO This is an attempt by HMG/NO to stop the slide to yes becoming a route. They are trying to spook the horses to prevent them settling into acceptance of a YES mentality. THAT IS THE POINT HERE. they need time to try and actually find a NO campaign that might, just might gain some traction because at the moment there is absolutely no positive case for the union, and they know it.
So fear bullying and nastiness parcelled up in lies and broadcast by the EBC are the only love bombing we are getting, and it ain’t working, plus any credibility the EBC had is being damaged permanently. This is a very dangerous position for the future, whatever the result of the referendum.
THEY ARE TRYING TO BUY TIME TO FIND A POLICY WHICH MIGHT GET THEM A NOTHER CHANCE.
HLOD YOUR FIRE AND HOLD YOUR NERVE! WE HAVE THE HIGH GROUND.
This piece is completely vindicated by the Adam Smith Institute, i.e. pegging to the pound rather than a formal currency union is far preferable.
link to adamsmith.org
It looks like BT has been utterly undermined even before Gideon’s proclamation.
Bring it on!
Financial Times quoting A Darling saying that all 3 BT parties will absolutely rule out currency union:-
“These will be totally emphatic statements from all three main parties making it clear that it’s not going to happen.”
link to ft.com
“Financial Times quoting A Darling saying that all 3 BT parties will absolutely rule out currency union:-
“These will be totally emphatic statements from all three main parties making it clear that it’s not going to happen.”
link to ft.com“
Come on, folks, you know the rules for paywalled links. I don’t have time to dick about fixing them all myself. This took me ten sodding minutes that could have been put to better use:
link to archive.is
Didn’t Ireland have a pegged currency that endured for some 50 odd years?
Is this not a case of the BBC calling the shots? Seems a tad coincidental that this non-story breaks the morning after Barclays effectively states that independence won’t be a problem, no? Either way I suppose it smacks of desperation.
Hmmmmm…..
I don’t know what to make of all this. I’ve never liked this releasing a speech the day before you make it malarkey. If everyone knows what you’re going to say, why bother with the speech? Wouldn’t it be more mysterious if they said they were going to make a speech….and didn’t tell the press what about!
It’s like they’re testing the water with it….see how the public/markets/business react and then depending on that, wheeling out whichever speech is deemed the best one from a selection in a drawer!
No matter what Osborne finally states, the fact remains that he, via the UK state broadcaster, has made the first hostile threat in the campaign.
Scotlands YES position has been pragmatic and has been open to negotiation as set out in published documents from the Scottish government.
Consequences: Can the UK PM remain out of direct debate after this intervention? What’s his opinion and why?
Actually, this is the second threat from a UK government acting in as a Colonial governor. The 1st was the threat of annexing Scottish territory for Trident access, which they later retracted. This is more serious though because it shows the UK government does not class Scotland as a partner in any Yes or No scenario.
We are Governed as a semi autonomous colony.
I thought we were together? If we were considered a partner and if this were not really a threat then Osbourne would have had a full debate and had experts draw up the pros and cons of different scenarios.
Scotland would, if it continued to use Scottish bank notes, then need a central bank to guarantee those notes through holding reserves.
link to en.wikipedia.org
you can see what their trying to do, sorry wont work this time no matter what they say people are getting turned off by the no camp. I totally agreed with everything Max Kiser said on his show. Pegged to the English one ton rock currencey no thanks,thats like being in the Titanic after the iceberg hit and saying dont panic everythings going to be all right, be in the EU that wants to take 70% of our laws no thanks, i would rather we made our own laws and not waste monies on another layer of buerocrats.
Is the BT ‘ganging-up’ a case of them trying to steal our Groupthink?
I don’t know why they’re bOTHERING …
I suspect that Osborne will merely reiterate what he has already said, but put an even more negative slant on it.
Rather than say they will not agree to a currency union.
I think they are going to say No to currency union. Try and watch or listen to the BBC in Scotland even for just half an hour and the BetterTogether propaganda is really really scary. Gilt markets watch the polls as much as anyone and we all know according to polls, its a very clear no win. The Tory party is the City in Westminster, so its just plain old iron fist in iron glove time now. What would Saint Thatch do and mind how Gideon wept at the Iron Lady send off.
As I’m not of the banking industry and so unfamiliar with its terminology. I need to stick with whatever key principles I can identify.
For example the talk is of the Bank of England being Lender of last resort, in a country with a £1.4 trillion debt? So just what comfort does that afford a creditor to the UK? That the B of Eng could truly meet its obligations if a financial crisis arose? If the creditors holding the £1.4 trillion of UK debt decided to call in payment? With independence the UK is going to lose 10% of its exports due to Scotland assuming independence. Seems to me that would chip away at confidence in the Bank of England notes that declare , “The Bank promises to pay the Bearer”.
Then there is the scenario of an independent Scotland, no debt; producing seven times its domestic consumption of oil and so a net exporter ; a net exporter of electrical power; net exporter of food and beverages – whisky is the tenth largest UK export; universities that contributed close on £8 billion to the UK economy in the 2012/13 fiscal year.etc etc.
Would you like to have your account held in English or Scottish currency Sir/Madam?
Rev, I really do hope that George Osborne is going to state 100% that Scotland will be barred from using the pound.
It will be the first genuine piece of legislation that the NO campaign have put forward.
And capped off with similar statements from Ed Balls and Danny Alexander.
But I still think they will disappointment us, because IMO
it would be illegal to make such a definitive statement because you would be making policy for a future Parliament that hasn’t even been elected yet.
Max Kiser is right about Salmond he is a person who wants independance from a foreign power just to hand that power to another foreign power? I DONT GET IT?
A threat is still a threat, even if it’s an empty one.
@AnneDon
They flagged it up two days in advance so they can get the headlines that they will not allow the currency union then when the speeches come that us much less definite language they will expect the unionist media to ignore the difference.
“Angus says:
12 February, 2014 at 12:27 pm
I didn’t think that any threat to withdraw a shared currency that has existed for over 300 years and belongs to the two partner countries that formed the union would be able to be carried out legally”
Yes it’s totally legal. Scotland would be legally entitled to reserves and assets held by the UK at the time of independence but as Scotland would have voluntarily left the union they have would no legal entitlement to use the pound. Furthermore, I am still perplexed as to why Scotland would want to. A currency union would only benefit the rest of the UK not Scotland. We’ve already seen how a currency union with divergent economies can have tragic effects, usually for the minor country or countries. If Scotland is as strong as you seem to suggest I’m sure it would thrive with it’s own currency.
There is a debate on currency union in Westminster Hall this afternoon from 2:30 for those interested (Parliament TV).
At a 1:1 exchange rate in the shops, that’s a much better rate than the 1:0.7 we get from Westminster.
I would agree with many above :
Leaked to the BBC very early (normally the night before) – suspicious.. It gives us and more importantly the SG more time to prepare answers – why do that ?
I suspect they are feeling the mood and may well backtrack tomorrow.
NB this is based on the assumption they aren’t stupid.
How is monies created? The Banks lend monies,so if monies is created through debt and the goverment always rolls over the debt how will their ever be enough monies to pay of the principal loan,their isent thats why an Independant Scotland MUST create its own monies Debt free of usary.
Is it really possible that the more important issue for Cameron and co is to consolidate power in the south east and risk the possibility of a YES vote winning, the fall-out of which would be very damaging to rUK, but somehow worth the price?
On the other-hand, maybe Osborne is sitting looking at that lickspittle excuse for a Scot Danny Alexander and thinking I can beat the crap out of him and his like anytime, that is if I can stop him rolling over to get his belly tickled and I know Carmichael’s another big feartie who’ll do whatever I ask and the whole tribe of laughable Labour types are hell-bent on doing down Scotland anyway – so what’s the problem!
Well pal, let’s put it like this – they ain’t us and yer bums oot the proverbial windae – and the money markets will tear you apart, you absolute dummy!
Seems pegging is the answer for us, where we would retain our new won rights AND we can say, enough is enough. Osborne is threatening the welfare of Scotland.We have heard all their threats and are concerned for the future of our people’s aspirations. No longer can we put up with Westminster scares.
Westminster refuses to talk in good faith while WE have tried to work together, we now know that is not reciprocated, we therefore have decided to look after our own welfare and have decided to peg a Scottish pound to Sterling along with all the implications of such. END OF!
Perhaps we need the message from WM to filter down into the markets, see how it plays and then let SG make eegits out of the lot of them.
Surprisingly good piece on currency union by MSN.
link to news.uk.msn.com
Good quotes from the Adam Smith Institute aswell:
Sam Bowman, research director at the Adam Smith Institute think-tank said: ” An independent Scotland would not need England’s permission to continue using the pound sterling, and in fact would be better off using the pound without such permission.
“There is very little that an English government would actually be able to do to stop Scottish people from continuing to use the pound sterling if they wanted to.”
He added: ” Scotland’s position would be closer to that of countries like Panama, Ecuador and El Salvador, which use the US dollar without American ‘permission’, and, according to research by the Federal Reserve of Atlanta, consequentially have far more prudent and stable financial systems than if they were part of a formal currency union.
“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.”
He concluded: ” 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.”
The Bank of England,The Biggest Ponzi Scheme in the World.
O/T
Would this not fill you with dread if you stayed in the flood ravaged South of England.
Sky News reporting that “David Cameron has just announced that he is going to take personal charge of this national disaster”
Aw Naw, We’re Definitely F****d Noo!!
Hope this comment makes it – blocked from your last post.
As someone previously said, what a pity a few years ago ( not that long ) the BoE hadn’t been named the Bank of the UK or such like, since perceptions now would be so different. Anyhow I suggest the lawyers will have the last word since I suspect we haven’t seen the last of the argument over “Successor State” given the Union agreements and as well as power over banking this affects access to EU via Article 48 or 49, veto in Europe etc.
Paul Kelly,
Quite. I think parity would be hit very rapidly which is my personal reservation to a pegging to rUKP.
At parity to the euro I think we should either peg to euro without entering ERM or launch our own currency. As parity could well be reached before Independence Day the whole pound thing would be irrelevant.
McCrone reckoned that a Scots pound would be 1.20 to 1.00 within 2 years and the rUK economy was not as disastrous then as it is now.
Yes, it would hit export sales to rUK but with the pound falling rapidly all but essentials and luxuries will be hit anyway by the ensuing poverty.
Stu,
‘and we simply can’t see him being that inept’, Really? Wow, you are so kind to him. Personally, I think my chickens have a better grasp of economics.
Reading the pages on the Guardian I would say that the Better Together people are out there. Talking mince but out there, as I said to one I thought you were in hiding, or getting a hiding. Did not wait for a reply.
AnneDon says:
Whatever Osborne is planning to say, why trail it for two days before your announcement?
Two extra days of media coverage.
If the BoE is the lender of last resort, then why did the IMF give a U$D 5 Billion loan to Westminster in the 70s?
…and there’s the possibility of two days of “it’s going to be ruled out” coverage, followed by a non-ruling-out speech. #bestofbothworlds
Hmm, interesting times.
I wonder if we’re all getting a little ahead of ourselves and this leak might be a little overhyped.
If not, the worry about the man in the street isnt the currency, show him or her a Scots pound note and an English pound note and ask “Whats worth a pound” and they will know the answer.
The key issue will be Interest Rates, how will they be decided and controlled?
@kendomacaroonbar
maybe the IMF are just really, really nice?
fairiefromtheearth at 12.44
Yes indeed. You very obviously don’t get it.
Let me try to help you.
The YES campaign wants Scotland to be independent.Then future Scottish governments can decide on behalf of the Scottish people whether they freely retain membership of the EU or freely come out of it.
The SNP (which is presently led by Alex Salmond)favours remaining in the EU on the same terms as other independent countries like France or Austria or Denmark, all of whom find pooling a little sovereignty with other friendly European independent states is, in the balance, to the advantage of their countries and their citizens.
If they decide otherwise they can freely negotiate withdrawal.
Is that simple enough?
How much per head (5 million folk)is the £150 billion we would be saving on escaping the UK debt? My calculator can’t take all these zeros! I’m guessing this is a sweetener of£30000 each. Nice!
@Caroline
But they are foreign,full of foreigners, and foreign foreigner at that and therefore not trustworthy. Pls get with the programme.
So is going to be a definite “NO” or a definite “MIBBEE” tomorrow?
A definite “NO” will be equated to an empty threat.
A definite “MIBBEE” will result in acute embarrassment.
I’d caution against assuming the Unionist campaign is stupid. People like Cameron and Osborne are clearly low intellectual horsepower, but these ciphers don’t make the bombs, they just throw them. There are propaganda experts behind them, and all they wanted was today’s Daily Mail front page: Salmond currency plan in tatters!
They’ve had their front page, and what Osbourne might or might not say tomorrow is irrelevant – there’s another Big Scare out there. Box ticked.
A very interesting comment from the ADAM SMITH Institute which shows the way to go.
link to adamsmith.org
“Furthermore, the recent problems with the Euro has proven that currency unions don’t work where the fiscal policy of the countries involved diverges” and its amazing how the “euro is a failure” mentality is so common in the UK. Can’t think why. link to archive.is
So with no by-line this Team effort ends ” The best thing for Europe would be if the euro were smashed to smithereens, allowing countries to devalue and impose capital controls. It would still be painful but at least they have the ability to boost their economies and pay down debts more slowly. The alternative is to sit and watch the flames lick higher.” Did the Euro flames stop licking?
Let me get this straight. The talk is of an unambiguous refusal to enter into a currency zone with Scotland because that would be a bad thing, yes? This would be a Scotland, which according to most unionist punditry would have ceded its sovereignty to such a fiscal union, again yes? A fiscal union which would be pretty much the same as the one we have now, where the UK exchequer and the BoE are basically running the show.
Soooooo effectively they are saying that what we have right now is a bad thing if you follow their logic. What makes our fiscal union now a good thing and a future fiscal union with an independent Scotland a bad thing considering the only change, by their own reasoning, will be decisions made outside of currency? Wouldn’t Westminster effectively have told us to feck off regardless? We’re not trustworthy, a bad risk?
And I thought Dave loved us. You don’t suppose he was being a tad insincere do you? 😉
GIDEON! Yer tea’s OOT!
Hey Rev im playing a game of Texas holdem at the weekend just to warn you the cards are rigged still want to play? no dident think so,so why do you want Scotland to play on the rigged monies markets? lets have our own Scottish pound and the exports we export who ever we export to we take vtheir monies ie the German euro the Japanees yen the American Dollar then we can have dare say as they say a breadbasket of currances unlike the English pound that has only debt backing it you could call that a bampot currencey.
If we use Sterling without a currency union and The Bank of England introduce further QE will that not just result in a devaluing of our monetary assets without the attendant upside of injecting more money into our economy?
Whereas a Scottish pound pegged 1:1 with Sterling would allow us to proportionately match any BoE QE here.
We may well end up with a situation where we print/create more money here, in line with the value of the balance of our exports, whilst maintaining the peg.
No risk of our currency hardening if pegged, but we gain/maintain the benefits of being a net exporter.
Of course there is distinct possibility I’m talking pish.
The rUK will lose North Sea oil’s contribution to the UK’s balance of payments, a serious blow
I genuinely don’t understand this part, could someone please explain?
If we are independent, and the revenue flows into Scotland’s coffers, what difference does being in or out of a currency union make?
@Kendomacaroonbar @Caroline
What a surprise…it was Labours fault! – see Recent history
link to en.wikipedia.org
“… the three main Westminster parties are to warn as pro-unionists turn up the pressure ahead of the September vote…”
“The move takes away one of the central planks of the Scottish National party’s policy platform.”
Yawn.
It’s nothing more than collaboration on the escalation of previous propaganda. Westminster politicking at its best.
On one hand, desperate to hang onto Scotland, on the other, demonstrating that Scotland is in an unequal partnership.
It doesn’t take a psychologist to spot the incongruence and seriously flawed approach.
Tom at 12.30
I have no idea what point you are trying to make.
The Euro has proved itself rock solid over Europe’s financial problems. It has improved against the pound and the dollar over the period.
You appear to be confusing economic problems in some countries with the currency that has nothing to do with the mismanagement of those countries’ economies.
Surely pegging is something not befitting of the 8th richest country in the world. It is still amazing to think that Scotland wants to keep the pound in the long term. I really do think that currency separation is best for both sides.
I listened to Iain McWhirter in Radio Scotland and he likened George Osborne’s speech tomorrow to Dirty Harry saying to his adversary, ” Come on punk, make my day!” My immediate thought on hearing this was that McWhirter had used the wrong analogy. Rather than Dirty Harry, Osborne’s intended action is more akin to the wee boy I remembered from my Glasgow childhood when playing football in the street. Whenever his team was getting beaten, he would take the huff and shout, “It’s ma ba’ and you’re no playin’!” When we got our own ball, his actions were remembered.
Osborne seems willing to cut his own economic windpipe out of spite. If it’s only their pound then it’s only their debt that goes with it. George should be told that he can keep his ba’, but don’t come near us when its bust and he needs somebody to play with.
I’ve mentioned it before, but I’m positive the “Fuck it, let’s do it!” attitude will be quite commonplace among the electorate on 18th September.
If there has been such a hoopla of noise from Better Together and their propagandists regarding Osborne’s upcoming announcement – of which they will undoubtedly have seen transcripts – then it stands to reason that he’ll say no to a currency union. So be it, then.
A pegged currency will then be the viable option, until such time as Scotland proclaims the use of its own currency of whatever name.
Meanwhile, there will be seven months for the Scottish government, and Yes Scotland, and everyone involved in wanting Scotland as an independent entity, to make the case to the electorate, while calming any fears, that this is the correct strategy for an independent Scotland to take.
The currency issue, if it is a ‘no’, plus the continual negativity, lies and general ‘Naw, yez cannae!’ aggressiveness against the hopes of so many people in Scotland by Better Together and the MSM for the next seven months right up to the day of the referendum itself, will, I’m positive, make Scottish independence even more of an inevitability.
No-one likes to be talked down to and made to feel small, especially Scots, who have, through far too many years of Westminster arrogance, perfected the art of, “If that’s yer attitude then fuck yez, then!”
“Fuck it, let’s do it!” might not make it as a campaign slogan, but enough of the electorate will have that in mind when alone in the voting booth on 18.09.14. to make ‘Yes’ a winner.
i hope many people like myself will vote yes simply as a matter of self respect. dont give a toss about currency personally.
It’s perhaps worth noting at this point that the vast bulk of the electorate doesn’t actually leave Scotland on a very regular basis, and won’t notice any difference.
– A pal of mine used to work in a clothes boutique in Carlisle, commuting every day on the inter-city from Motherwell.
Having to run a daily gauntlet of different currency zones along with SNP-armed border guards checking passports would put such cosmopolitan jet-set lifestyles in jeopardy.
Dear George,
Take your currency and your debt and shove it right up your Etonian Tory arse!
Kind Regards,
Rabb
I personally don”t care if we use shells,beads,euros, pounds,rubles or rupees.It is for certain that an independent Scotland is viable no matter what currency we use. Louise White stated on BBC last night that the pound “is what defines us”. Oh dear, what a sad person.
If anyone is feeling a wee bit tired after lunch, have a look at the Guardian’s take on this. Hundreds of comments by Unionist trolls spouting bile and hatred towards us. Sickening!
Perhaps it is John Swinney who is out bluffing Osborne. If Osborne declares no currency union then perhaps that’s what Swinney wanted all along.
Several benefits arise. He can blame a Condem Government for spiting Scots. So what’s new, eh? He can blame Westminster for denying Scots their own currency. He can then declare that the Scottish Pound will be pegged to the British pound with plenty of benefits that would not be available in a currency union. No ceding of any sovereignty comes to mind.
And lastly, he can simply walk away from all the public debt the British government said they would honour anyway.
I hope Osborne does refuse the currency union because we would be in a better negotiating position and end up with a better deal post independence.
I don’t really care what our currency is called just so long as the shopkeeper accepts it when I buy my groceries.
As for English people accepting it, well, I’ve had plenty of establishments in England refuse Scottish money and that’s when we were already part of the union.
I look forward to the day when I’m handed an English bank note in an independent Scotland so that I can hand it straight back because it’s worthless in Scotland.
Ohh, I can’t wait.
Noted today, no mention of Osborne saying anything on Daily Politics on BBC. Strange for such a big issue. Nothing about it at PMQ’s, strange for such a big issue, Osborne has to say something now, but I think he has bottled it. As he must now talk, it will be IF’s and BUT’S, a scare tactic will be there.
But no, definite NO, to a currency Union. Nevertheless, the supposed threat has been made and will not go down well with Scots, who do not like to be bullied. Another rise in YES>
@ fairiefromtheearth
Max Kiser (?) is right about Salmond he is a person who wants independance (sic) from a foreign power just to hand that power to another foreign power? I DONT GET IT?
Alex Salmond is the convener of the SNP, a Political Party that has been campaigning for Scottish independence since 1934. The SNP is Scotland’s biggest Political Party. It is not just Salmond who wants independence, all SNP members (and a greater number of non-members) want it. Salmond is merely the SNP’s figurehead and the voice of its members.
This second power you talk of is the EU, right? Westminster has already handed them power over the entire UK. You talk as if an independent Scotland would be subject to EU legislation, but somehow, at present, the UK is not.
I cant see this any other way than Alex Salmonds currency bluff has been called. The best course of action for the YES campaign and the referendum as a whole would be to abandon the pound and put plan B on the table.
Pegging or using sterling directly without Westminster approval would likely both work, since Scottish net exports would provide the foreign currency necessary, assuming exports would balance net saving by the private sector.
I still can’t get my head around why this story has been floated now. If it’s true and they thought it would help, well, scottish_skier has summed that one up.
On Robin McAlpine’s piece; the idea that the Euro crisis is over is just bizarre. The periphery is still suffering Great Depression levels of unemployment, and a number of nations are now dipping into deflation. The banks have been saved, for now, and government debt issuance is being supported by the ECB, again for now. That’s all. The people still suffer.
Dave McEwan Hill says:
12 February, 2014 at 1:21 pm
Tom at 12.30
I have no idea what point you are trying to make.
Dave it couldn’t be simpler. I agree that certain economies were mismanaged. However, the best solution for economies that get into trouble is to devalue your currency and adjust interest rates accordingly. The Euro hasn’t done badly but as it is more pegged to the German economy than the rest and doesn’t suit those economies. If you are still unclear, the point I am making is that a currency union would not be in Scotlands interests as it reduces your own ability to act should things go wrong.
I’d like to add that you may be overstating Scotland a bit here. You’ve got to remember you are less than a tenth of the UK population and produce a similar amount of the net wealth. I’m not sure there would be much difference although I can understand the self determination argument very well. That’s why I made the point about the currency union. What’s the point.
If we were to send aid to help with the flooding, would the English refuse it if it was in Scottish pounds ?
@Dal Riata
Get your Nike T-Shirts here :
link to quickmeme.com
Tell them to poke it their currency union. I was only going along with it because it steadied peoples nerves.
I don’t care anymore.
I’d like my own currency please.
Way O/T but on Open Goals, here in Aberdeen the cooncil today announced they’re buying fifty grand’s worth of Cup final tickets for the poor and taking the money from their food bank budget. This latest act Labour kindness/insanity comes from the brilliant mind and Labour finance whizz that is Aberdeen councilor Wullie Rennie, who also lost badly to the SNP at the Brig o Don by-election last summer and despite massive vote no backing too. If lose in Sept and Labour in Scotland get back into the pretendy parliament…
Also greatest golf course in the world builder Donald Trump left Aberdeen, Scatland today forever. YAY!
That should have included a link to the latest from Foster & Silver:
@R WHittington
Im sure the Scottish Media are preparing big scary “Currency Concerns being raised” headlines on the back of these whispers and sighs.
I believe canny Scots have had more than enough experience when it comes to believing whats about to come from Westminster ‘tomorrow’
Somewhere Alex Salmond is having a wee snooze with a sign next to him saying “Awaken ONLY when that mob actually do anything”
This really is Osborne heading into a poker game with a poor hand. But what choice does he have? First of all this is really the last stab, the final fearbomb left in the Unionist canon to shift opinion. I think Osborne has been forced to make this speech at this time because Carney failed to deliver it with the necessary fall out.
Another reason might be is that they’re trying to scare the Scottish government in not proceeding with a currency union because they don’t want any Scottish influence over the Bank of England when a YES vote is delivered.
The wording of the speech will be careful and unless he says ‘there will be no currency union’, then there will most likely be one. And if he says ‘no’ then the unionists have expended their final hand and the Scottish Government will have to announce plan B with firm conviction.
All the actions of the unionists from now till the referendum will be to change opinion in Scotland. Once Scotland votes YES then the rUK government will fall into line with measured and sensible negotiations, they have to, no choice.
it’s ma pound tae!
O/T but I’m sure of interest:
link to ukdefencejournal.org.uk
‘Okay, have it your way, we’ll have our own pegged currency and you can shove your debt up your arse’
UK debt becomes high risk. Read potential nuclear fallout on the bond markets. UK economy pre-2016 goes into free fall.
Apparently extreme? Respected economists are stating UK public sector debt would be unsustainable at higher interest rates and is vulnerable to shocks in the global financial system.
Questionable is whether rUK alone can securely sustain the total UK public debt and it’s liabilities. To go down the route of walking away from it’s share of the debt Scotland risks melt down for itself and rUK.
Scottish pension funds and investors hold significant UK bonds. LLoyds and RBS would become technically insolvent on a UK bond default.
Can either Salmond or Osbourne afford to upset the central bankers who really control our economies?
Salmond, an ex-banker, would start governing a new country as a pariah on the bond market.
Far better to adopt the Euro or create a Scottish currency, and pay down a share of national debt.
@dodecostanza Re the balance of payments thing. The way I understand it is that production of Oil and Gas from Scottish waters is roughly the same as the UK needs. Currently oil is traded in dollars, so the UK’s need for US dollars for O&G products is balanced – ie we sell our Oil in Dollars, and use these dollars to buy the oil that’s needed.
If Scotland is outwith a currency union, the rUK will need to buy dollars to buy oil, with a big implication for the balance of payments. Scotland of course will be the net recipient of all those Oil Dollars, making a positive contribution to our balance of payments.
Opening line from today’s lunchtime edition of Reporting Scotland:
“Chancellor rules out a formal currency union with an independent Scotland”
Followed a minute later by:
“Chancellor George Osborne is ruling out a formal currency union if there’s a Yes vote in September”.
Both statements are complete lies. The truth is that there is speculation that the chancellor will state this tomorrow.
I have never complained to the BBC before but this is the last straw. Think I’ll put the number on speed dial too as I’m likely to need it again soon….
I thought it was common knowledge that the British Government now use the news media to make major public announcements rather than the proper place which is to address it to political representatives in the Houses of Parliament Westminster, the seat of British liberal democracy.
After all, Westminster is now just a neoliberal hot air machine and of little importance when it comes to government policy or democratic decision making. What its representatives think about anything is as next to irrelevance and redundancy as its possible to get.
As far as government news is concerned, the DWP regularly trail announcements in the news media in order to see how it plays out so it can use the feedback to alter the eventual press release and announcements in Parliament a few days later to best advantage.
If Scotland runs at a profit (and from what I’ve read, it does), is there any reason that we need to borrow on Independance?
It will be interesting to see the NO campaign trying to make a case against a pegged pound, when it is clear that only an iScotland will derive any benefit in such a situation.
I think SG will stick with the argument for a currency union and will remain relaxed that others are debating and fleshing out other options. A similar position to Devo-Max.
George Osborne has the much harder task in finding credible arguments against a currency union that offset the mutual benefits. It he can’t this exercise will be seen as an empty threat, or worst still if he uses weasel words then he has further damaged the NO campaign.
Big business already conducts trade in foreign currencies. Oil is priced and traded in dollars and much of the whisky trade to the US is priced and traded in Dollars, while EU trade it’s conducted in Euros. For big business’s it’s actually an advantage and provides them with the stability of a cushion against currency fluctuations
The only down side I can see to pegging a Scottish pound to GBP would be that Soros type currency speculators could exploit the inherent weakness of the GBP and the Scottish pound would be dragged down with it. And the GBP will be seen as weak, make no mistake; not only will it have lost big foreign currency earners like oil and whisky, it will, having lost 10% of GDP have a resultant GDP to Debt ratio that will be the worst of all the developed western economies.
It’s a bluff and nothing more than an attempt to finesse a “planB” from the Scottish Government and to muddy the waters by making that the focus of media speculation and punditry.
Best response to the UK Government threat ( if it actually emerges…I’m still waiting to hear what Osborne says) would be to establish a separate scottish currency and peg it to a basket of currencies. From that position we can, if we want, renegotiate entry into a new Sterling zone…and we could do it on our terms, and of course only if they’re nice to us
Joes Kane – I know what you mean. What someone described as “kite flying”.
If there is something highly contentious, get it out “unofficially” and see what the reaction is. Amend accordingly (making wholescale changes if the reaction is really negative) and then put out the “real thing”
Also has the effect of drawing your opponents fire and seeing how well stacked their arguments actually are.
Cynical I’d call it.
I think given Darling’s comments today there is little doubt that all three parties intend to clearly and unequivocally rule out a currency union. He has undoubtedly been briefed or he would not be so adamant in his view. As always however it will be the wording that is crucial.
A few people have said that this wouldn’t be binding anyway, this is technically correct. Parliament and Her Majesty’s government cannot bind itself, it can always change its mind later. However, given the bulk of negotiating will have been done by the time of the 2015 election it seems unlikely in the extreme that Osborne’s position will change. I can’t imagine it will. If they say no currency union I’d take them at their word, we can do nothing else. Whether such a pre-emptive move proves to be politically expedient remains to be seen, but I’d expect major financial institutions speaking up more on this issue, and companies which operate on a UK wide basis are clearly now going to have to take a position given that this area of uncertainty has been cleared up (or a known unknown replaced with an unknown known if one wants to be a little mischevious). The impact on this for rUK will now be actively discussed as it becomes a reality and not a pure hypothetical. We will soon know with the reaction from key economic stakeholders whether Osborne’s view that such a union would not be in rUK’s interests is one shared by the economic and political community as a whole. It will certainly sit well with middle England who regard the Bank of England as theirs, and the pound as theirs.
Incidentally this argument that you can’t have independence and still have shared points of contact, or to put it as it is often put you can’t keep all the goodies and still be independent is really starting to annoy me. It is an intellectually deficient position to take, showing a bewildering lack of historical awareness. If you follow it through we wouldn’t have the union either, because it isn’t a real union is it? How can you have a real union when Scotland has its own church, legal system, education system, local government structure etc.? People are incredibly misinformed these days about the nature of political unions, our forebears in the seventeenth and eighteenth century had a far more sophisticated understanding than is currently prevalent. The “union” was never complete, it was a compromise, why should “independence” be really any different? We are an island nation for heavens sake, it just might be that it makes sense to co-operate on certain things…
Business for Scotland quote Ed Balls as saying if he is rUK Chancellor in May 2015 he will ensure there is an equable and fiscally responsible currency union in discussions with the Scottish Government.
The City of London via the FT has basically said ‘currency union’ or else.
The big UK banks are shifting backroom functions to Scotland, the latest being Barclays and non EU overseas banks are looking at Scotland for EU HQ’s.
The banks seem to be setting themselves up to ensure a win/win whether Sterling stays or goes in Scotland. They are also looking to the future when London is potentially outside the EU.
I would suggest the City of London needs the currency union to maintain its global position rather than being trapped with a devaluing currency and an unsustainable rUK Government debt requiring IMF assistance if not a bail out.
Basically Osbourne is enaging in the political equivalent of Custer’s Last Stand
Oh wait a minute…
Does this mean The Rev has to apologise to Blair MacDougall for the BT GOODBYE leaflet being seen as lies?
Methinks a big boob by George Osbourne. So if (OIL-RICH) Scotland is excluded from the Pound, what will he say when the markets take fright and move out of sterling?
Does anyone know what arrangements Isle of Man, Channel Islands, Gibraltar, Falkland Islands, etc. have to enable them to use Sterling? Do they have formal currency unions in place, an informal agreement or do they just use the pound anyway?
watch out for the weasel words ‘I can see no circumstances in which…’. If he says this then you may safely disregard every word that follows
Watch for the timing of Osbornes speech tomorrow
I think it will be around mid-day at the same time as FMQ’s
Any thoughts on that?
‘Salmond, an ex-banker, would start governing a new country as a pariah on the bond market’
Meant to write ‘a newly independent country’, no offence intended..
I never understood the obsession with the pound anyway. Ok the Euro has its flaws but it’d mean an independent Scotland would be far more likely to be accepted into the EU if we adopted it from the start. We should forget the Pound and go back to the Euro plan. Whilst we’re at it different plug sockets would be nice too. I’m bored of the three pin ones.
The BBC have updated their article and headline. Originally: “George Osborne is likely to rule out”. Now: “George Osborne will rule out”.
link to newssniffer.co.uk
R whittington
I cant see this any other way than Alex Salmonds currency bluff has been called.
You are not very perceptive then.
What this whole episode brings into sharp focus is Scotland’s real position in the Union. The MSM/Unionists are always telling us that we are an equal and integral part of the Union. However, it must by now be apparent to many people in Scotland that we are viewed as a mere possession of the British state. The pretence is gone and surely for good. If we show any backbone at all, we immediately see the fury of the British establishment against our nation. Posters on the Guardian’s Cif are directing a massive amount of bile and venom at our audacity to challenge the British political elite. They genuinely appear to believe as if it is the British state that holds all the aces. The contempt they have for Scottish self determination is mind-boggling.
As regards assets, we get to keep Dr Who, ‘cos he’s Scottish.
Wow, the Adam smith institute agrees with me:
link to wingsoverscotland.com
dodecostanza,
Uk has a trade deficit of around 50Bn.
with a currency union Scotland and rUK’s trade figures stay combined for the purpose of sterling evaluation.
Scotland is a net exporter and would remain so. rUK would lose 30Bn of oil from making the deficit around 80Bn also there oil needs would all become imports, say another 20Bn. making a trade deficit of around 100Bn. In addition stuff like electricity (about 11% of rUK’s elctricity comes from Scotland that would become an import whereas at present it is neutral. Similarly with with whisky, water, seed potatoes and all the other stuff that they buy from us.
The effect that the overnight doubling of the trade deficit would have on the pound is enormous.
The question asked to which the answer was currency union was – ‘what is the best solution for both Scotland AND the rUK?’ The advantages for us are short term stability and familiarity. For rUK it could prevent a large devaluation of the pound with serious effects on their credit rating.
Hope that helps.
So,Scotland votes Yes,we gain 90-95% oil revenue,we have healthy exports,pretty good diverse economy,we decimate cumbersome tax laws and we turn to the World and request a lump sum of dosh to back up our own currency. For the life of me I don’t see the problem! If Westminster carries on spending and raising its debt levels,Scotland would be a more attractive and safe place for lending. Interest rate rise is on the cards next year,Carney has already said. UK can’t pay off what it has now,it has no chance when rates go up. As for the earler comments regarding credit ( proven track record if we ‘default’ ) with the 1.5 Trillion minimum of oil reserves there isn’t a financial institution that wouldn’t be happy to scramble to a nation of a mere 5 million or so!
“I don’t really care what our currency is called just so long as the shopkeeper accepts it when I buy my groceries.”
Which is the attitude of the average voter and why currency comes so far down the list of people’s referendum priorities.
However, having London say ‘You can’t use your Scottish £ if you vote Yes’ – which is what the average voter will take from today – is something that will cause them to be unhappy with the UK Government.
@velofello at 12:43.
The McCrone report 40 years ago is still relevant now:
“It must be concluded therefore that large revenues and balance of payments gains would indeed accrue to a Scottish Government in the event of independence provided that steps were taken either by carried interest or by taxation to secure the Government ‘take’. Undoubtedly this would banish any anxieties the Government might have had about its budgetary position or its balance of payments. The country would tend to be in chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe, with the exception perhaps of the Norwegian kroner. Just as deposed monarchs and African leaders have in the past used the Swiss franc as a haven of security, so now would the Scottish pound be seen as a good hedge against inflation and devaluation and the Scottish banks could expect to find themselves inundated with a speculative inflow of foreign funds.”
Page 8 Para 1.
@fairiefromtheearth
“Max Kiser is right about Salmond he is a person who wants independance from a foreign power just to hand that power to another foreign power? I DONT GET IT?”
Because 95% of something (currency union with slightly constrained fiscal policy) is better than 100% of nothing (situation now – zero influence on fiscal policy or currency).
The SNPs polices would be getting hammered right now if it was the torys saying the same thing, its very confusing that we want power just to hand it over to the EU,is this not our chance to make a better Scotland and be a shining light to the rest of the World,no more fiat currency no more puppet masters directing the destony of a Free Scotland.
“its very confusing that we want power just to hand it over to the EU”
We’re ALREADY IN THE FUCKING EU.
If I hear one more person spout this idiot UKIP pish I’m going on a murder rampage.
yea and i canne spell thanl Thatcher for that education.
@G H.
“I look forward to the day when I’m handed an English bank note in an independent Scotland so that I can hand it straight back because it’s worthless in Scotland.”
I think “worth less” may be more appropriate here.
I’d take it off them, but only at 50% of its face value.
🙂
Well they know they can’t “lovebomb” us and the Tories have nothing to lose in Scotland, so they can hit us with as big a stick as they want, it means nothing to them. And if they can convince Labour to join in the beating, well all the better for them come the general election, as I’m sure it’ll knock a few numbers off the Labour vote up here.
When you are skint,it doesn’t matter much what is used,however our own Scottish currency is an attractive idea,maybe the pound sterling could be pegged to a Scots pound stirling 🙂
Does anyone have odds on Carney staying around whilst Osbourne et al deliberately crash the pound on his watch?
I’m not sure that begging the IMF for bailouts is quite his thing.
On the other hand, maybe launching a new currency in a resource rich wee country might quite appeal to him. Although he would have to take a pay cut.
@R whittington
We’re playing poker this friday evening, would you like to come along, and bring £2000 stake money.
After all the MSM furore today, if tomorrow’s statement turns out to be yet another feigned attack, another big fat bluff, then Osborne, Darling and the rest of the BT mob are going to look really silly.
What a kerfuffle. I don’t know what it’s going to be like when they start marching “their” soldiers along Hadrians wall (cos they think that’s the border).
What will the Northumbrians think?
You took the words right out of my mouth Rev, when you said the Scottish Government SHOULD call, the Westminster Governments bluff, with regards to the use of the Sterling currency.
I think the Scottish Government don’t wan to panic the horses so to speak, with regards to voter, but there is much to be gained from striking out with our own pound, if Westminster refuse to play ball. We could save billion by not servicing Westminster’s carelessly acquired mass debt.
On the other hand, trade with the rest of the UK could be a stumbling block, with regards to currency, and a lender of last resort would need to be sought, but to see the look on Osborne et al faces if we called their bluff would be utterly priceless.
Just to let everybody know i was in the first gulf war,Ten years later i found out the nurse that went to the UN and cryed that Iraqi soildiers had flung the babys out of the incubators to steal the incubators,was she a nurse NO she was the Kuwati Ambassadors(to the UN or America) daughter and of course we all know now America had given Saddam the green light to invade Kuwait buy hey why worry about the TRUTH,thats why i look at EVERY angle concerning a story now,and the FIRST thing you have to ask WHO DOSE IT BENEFIT.
How will it benefit Scotland giving Billions to the EU and getting 70% of it back? is that not what the SNP is saying the Westminster Goverment is doing right now? How will it benefit the people of Scotland if the Goverment borrows of international markets(Rothchild fiat system)? when we have the right as a souvering state to CREATE our own monies DEBT free.
Stu,
I’ll join you,
Together with the ‘forced’ to join the euro pish,
What’s the point in getting independence and then handing it straight over to the EU anyway?
Sterling and the ‘trust’ placed in it by the public is an asset that Scotland already partly owns.
It seems like a massive value could be placed on this – and make it entirely fair and reasonable to disown a huge amount of debt, by way of compensation.
@G H Graham at 1:29:
After a night to sleep on this so called announcement, I think you could be spot on about this. Another don’t give them what they want trap.
I thought I had posted this link but it seems to have vanished? Are posts still being held back
O/T
link to ukdefencejournal.org.uk
The pressure is all on George Osborne to produce the speech of his life tomorrow.
The slightest failure to convince, be it the wrong choice of phrase, word, wrong emphasis, or poor delivery and he will be accused of behaving like the Grand Old Duke of York.
The whole world is watching you George, so no pressure.
I somewhat agree that the worst thing the Yes side could do at this point is to go on accusing Westminster of bluffing on the currency union question. However giving up on the currency union still raises some genuine problems.
The idea that Westminster will accept a currency union has been part of the rhetoric for a sizeable period of time now. Accepting that was incorrect (and I’m not even sure it is incorrect as it happens) is a problem at least in the short-term. It will be in the interests of the Yes campaign in the long term, but right now it’s at best somewhat embarrassing to have to backtrack from it.
There are also other problems with the idea of endorsing an independent currency. The Fiscal Commission Working Group rejected an independent currency in its review and opted for the currency union. So we also have to accept that the best option for Scotland (as determined by the Yes side and the independent economists on the Fiscal Commission Working Group) isn’t going to happen. In other words, the model of independence we have to adopt is, by the Yes side’s own standards, qualitatively worse than the model we were arguing for before.
Then we have various technical issues that will no doubt be emphasised as well: e.g. the (fairly sound) argument that we’ll have to pay a premium in the bond markets in the short-term, the potential problems with pegging the currency to Sterling (i.e. you need to have substantial reserves which could cause inflation, we’ll be tying ourselves to a divergent economy that has no reason to take our interests on board, and so on). Some of those arguments are wide of the mark but they will be made and they will convince some people that there’s no real advantage to an independent currency over what we have now.
Labour MPs backing Osborne against Scotland on live now
Currency Union debate at Westminster on democracy live.
link to bbc.co.uk
Tom
And you (and some others)still don’t get the point that independence leaves us free to be in it or chose to be out of it.
That’s the point.
And another point. No particular currency or no currency union can insure anybody totally against the effects of economic mismanagement or stupid decisions and policies (like those which have assailed the UK).
In what way will England not want to trade with us oil no thanks,electric we dont need it,and you can stick your fine food up your kilts aye right just dont see it happening THEY NEED US MORE THAN WE NEED THEM and another good thing about telling the EU to fuck off is we get our fishing waters back more jobs for the clyde as we will need a coast guard and navy to protect our resorces.
Make genuine plans for a Scots currency and the game is up the ‘ye canny dae it’ mob.
* for
In the last quarter of 2013, the UK reported its largest current account deficit in 20 years. Without oil, gas and whisky, it would double – the markets know this and the pound will collapse in a morning..surely someone is bound to have a wee word in George’s ear sometime today, or else he’l be out of a job come tomorrow.
This whole currency issue is complete cobblers, there are currency unions everywhere, both formal and informal – look at France – it uses the Euro but is the lender of last resort for 2 currency unions spanning 14 nations in AFRICA! – who’s currencies are pegged to the Euro.
Then you have the Swiss who went from a free floating currency to pegging the franc to the Euro a few years ago to protect its exports to the Eurozone. When it comes to currencies, countries do whatever suits their own requirements and if it no longer works anymore then you change it – it really isn’t an issue…
@Fairie I don’t really get the Eurosceptic stuff. Norway has control over its fishing waters but it also has to adopt the vast majority of EU legislation without any say over what that legislation is. The single market is too valuable to our economy to ignore (far more valuable than our fishing rights – which we’d be able to negotiate more effectively as an independent EU state in any case rather than as part of the UK).
Since the BBC seem to intimately know the contents of this unread speech it gives me reason to question who wrote it for Osborne to read. Who is calling the shots here, I thought the BBC and the like are here to report news, not construct it.
Am glad I don’t contribute towards the BBC’s British Biased Crap & I have been fee free for over 3 years now 🙂
You would have thought that given the BBC’s funding method (enforced tax) that there would be rules or editorial guidelines that they are supposed to follow regarding bias but they obviously pay no attention to them whatsoever.
link to bbc.co.uk
In my opinion all self respecting Scots should refuse to fund this rabidly anti-Scottish organisation… the bonus for me being that so far my non-payment has led to a saving of £435 🙂 no harm in saving some money too 🙂
i cant understand all the shite that comes out of peoples mouths.It gets me that unemployed people and people on the sick are the scapegoats of sociaty but one of the big problems with Independance is the 250,000 jobs that it creates a big fucking problem for thouse that like to kick the unemployed when their down.I think its called divide and conqure and if they come out with this shit about no currencey union thats what they are trying to do.But we must be strong and show people that we dont need the International Banksters no more fraud and no more getting away with fraud lets be like Iceland and jail the Banksters and stick two fingers up to their frauid debt. ps Fuck you mi6
Billwalters why dont you put you wages in my bank account and i will give you monies back when i would like too.
Seven months out, and we’ve broken the No Campaign/Westminster’s resolve not to pre-negotiate. I wonder what other issues we can get them to call out definitively on – Trident, defence assets, EU membership, energy market?
Has this Osbourne crap been reported on EBC news channel or is it just being beamed into us thick, stupid jocks in Scotlandshire? Maybe they don’t want the rest of the world to know the shit they are spreading! WE ARE SPECIAL!
Just try and watch last nights Scotland doesn’t exist laugh along from Pacific Quay last night. link to bbc.co.uk
Its being broadcast 3 or 4 times across the “region” this week and always online. So tell them we luv them and they’ll have no money, they don’t exist as an actual country anyway, everyday from now until way after Sept 19th and its all over. This is the power and might of England at stake here and they are not going to let go of so much of what they know they own.
I still don’t get the actual importance of this outside of it’s scare value.
If I and my employer agree that I should be paid in whatever, be it Stirling or rubber erasers and wherever I do my shopping also agrees to accept them, where’s the problem?
Bill Walters at 2.49
None of that makes any sense to the vast majority of the population. There are just as many registering this latest London stuff as a malicious attack on Scotland
@fairie I presume that’s supposed to be an argument about the EU budget – which, incidentally, Norway also pays into. Leaving the EU on account of the budget contributions makes no sense whatsoever – the only people who make that argument are UKIP.
It was interesting watching a bit of the Committee on currency union and he braying donkeys around the speaker.
The most obvious loud guffawing and agreement among the Labour MPs.
What was most illuminating was to hear a Labour MP talk about the interests and protection of the people of Scotland when they have been overwhelmingly in charge of Scotland for 50 years and Glasgow has 6 out of 10 of the most deprived areas in the UK.
Glasgow a Labour stronghold, and home to the largest payouts for ex Council members in the country.
These committee meeting showed be in the school studies for 16-17 year olds.
@A2 the real problem is the vote no UKOK propaganda ramping up the daily with you’ll have no money, no pension, your savings will be worthless, no dole and so on. Labour’s Jackie Baillie was interesting on last nights newsnight Scotland. Asked specifically what Labour currency policy is, she simply parrots out the greatest threat of no money ever and its all down to Alex Salmond and “people are afraid”. Baillie may well have been reading a BBC Scotland news autocue though.
I am just listening to the currency “debate” in Westminster Hall and have to say it as much bollocks as was the programme on BBC2 Scotland last night at 9:00pm
Anas Arswar is talking out his Ars as usual.
If we all think back to when Mark Carney came to Scotland and met up with Alex Salmond , the media and project fear were all over the story telling us that Mr Carney was coming to tell Alex that there would be no currency union .
we all know what happened to that one .
I am now going to kick the ball out of the park and ask what happens if Gideon actually states that in the event of Scotland voting for independence the r.u.k will enter into a currency union , stranger things have happened .
it would certainly leave the b.b.c , Alistair Darling and project fear with a lot of egg on their faces .
I know I am swimming against the tide on this one .
Now its becoming absolutely assinine in Westminster Hall.
Adding to my post about the committee meeting on the currency union. Perhaps I should have said, it should be in school studies for 16-17 year olds, and shown to women around the country. Hearing the guffawing and the braying donkeys in that meeting, do you recognise that kind of behaviour and do you think it is OK?
These are the MPs who are supposed to represent our interests in Scotland.
I watched some of the debate from westminster hall, well enough to see some Labour chap whose name has been erased from my memory by the pure scorn of indignation harking on about how Scottish business would have to pay transaction costs etc., and how this was such a dire thing, blah blah, and clearly you would need to be committed to your own destruction to favour independence and such a scenario in light of the no to a currency union. The monumental moron was simply too dim to perceive that this works the other way, all the English businesses won’t want that either, which is precisely why a currency union should make sense. But what really annoyed me as someone who once voted Labourr, and would like to see the party return to its core traditions and beliefs, was the overwhelming atmosphere of love-in with their Tory cronies. They might disagree on everything else but when it comes to the Scots, they have to be kept under the boot. Adherence to unionism the central tenet, nothing else matters. Scotland could be the richest country in the world in the event of independence, according to an overwhelming preponderance of economic date, and Labour people would still be adamant, that oh no chaps we are better together. It doesn’t matter how bad things get within the UK, better to die together than prosper apart.
The only thing that ires me more than the queen of frippery Johann Lamont, is Westminster Labour MP’s.
Never had so much fun in a long time. There are so many theories and points made in the posts, nearly all of which make me more optimistic than ever about a Yes vote.
On top of that I’m more than ever convinced about the utter incompetence of Westminster in this whole affair and can hardly believe how cackhanded they have been in their attempted use of “Darien Scheme” politics. Even if this is a leak to test reaction and may be watered down or withdrawn, there is now no going back due to the prominence accorded the garbage by the MSM.
And what on earth is Dave the Brave doing by saying that he will find “as much money as it takes” to turn back the tide in the flooded areas of England? Where’s the money coming from, Dave? Oil on troubled waters, perhaps?
cearc says:
Dear Sir, there is an awful lot more than you suggest. On top of oil there is all our there “contributions ” our taxes, from which they draw profit, our airline tax, the Crown estate, all the export things from Scotland that go through English ports are added to UK GDP.( classed through the leaving port!) There is much more.
So the negative for rUK is much more serious as you suggest.
heedtracker,
Can Jackie Baillie read?
Some businesses who already deal with Europe on a regular basis simply operate Euro accounts. Some will operate Dollar accounts. It means opening a separate account and buying and selling in Euros or Dollars without any need to convert currency, except when money needs to be moved from the account. It is a principle which would work equally well if Scotland ended up with a different currency from the rUK. No one could be forced to convert existing accounts from Sterling to a Scottish currency, they could continue to operate in Sterling if that was what was most suited to their business, and convert into Scottish currency as and when required. It is a nonsense to suppose that every single transaction involving international trade can only be done through a currency conversion. There is no need to fear a Scottish currency.
Bugger (the Panda) says:
Can a parrot read??
I watched the Spanish cival war last nite 4hrs 20min and ive descovered im an anarchist,it was the only group that looked after the people and as always their leaders sold them out and the commies back stabbed them.
Sajid Javid, the Financial Secretary to the Treasury has used the phrase “highly unlikely” not once but twice in reference to a currency union in the Westminster Hall debate.
That is not we are being told that the Chancellor will say.
A Norwegian Blue?
@Gillie
Perhaps its all a “Rollo Tomasi” ruse to catch out someone leaking on the Better Together inside. An enemy within.
Wont be Danny Alexander..by all accounts hes turning more Tory each day hanging around with his Blue-blooded Treasury chums.
Les,
Yes, I know and not least the elephant in the room which is the way corporate taxes are attributed.
I was trying to keep it simple for dodecostanza who had asked,
‘
The rUK will lose North Sea oil’s contribution to the UK’s balance of payments, a serious blow
I genuinely don’t understand this part, could someone please explain?
If we are independent, and the revenue flows into Scotland’s coffers, what difference does being in or out of a currency union make?’
He/She had also asked on an earlier thread this morning. So it was just quickie on the principal without looking up the numbers.
Thank you George Osborne and partners. I an now even more convinced that we will win the referendum. 🙂
I kinda got the currency union thingy, at least in the short term but have always thought our own independent currency would be the best for Scotland in the long term. With Ozzy now, apparently, denying us the option of a short term currency union we can dispense with this idea totally and move straight on to our own currency. 🙂
I am not a great fan of using the Euro but for those who are perhaps this may help explain why an independent Scotland could not start using the Euro from day one of independence.
The point to note specifically, with regards to use of the Euro from day one is point 4 of the Criteria, we’d have needed to have been in the Exchange rate mechanism (ERM) for at least 2 consecutive years.
link to en.wikipedia.org
I have suggested in the past that I did not think that Cameron was really that bothered about whether we stayed or left the union, basically because I thought he could see us leaving as an open goal for the Tories to rule rUK for decades. Nothing he has done or said since I first suggested this has changed my view on this. Now that Ozzy is reported to be saying, tomorrow, that a currency union will not happen I am even more convinced that the Tories are looking at Scottish independence as their get out of jail free card. Kick Scotland out of the union and Labour instantly lose around 40 M.P.’s ostensibly starting any future General Election from a position of -40 seats!
Throughout the whole campaign, so far, I have held the belief that Alex Salmond and the YES campaign have been playing their cards close to their chests. Running the independence over 18 months has, in my view, been a blinder. The whole ‘debate’ has been turned into a game of seeing who blinks first. So far the score is:
A.S./YES 2
B.T./W.M 0
As things stand now, I believe it can only continue to get progressively worse for Better Together. The snowball has already started rolling down the snow covered mountainside and it is growing day after day, it is now unstoppable and it will eventually smash into the wee rickety shack that is B.T. H.Q. lying at the bottom of the mountain. 🙂
OH and i dont want to fish our waters or let anyone else fish them, i want our fishing grounds to be left alone for some time, to reserch the effect the gulf of Mexico oil spill and all the other toxins that have been dumped into the oceans have had on the wildlife.how many YEARS ago was that Fukeshema nuclear plant blow up WHEN are they going to sort it out? still SPEWING out tons of radioactive shite,hey everythings ok go back to sleep.its time for people to WAKE UP and start to ASK QUESTIONS and DEMAND answers that FIT the question.
@A2
The importance is in the question of who controls the currency that a nation state uses, and the constraints that exist when control lies outside that nation.
The UK as a whole runs an external deficit, and has for decades. That deficit, combined with private sector net saving, is financed by government deficits, which have also existed for decades. It all works* because the UK has its own currency; it can run gov deficits indefinitely.
People have said that the rUK will face ruin and ‘the markets’ would throw a fit if Scotland doesn’t enter a currency union, since it would lose oil support for sterling. Well, the media are reporting that there will be no currency union, but neither the stock market nor fx trading in sterling have reacted adversely — in fact, having a quick look, sterling jumped up a little against major currencies since this news came out. A larger external deficit may well lower the value of rUK sterling, but it wouldn’t crash, and a lower currency value helps exports anyway.
It is a currency union that would ruin the rUK economy, as the government, operating under fiscal rules, would be unable to finance the external deficit, with or without Scottish exports. It would be in the same position as Greece, Spain, Portugal etc. in the Euro zone, and Westminster must recognise this. They have to refuse a currency union.
Scotland could deal with a currency union, or a peg, as it would have an external surplus thanks largely to oil** exports. More accurately, Scotland would be okay as long as its external surplus was sufficient to finance private net saving. From what I’ve seen of the numbers it would be.
* The UK has problems of corruption, inequality and so on, but those are separate issues to the currency.
** There’s the issue of climate change and whether the oil should be left where it is, but that just means a more rapid switch from a peg to a floating currency. It’s much easier to switch from a peg to floating than to switch to a whole new floating currency in one step, from a psychological perspective if nothing else.
Here’s George Osborne, trying to lecture Scots over the pound.
link to youtu.be
In fact, I suppose UK government fears about how markets would respond if they though the rUK would enter a currency union might go some way to explaining why there’s an announcement this early. Assuming it’s all real of course.
sterling jumped up because Carney redefined when he would put up interest rates and suggested it wouldn’t happen until spring 2015, according to the BBC anyway.
link to bbc.co.uk
@ Bugger (the Panda), Can Jackie Baillie read? I like watching Ms Baillie as she is such a ham actor but she sticks right to the party line word for word. Unlike the bizarre Johann Lamont who is clearly itching to go off script and orate, so she does and pop, look what happens. Baillie could get a start on River Shitty or whatever they call it.
Coverage in the Guardian: link to archive.is (“UK parties ‘ganging up’ to bully Scots into rejecting independence, says SNP”)
This is, as Iain Macwhirter stated today, economic warfare. Reminds me of a certain scene from a certain film:
“But your majesty–won’t our archers kill our own men?”
“Yes–but we’ll kill theirs as well.”
@Caroline Corfield
Right; so markets are more interested in possible future interest rate movements than in the lack of a currency union. No market conniptions over something it is claimed terrifies them.
A Plan B alternative to currency union wasn’t published as it would make the financial markets even more jittery than they usually are.
However, I would be absolutely stunned if there wasn’t a Plan B sitting and ready to publish.
Probably in a sealed envelope in Swinney’s drawer similar to how Alex Cameron used to claim in his sports column…
I will believe there will be no currency union when George Osborne says quite clearly, that there will be no currency union. All the rest is pure spin.
However, what this does indicate is the truly astonishing petulant attitude of those who inhabit westminster towards the notion of Scotland taking control of its own affairs. Westminster, the parliament which trumpets the rights to self determination around the world, behaves like a spoilt wean when confronted with such a reality on its own doorstep. Suddenly the ‘mother of parliaments’ doesn’t like self determination at all. let freedom ring? nah, not in Westmidden.
It is a mark of the true ineptitude of the current London Government, that given current circumstances, rather than respond like adult partners in this old union, they behave with what can only ever be described as spite. It is childish on every level.
The uncertainty regarding EU transition for Scotland COULD be resolved at a stroke by Downing Street merely formally asking the EU (an option NOT available to Holyrood). but instead, London ministers would rather run around the TV studios like a real life ‘chicken licken’ announcing the sky is falling down. Likewise, with the currency, George Osborne and his gofer Tory convert Danny Alexander, like to run around screaming disaster! all the while knowing it is nothing of the kind.
On a global stage, these people are self important clowns, devoid of any cognition of their own stupidity and irrelevance. In Scotland they are seen as what they are, bare faced London Tory liars, with not a sensible adult brain cell between them.
This is why we need out of this undemocratic political union, so we can escape the lunacy, mendacity and lies of those who inhabit Westminster. It’s why more and more people are choosing to vote YES.
I have read over some of the contributions here and on the Herald and have resisted making snap judgements because for one thing Osborne has said nothing yet after all. However IF what is being trailed is actually what happens—that he along with the other Unionist parties will co-ordinate statements to the effect that a Fiscal Pact is off the table there are some interesting conclusions which can be drawn from this.
The SNP has got two choices
1. To do what Nicola is suggesting tonight on STV news and dismiss the whole thing as campaign posturing to conceal the reality of the rUK ‘s need and Scotland’s preference for a Fiscal Pact. A naked attempt to smoke out Plan B so that it can be derided. That somehow Westminster will discover reason and balance after a YES vote with a Fiscal Pact being then placed instantly on the negotiating table.
Maintaining this line does make us reasonable and cool and casts Westminster in the role of self-harmers – BUT
( The problem with this strategy is that it will not sell on the doorsteps and nor will it sell in the Holyrood chamber tomorrow because we all know what Jimmy Kranckie will lead on at FMQ. I am not saying that Salmond needs to give the game away with a detailed Plan B but it is crazy to lead with Nicola’s response )
2. Salmond must have known that this possibility existed and must have a ready made Plan B in the bottom drawer of his study in Bute House. He should embrace Westminster’s refusal of a Fiscal Pact and not pretend that they do not mean it. Take the F.P. option off the table and burn it—it’s gone forget it and build consensus around our own Pound pegged to Sterling until we join the Euro. Call their bluff .
( the campaign advantages here are no debt and control over our own economy. Westminster will have chosen a bitter divorce, where it did not need to and the asset divide after YES will be brief and acrimonious Sure the Brit Nats will say you do not have a lender of last resort—we buy currency for a lot less than the debt repayments – and abandon the rUK economy to it’s fate because it will have been the one they have chosen for themselves )
@Burgandy
The third option is not to panic.
We knew it would get dirty the closer we got to Referendum. We knew Westminster would let Scotland know who is boss and intends to stay boss.
There is worse to come.
What is remarkable in this encounter is how Scottish Labour – self-styled “champions of Scotland” – has shown its true colours by rushing to side of the Tories and Ukip to back Westminster and against greater democratic powers.
Don’t think for a moment that sour affiliation has past the notice of the man in the street.
I wonder if Osborne’s forthcoming “No currency union” announcement( if it actually arrives in so many words) is really aimed not at voters in Scotland, but at voters in England.
The Tories know full well that whatever they say or do is going to go down like a lead balloon in Scotland, but their words and action do count in England. Their thinking surely must be that talking tough against Scotland will play very well in Middle England, and it also forces Labour to play catch-up as well, which once again reinforces the growing feeling that it is the Tories who are in complete control of the agenda(in England at any rate). They also have to appear tough to counter the growing threat of UKIP, who must surely be considering re-branding themselves as the England Independence Party in the event of YES in Scotland.
Osborne and co are also signalling that they will take no hostages in any future negotiations with Scotland in the event of independence- and that mindset could prove very popular in the General Election in 2015,when it is more than likely that a lot of vitriol will be aimed at Scotland. Having started this process, voters will surely be persuaded that the Tories are best placed to strike the best deal for rUK.
As far as Scotland is concerned, any such statement would rightly be seen as arrogant bullying, and be counter-productive. But as far as England is concerned, such a statement will be met with a sneaking sense of admiration and regard( you only have to look at the Guardian’s CiF today to see how what these right-on liberal readers really think about Scottish democracy!)
As far as Wales is concerned- we say Pob lwc i’r Alban!( Best wishes to Scotland!). You are trail-blazers for the type of change that everybody knows is well over due on all these isles. Nationalists here know that the case for Wales will be immensely strengthened( confidence wise), if Scotland votes YES in September.
And as far as the economics are concerned, surely the emergence of Plan B( Pegging the Scottish pound to Sterling on a 1:1 basis) without a formal currency union can only be a vote-winner for YES. It will give Scotland more flexibility, and ensure that it is not beholden to the Bank of England’s monetary policies.
@ Cymru Rydd
You might be on to something there.
Storms and floods show how easily Mother Nature can wreck Westminster’s economic plans more thoroughly than any terrorist attack or calls for greater democracy in Scotland.
With politicians trying to outdo each other as to which party is offering the most to flood victims and rescue projects, telling Scotland publically it can’t borrow from the Bank of Merry England is probably aimed at English in wellies in case they think Scotland is squandering its money.
Spending billions on the Olympics, trillions on aircarft carries and jet planes, and nothing on protective barriers against flooding don’t count.
@Cymru Redd: Their thinking surely must be that talking tough against Scotland will play very well in Middle England
Which is, of course, exactly what they shouldn’t do – historically, talking tough to Scotland is likely to have the opposite effect intended. Why else did they have to hide the projected oil revenue, the sea territory grab, and who knows how many other things? Because if they openly stated it, they know that Scotland wouldn’t be cowed, Scotland would be angry.
Talking tough to Scotland’s bad enough, but talking tough to Alex Salmond is doomed to failure. Even Salmond’s most ferocious critics (at least the ones worth a damn) must admit that he’s a formidable figure who you can’t take lightly, and even Unionist commentators know he’d make absolute mincemeat of the PM. This has been true of EVERY Prime Minister, too: do you really think Brown, Blair or Major could’ve taken Salmond on? Hell, Thatcher was trounced by a geography teacher from Gloucestershire, you think she could’ve stood a chance?
So it’ll be interesting, to say the least, to see how the FM will react to whatever the announcement is tomorrow – but if he goes hardball, then the coalition’d better watch out.
I see that what I said at 12:33pm was in fact bang on the money and tomorrow we’ll be on to some other fabrication. When will people do something about the BBC in Scotland?
Just a thought, what if all these words are missing the point, and neither Salmond nor Osbourne are calling the shots. What if the all powerful central bankers are saying they will not accept Scotland using the pound post independence.
These central bankers are not English or Scottish minded, they are cruel and money focused individuals who can start wars and bring countries to their knees. Their concerns are about control and money. They will want to control Scotland as they do the UK and most countries in the world through controlling strategic assets and national debt.
Think this is fantasy – look at who owns the a Federal bank in America, look at the involvement of big banks like Goldman Sachs in the UK governance. Politicians are powerless in the face of these money men.
Osbourne will be told what to do, as will Balls, Alexander or any other chancellor, by these money men.
Rothschild said – ‘He who owns a countries debt controls the very country itself’. This is as true today as it has been for over 300 years. Hidden control is exerted by the money men while politicians spout hot air.
Just a thought as I say.
Rev, re bemused about the timing of the apparent intervention George Osborne will apparently make tomorrow??
Not sure, as Alfresco, is saying this is BBC/BT desperation linked to RBS/ Barclays comming off the fence – for what it’s worth, I think the desperation/ reason is an all out – stop the YES momentum in the polls.
This latest currency tosh is so fiscally inept that if Osborne delivers it tomorrow; ‘The Government of the United Kingdom have today formally ruled out a currency union with an independent Scotland etc, etc’ – by Friday lunch time he and the £pound will be toast.
So my call is Barclays/ RBS were sounded out – given the heads up on this planned political ‘posturing’ move – but from Barclays / RBS point of view they saw a highly risky lose money move that neither Barclays or RBS wanted any part in – hence they both nail their colours to a different mast – coincidentally – just in time. And for the record banks don’t do coincidental!
Which bring us back to the motive – this is a massive winner takes all bluff 7 months out and the only 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.
Follow the money – the currency zone is a done deal – every high street bookie knows that and every high street bank is a bookie – hence Barclays (as the repected face of the international markets) call. Which only leaves stop the YES poll momentum. – Try seize the agenda…
@Taranaich –
As always, I read your comment with interest.
I think you’re touching on something which has, so far, been absent from the MSM debate. Salmond has ‘vision’. He swats away these ‘economic’ stushies because, when it comes right down to it, he knows that people don’t want to spend their every waking moment just worrying about money.
They want more – even if they can’t identify it – and they respond accordingly when someone delivers. Ordinary punters (or Low-Information Voters, if you prefer) ain’t daft – they respond to the basics: body-language, eye-contact, tone of voice etc – Salmond knocks every other party leader into touch.
Without coming across as a hopeless idealist, he’s already articulated a scenario where those in government genuinely regard ‘people’ as being more valuable than mere dosh – that will, I hope, become clearer as these faux arguments over ‘currency’ eventually expire.
I was always an SNP supporter until the SSP was formed. I’ve never voted for any other parties in any elections, ever. But even as a pretty diehard SSP punter now? I can’t imagine there are many, be they old-Labour, LFI or whoever else on the real ‘left’, who don’t heartily applaud Alex Salmond for the chance he’s given us.
And we will take it mister – no doubt about that.
‘In the meantime, we return you to our regular programme – it’s ‘Cobblers’ from ‘Ozzy, Balls and Alexander’.’
Radio Scotland’s ‘Morning Call’ was dominated, as you would expect, by discussion of the impending speech from Osborne. A significant number of the callers were pro-Independence; a few others said they were moving toward YES as a direct result of what they perceived to be a blatant attempt to bully Scotland into voting NO.
Plenty of people have been incensed by the BBC story – the tale that grew and grew – of how the Chancellor was definitely going to rule out a currency union. So how does the Radio Scotland website describe the content of today’s show?
“Morning Call – 12/02/2014 – Scottish Councils have spent over £2.7m over the past five years in payouts for vehicles damaged by potholes. Louise White asks, can we ever expect a pothole free road in Scotland? Call 0500 92 95 00. Text 80295.”
So, looking back at this in the rear-view mirror, there’s nothing to see. But they can’t hide their part in this. The aggressive grilling of Scottish Government representatives today over Currency Plan B was off the scale. Did anyone hear the way Stuart Hosie was spoken to just before 5pm on ‘Newsdrive’ this evening?
Once this firework-display of a story has fizzled and the FUD-chuntering has been restored to normal levels, the BBC should be called to account over the level of bias they have displayed in this matter. Whether the organisation was itself being played by the Treasury, they overstepped the mark completely and strayed into outright manipulation of the political process in Scotland. No journalism here, never mind impartiality.
Maybe it doesn’t fit with the strategy at the present time, but the Scottish Government would be on very solid ground if it wanted to challenge them. This one was visible to all.
Mind you, who’s going to listen, much less respond to any complaint? Let’s hope the Scottish public was paying attention and get a resounding four when they start putting two and two together.
So here’s the plan
1. Thursday – The three main Westminster parties declare that whoever forms the next UK government – none will enter a currency union with an independent Scotland.
2. Friday – 3 polls already commissioned – ask the prescriptive question planned.
3. Publish results – the following week / for MSM weekend spin – discussion
4. Repeat – 1, 2, 3 in four weeks with some other myth
5. Repeat – 1, 2, 3 four weeks thereafter with some other myth
Leave nothing to chance
(a) PRE Select Definitive Date for Fear Myth
(b) PRE commissioned poll for following day.
(c) 7 days from poll publish / and spin PRE arranged result
Repeat….
Keep your eye on the ball – tomorrows myth is pure bluff
We need to focus on what they use the bluff for.. the bogus polls campaign
I have to keep harping on this because it is the most important fact in the entire independence debate and it is germane to killing every point that Better Together have ever made or will make. “What is this rUnited Kingdom Government that everyone seems to think will exist but which cannot legally do so”. The bipartite Treaty of Union created an entity titled – “The United Kingdom”, so named because it was indeed a bipartite union of two independent Kingdoms. It did NOT eradicate the four countries that those two kingdoms ruled over. Neither did it, “Extinguish”, only the Kingdom of Scotland. So please do not confuse Kingdom, United Kingdoms or otherwise, and countries. On day one of Scottish Independence the legal Status Quo Ante is a return to the pre-Treaty of Union status. That is to two crowns on one monarch’s head and two independent parliaments – However, Westminster is the UNITED KINGDOM PARLIAMENT but only actually a de facto Parliament of England. It thus ceases to exist and there are no members elected to a parliament of the Kingdom or Country of England. Simply requesting any British Nationalist who claims otherwise to cite their legal proofs and refer them to the 1706/7 Treaty of Union for the truth.
Rev
Ref your post:’
“its very confusing that we want power just to hand it over to the EU”
We’re ALREADY IN THE FUCKING EU.
If I hear one more person spout this idiot UKIP pish I’m going on a murder rampage.’
As you say we are already in the EU and we now have EU laws covering c80% legislature, independence from the UK parliament will not change Scotland legislature to any great extent. The Lisbon Treaty signed by Gordon Brown leads to a Federal EU already dominated by the Germans.
A number of people are saying on the blog they are in favour of the Euro, and some are saying it will be up to Scottish people how they move forward as a nation. Where is the commitment to a referendum on the march to a EU run Scotland? EU membership and true independence are not compatible – look at Ireland, Portugal, Cyprus, Greece, etc; even the powerful founder members have no control over their borders, immigration, interest rates, etc or the multitude of laws that are forced upon their citizens.
The EU will force the Euro on Scotland as a precondition of renegotiated membership, will there be a referendum or not on this loss of control? People say yes but where is the commitment from anyone? A high net contribution, continued open borders and continued exploration of fishing grounds are also likely demands.
The independence debate surely should be really as much about adopting the European project or not, as moving away from the UK.
[…] debt. And as such, the truth is that Scotland holds the strongest hand at the table. So long as it plays it properly, let there be no doubt about it: Osborne will fold […]
If I were a responsible journalist I’d be asking the Treasury what damage not having a currency union would do to the rUK economy. Presumably good analysts will have considered that in their calculations. FOI request anyone…?
The way forward from Osborne/Balls and that other irrelevant wee scunner seems broad and firm to me:
1. Stick to the ‘Bluff, Bluster & Bullying’ line saying that they are likely to change their position when ‘Yes’ wins; 2. Point out, in general terms, that there are several perfectly viable other options for our currency without even thinking about the Euro at present; 3. Don’t be lured into blurting about rejecting a share of UK debt;4. encourage a big push by Labour for Independence, and all of the rest of us, based on the McLeish comments and those of SLAB flunkies who support Balls.
It’s time to settle this referendum by drawing the Labour vote decisivly over to ‘Yes’ in the process of which proper Labour people can also take back their party from the London boot lickers who run it now !