What you won’t read today
The Scottish and UK press has been packed solid for the last 48 hours with strangely uniform assessments of how George Osborne has conclusively smashed the Scottish Government’s position on an independent Scotland’s currency.
We’ve offered our own analysis, and various politicians and professional activists on the No side have been pouring ugly, borderline-xenophobic scorn and sneering on other nations which use some of the alternative options to a formal Sterling union, which is usually a sure sign that they’re scared of something.
So it seemed worthwhile to collect together the views of some proper financial experts in one place for handy reference, because the cosy consensus in the UK media doesn’t seem to be reflected by people who actually know what they’re talking about.
Deutsche Bank thinks a Scottish pound pegged to Sterling is sensible.
The Wall Street Journal concurs, calling it “viable and easy to implement”.
The Adam Smith Institute thinks “unofficial” use of Sterling is better than a union.
And many city financiers agree with them on that.
Including the Institute of Economic Affairs.
And devolution expert and advocate Alan Trench today highlighted a post of his from January 2012 but which could have been written an hour ago, in which he doesn’t recommend the unofficial route (citing the bewildering “not enough independence” argument beloved of the No camp) but notes that it’s nevertheless perfectly achievable:
As we’ve said already this week – an independent Scotland’s currency isn’t really a very big deal. If there’s no Sterling union the alternatives are perfectly workable, and in fact have some advantages over a union, while still allowing normal folk to carry on with their daily lives without noticing anything’s changed.
(The one possible major downside, that the Scottish Government might have to pay higher rates on borrowing, is something of a red herring, since an independent Scotland wouldn’t actually need to borrow money even if it DID take on a share of UK debt, something it would be under no obligation to do.)
We said Osborne’s speech was a diversionary attack, pretending to threaten one thing while really threatening something else entirely. We’re very pleased to have such an impressive array of fine and respected authorities backing us up.
Interesting to see that the Telegraph and the English edition of the Daily Hate Mail are starting to soften their stances. Cochrane and Roden must be fuming.
According to English patriots dabbling in the debate over Scotland’s wish for genuine democracy, every country not England is vastly inferior in some regard, and a good many basket cases unworthy of interest.
It is a wonder England has any friends in other nations.
Checking in (again)
Welcome back rev.
Alexis de Tocqueville (1805 – 1859)
The French want no-one to be their superior. The English want inferiors. The Frenchman constantly raises his eyes above him with anxiety. The Englishman lowers his beneath him with satisfaction.
Plus ça change?
Thanks for your comment on my blog today. I will repay the complement by asking if an independent Scotland’s currency is no big deal why is everyone getting in such a fuss about it? Personally as I think the best option would be a new currency backed by a Scottish central bank. I have read that continuing to use the pound without a currency union and without a central bank would go against the Copenhagen criteria for entry into the EU.
effiedeans.blogspot.co.uk/2014/02/the-threat-of-independence.html
A good point by Pete Wishart on Twitter
link to twitter.com
“We should get one of these ‘amazing maps’ up of the countries the Nos have denigrated in their attempt to tell us we can’t govern ourselves”
I think this is a brilliant idea…..
BT are now slagging of Panama…..the most competitive country in Central America
Ireland, Spain, Portugal,Greece obviously and often….it would be nice if BT were asked JUST ONCE….
‘Do you really believe Scotland’s economy is like Greece’
Iceland (booming quite nicely now thank you)
Perhaps we could help Rev out and collate links of BT spokemen and Unionist MP’s slagging off other countries economies.
Without wanting to add to his workload perhaps Rev could illustrate how Panama etc compare with UK economies.
And perhaps we all could forward these links to the relevant nations embassies/consulates and possibly even directly the nations themselves and ask for a comment on the accusations ?
I believe Jim Murphy and Gordon Brown are still persona non grata in Iceland after their ‘terrorism’ comments.
Of course, our MSM seem strangely reluctant to find out what these nations think about being denigrated by major British MP’s in this way….maybe this site can help them ?
Could it be that Eck wanted Plan B all along and Plan A was the bait for Gideon to advance his credentials for replacing Cameron.
This card was played before Boris could gain good traction, say after the EU Elections? It also has the advantage of playing right into the UKIP neanderthals’ mind set.
Remember Gideon is the Minister responsible for managing the Tories opposition to Independence?
Jeremy Warner in the Telegraph:
‘To deny Scots the pound is therefore to deny them independence. Once this fact sinks in, the bravado of last week’s threats could easily backfire. If Scots vote for independence, they have to be accommodated. London cannot honourably or constitutionally take any other course…
Scotland cannot realistically form its own currency while accepting its rightful share of the national debt, for this would be tantamount to default on that debt, throwing both Scottish and British debt management into chaos.’
link to archive.is
In fact the papers full of bluff, bluster and bullying. What a surprise. Well the bulk of them are Unionist rags and can take a hike. They speak for Better Together and represent no one else. There are some interesting and more nuanced articles by individual journalists away from the editorial by lines and rantings and as others have noted the general tone away from the UK press is that Osborne has tried to come the hard man.
We can all see the possible plan Bs in the Fiscal Commission. They are all possible, straightforward to implement and they do not require Westminster’s agreement so there is no hurry. I am quite happy if we go for our own currency but I am equally happy for Salmond to keep the Bitter Ones waiting and get the message across that Westminster cares nothing for Scotland and would willingly see the worst happen to an independent Scotland. We can see who our friends are thanks to George and this is good.
I wish our Gov would stop using the word ‘Bully’. It makes us sound inferior. I prefer they stated ‘threat’. No matter how you analyse it eg. “really threatening something else entirely” at the end of the day they are still threats.
A UK Tory Chancellor coming up to Scotland to talk down to us an threaten us, their supposed respected parter, is what should be remembered. Together with UK BBC, UK Labour, LD all in well orchestrated cahoots.
Effie Deans says:
My own preference would be for the period immediately after Independence, currency union and then a parallel period of the Scots Merk (whatever) fixed to the £STG and as the economy of Scotland disassociates itself for the UK cycles and sales disembalance, an association with another currency group. On that last point who knows what alaternatives would be available then?
sorry missed bit
A pegged £ to start with would be an acceptable plan B, especially if Gideon dumps on us regarding plan A and we tell him to stick his borrowing where the sun doesn’t shine.
I’d let him keep 10% and many thing for a debt free birth.
I still believe that pegging to the pound is the best option. I don’t think it will take more than a few years before the Scottish and English economies diverge and at point it would be best for both economies to do what is best for them.
Does anyone know where the guarantee of 40 or 50 currency union was first raised? I know Ms Wark raised it in her interview with Mr Salmond but she seemed to be pushing a line she had heard else where.
As I predicted here in two articles why Westminster rejected the SNP’s “Sterling zone”:
link to socialistresistance.org
link to socialistresistance.org
I want to use the Pound Stirling (not Sterling)!
In my opinion just using sterling is the best option.This would leave the Scottish govt.a lot of leverage regarding any debt Scotland would have to pay.EG bonds and gold held by the B o E would reduce our debt along with the intellectual propert rights further reducing debt.Then there is consulates ,crown estates,and many other ASSETTS which would have to be shared.We may be owed money from the rest of the UK.at the end of negotiation.
As a scottish seafarer, I understand Panama’s economy is heavily linked to their ownership of their canal, the most direct route for trade between the Pacific to the Atlantic. 98% of world trade is by sea and there are effectively two routes in which, from Europe, to trade with Asia, either through the Panama canal of through the Suez.
O/T, but I’ve posted an account of BT’s Rutherglen launch this morning over on the “A little bit of history repeating” thread. An interesting morning! 🙂
Paper.
Does anyone know where the guarantee of 40 or 50 years of currency union was first raised? I know Ms Wark raised it in her interview with Mr Salmond on Newsnight but she seemed to be pushing a line she had heard elsewhere.
Oi!!!
Lol 🙂
Yes I agree with you that the unionist press, will run with this currency story for the next seven months, and milk it for as much uncertainty as possible.
Stewart Hosie in the Daily Record today backing Alex salmond’s we’ll keep the pound approach, whilst The Daily Record’s, David Clegg continues to gloat, about the lack of Plan B from the SNP.
link to dailyrecord.co.uk
@effiedeans
Like even Stu is quoting “authorities”, the currency is a technicality; everybody is getting aeriated by the crass way it has been announced. What should have been Al Darling’s triumph has been turned into disater by the ineptness of Westminster.
Now even NOs have to agree that Westminster isn’t working for us. 🙂
Every wavering voter I have spoken to now thinks we’ve been told we cannot use the pound and they all believe it. Even some stonewall Yes voters Ive spoken to also are now asking what will our currency be. The fact that westminster cannot do this should be firmly put in place. I’d like to see something very public and very plainly stating, This is a BOS/RBS/Clydesdale tenner and its what we’ll still all be using post Yes. London-Tuff
Your article points things out well, the expert backups are excellent to quote. Over the last few days we have seen Westminster panic set in ” shit, this could really happen, send Ozzie in to scare them “, they will be worse now that it is back firing badly.
During this time ALL of the MSM and all the Unionist usual outlets, including the ” Proud Scots” who we all know of, scream ” Tell us what you are going to do now!!”
It is done with such hysteria that it is clear they are afraid of something.This article points to what that something is, yet Alex Salmond is rightly keeping his cards close to his chest, despite all the bile spoken about him.
In my opinion the SG are playing a good game, the Unionist are increasingly frustrated and hysterical. All is going well!
What I don’t understand is WHY would Scotland WANT to keep the English pound?
Surely independence from the UK means just that, no ties, political, financial or otherwise.
You want self determination then fine, you go it alone, history will decide whether it was a wise decision or not.
Would you expect to use your ex-wife’s bank card after a divorce? Not a chance.
This whole debate of ‘bullying’ is nonsense, Westminster have now forced the hand of SNP to come back with a real solution for Scotland, not a wish list.
You can’t chose which bits you like, if you want to break up a union that was formed to help Scotland break into English established trade markets in the first place, and one to wipe out Scottish debt, you must be prepared to ride the train all the way.
Right now Scotland should be trying to convince the rest of the UK, you know, the other three partners in this union, why we should LET you leave… it impacts us as well you know or don’t you care?
Here we have Simon Walker, head of the Institute of Directors claiming over 30.000 UK businesses DON’T want Scotland to keep the pound, claims the Telegraph newspaper.
Why would Mr Walker reject Scotland using the pound thus incurring charges, for both Scots and English businesses, or is this just posturing by Mr Walker.
link to telegraph.co.uk
Also in the Telegraph Jeremy Warner says, there’s no point in having a referendum now, as its game set and match for the union, as the nationalist’s Achilles heel has, well and truly been found, in the failed currency union.
link to telegraph.co.uk
paper
Not only but also I listened to BBC R4 news this morn and their silly Scotch are BetterTogether debate and the dude Evan Davis? says “so how can too small, too poor, too stupid Scotland cope with a City bank sector collapse like the last one sort of thing.”
So special guest Prof McCrone of all people, says “well Evan, how exactly will England cope with a bank sector crash like the last one” and “who is going to lend Gideon hundreds of billions, again, to throw so much cash at same bank sector super rich Con/Dem funders that have only gone and enriched themselves even more despite causing a 5 year depression and an rUK debt of 1.3 thousand thousand million quid with a 50 billion quid compound interest per rate, Evan?”
Of Course Prof McCrone didn’t say any of that, why would he, he’s live on BetterTogetherBBC radio. Instead, he waffled about how something will have to be done about bank regs. But he bloody should have, so he gets a third.
scissors Morag?
Other than draconian measures
As far as I’m aware, the only measure available would be to stop sterling being a trade-able currency. That would also mean that no-one would buy sterling as a reserve currency. which would in turn scarper any further plans for QE because if no sterling is bought abroad, then the full inflation effect is felt domestically.
Bye bye sterling.
@EffieDeans
Seeing as you’re here, this explains what a sovereign default is. Page 4.
link to moodysanalytics.com
In particular payment default:
“a missed or delayed disbursement of a contractually-obligated interest or principal payment
(excluding missed payments cured within a contractually allowed grace period), as defined in credit agreements and indentures”
It ought to be obvious to even the meanest intelligence that there is no way whatsoever that Scotland can default on debt contracts to which it is not a party.
Read the second definition and perhaps you will note that there is a government that recently came perilously close to suggesting it was proposing to default by imposing an exchange on debt investors. Here is a little clue:
How fortunate that this government backed away from defaulting on its debt.
link to archive.is
When the currency union was first mooted, I thought the a major problem would be that if in the future we pulled out, the vitriol from across the border as their pound sunk, would very nasty to behold.
The fiscal report, importantly, puts CU as the best solution for Scotland AND rUK.
By offering this hand of friendship so strongly we cannot be blamed for the mess which ensues in rUK if they refuse it.
Scotland alone, almost certainly, would be better off pegged to the pound, at least until the pounds reaches parity with the euro.
So I think the whole CU issue is another rope passing exercise like the devo-max option. Appear to stand firm on it and they will refuse it and congratulate themselves as they hang themselves. We can then pursue the better course for us with clear conscience.
Ian Bell is in top form in the Herald today
link to archive.is
“What we are witnessing now is the reflexive response of the British state towards an unruly province. This might explain why the Yes insurgency has become the most remarkable phenomenon in western politics.”
First the Fear-Bombs, then Dave’s Velodrome Love-Bomb, then Thursday’s NO-Campaign Suicide-Bomb from George.
Another assault on Scotland and the pound from Ruth Mckay, Vice Chairwoman for small businesses from the North East. she claims Scottish independence will be a threat to the business community. She also claims to have both Southern and Northern Irish businesses on her side.
link to huffingtonpost.co.uk
@Effie Deans
You asked “if an independent Scotland’s currency is no big deal why is everyone getting in such a fuss about it?”
I would say for the obvious reason why any issue is made a fuss of in the referendum ‘debate’: the mainstream media (i.e. almost all newspapers, BBC and STV) have decided/been told to make a fuss of it, in order to give the (misleading) impression that Scotland’s currency is of paramount importance, a deal-breaker (they wish!), etc.
This has been done both to try to scare/unnerve less-informed members of the Scottish public, and, crucially for BT/No, to fill as much as possible of the agenda/debate with currency noise so that there is less media time and space to discuss really important (but for No/BT less comfortable) issues.
What do the WSJ and Adam smith Institute know about free market economics?
Look, I don’t really want to go there, but the fact is Alistair Darling knows all about the prudent way to run an economy and forecast major financial crises two years after one had actually started!
George Osborne has done an outstanding job of attacking the UK’s burgeoning debt problem by increasing it. Increasing the UK’s debt is portrayed as a victory for his policy.
When you add in Gordon Brown, the last three chancellors of the exchequer are in no position to dictate to anyone on what is prudent economics and certainly not be so arrogant towards another country’s policy.
@Rev:We said Osborne’s speech was a diversionary attack, pretending to threaten one thing while really threatening something else entirely. We’re very pleased to have such an impressive array of fine and respected authorities backing us up.
For the longest time, I genuinely believed the coalition were simply incompetent. Certainly none of the major players have worthwhile experience in their respective fields, and they’ve come up with policies that are doing damage to the UK’s services which stretches credulity. Hanlon’s Razor: “never attribute to malice that which can adequately be explained by stupidity.” While I’m positive certain Tories are indeed evil (sorry Owen Jones), I was equally sure that they genuinely didn’t understand what they were doing – that their lack of experience in the real world explained their lack of empathy.
Then I read this:
link to greenpeace.org.uk
The government is likely to issue licenses to explore for oil and gas across large parts of Somerset as the area continues to be hit by the worst flooding for hundreds of years.
A spokesperson for the Department of Energy and Climate change (DECC) confirmed that the next round of Petroleum Exploration and Development License (PEDL) blocks will be issued ‘later this Spring’.
A map of license under consultation by the department includes the Somerset levels and many areas currently covered by severe flood warnings. Studies by the British Geological Survey published by DECC suggest parts of Somerset may be appropriate for oil or gas extraction though exploration is at a very early stage.
The department has already issued licenses in North Somerset and the Mendips. Welsh shale gas firm UK Methane and Australian partner, Eden Energy sought permission to drill in Keynsham, a small town outside Bath, which has recently suffered minor flooding.
So let’s see. First, the Coalition gets in. George Osborne is Chancellor. Former Energy Minister Lord Howell, Osborne’s father in law, and current deputy leader of the House of Lords, is a paid lobbyist for the fracking industry. Lo and behold, fracking is being pushed in the UK despite its severe safety and pollution issues, not limited to the fact that leaked methane can result in FLAMMABLE TAP WATER. Somerset was one of the places targeted for fracking, but the community rejected it. Clearly Somerset was not an “unloved area” (what Howell described the North East as, arguing that sparsely populated rural areas would be good to tear asunder and pollute for gas)
After experiencing floods last year, calls for dredging in the flood plains areas like Somerset were not only unheeded, but the budget for flood defense was slashed, along with hundreds of jobs. “Austerity,” as ever, was the excuse, even though further floods were not a possibility so much as inevitable. But they had to claim they listened to “experts,” so naturally they picked the Environment Agency – the same agency which just HAPPENS to be supportive of fracking. What a coincidence.
Now we have Somerset devastated by floods, communities ruined… and now fracking licenses are being issued to those devastated communities. Suddenly it starts to seem more incredible that the government is this incompetent, and less incredible that this is exactly what they were hoping for.
This has completely changed my view of the independence debate. Hanlon’s razor seems inadequate now. It explains everything else, too: Gove’s mangling of the health service is deliberate, not incompetence. Ian Duncan Smith’s brutal campaign against the poor, disabled and disadvantaged is deliberate (and incompetent in his case). So Osborne & Cameron’s attempt to play hardball, treating the Scots like chattel? Not incompetence – malice. Pure and simple.
How soon after voting Yes will the actual income streams for the Scottish Exchequer be identified and quantified? e.g VAT, Excise Duty, Income and Corporation Tax, Crown Estates, licences and fines. How soon after that will they be diverted directly to the Scottish Exchequer so that Scotland can start building on the current Scottish Government’s record of fiscal responsibility? I think when the people of Scotland realise how much potential income they have, they will realise that it doesn’t matter what the unit of currency is.
@taranaich;
There are already 3 fracking sites operating in Scotland, on ‘exploratory’ contracts.
For me this is all about trust, I don’t trust Osborne, had he said yes to a currency union my first thought would have been “what’s the catch”. No one in their right minds can trust the LibDems and Labour is no longer on my radar. I do trust the present Scottish government to get the best deal possible for Scotland under all circumstances.
P.S,
I’m Welsh so I understand the desire to distance myself from Westminster but I’m also realistic in expectations… unless you’re prepared for a permanent split i.e no less than 100 years, or three generations, don’t bother.
This decision will result in permanent changes for you and Europe.
It’s funny that 100 years ago WW1 changed the face of EU and still has a pivotal role in today’s democracy, so when I say a min. of 100 years for a split, it’s for good reason.. it’s a very real time-frame.
Also worth considering in your debate, what will Scotland’s role be in the following;
1. Europe,, membership or not?
2. NATO?
3. Nuclear proliferation?
4. Armed forces?
5. Oil, yours, ours or Norway’s?
6. Healthcare? NHS is a UK organisation, you going to set up your own?
7. Unemployment? Will Scottish nationals be on a different tax rate if seeking work over the boarder.
8. Passports? New issue or just EU standard?
9. DVLC.. again, a UK organisation, you going to have your own?
There’s lots more, but you get the idea.
“unless you’re prepared for a permanent split i.e no less than 100 years, or three generations, don’t bother”
Um, yes, of course we are.
“It’s funny that 100 years ago WW1 changed the face of EU and still has a pivotal role in today’s democracy”
It does?
“Also worth considering in your debate, what will Scotland’s role be in the following;
1. Europe,, membership or not?”
Yes.
“2. NATO?”
Yes.
“3. Nuclear proliferation?”
No. The opposite.
“4. Armed forces?”
Yes.
“5. Oil, yours, ours or Norway’s?”
Ours, at least 95% or so of it.
“6. Healthcare? NHS is a UK organisation, you going to set up your own?”
Oh dear goodness. No it isn’t. The NHS has NEVER been a UK organisation, not for one single solitary day of its life. Clearly you’re new here.
“7. Unemployment? Will Scottish nationals be on a different tax rate if seeking work over the boarder.”
That’s a matter for the two governments to decide.
“8. Passports? New issue or just EU standard?
9. DVLC.. again, a UK organisation, you going to have your own?”
Dunno. We’ve got 18 months to figure it out.
FFS. Despite the name, the Bank of England is really the Bank of Britain – it still exists partly because of Scottish economic growth and Scottish financial know-how investing in it ever since the bank’s founding. Scotland is entitled to its fair share of the Bank of Britain, including using the pound. Simple enough.
@ Andy-B, here’s Ruth Vote NO Mackay at work link to souniq.co.uk No mention of her BetterTogether vote NO campaigning in vote NO Scotland Huffgington Post but it must be good PR for her business and her 2400 cleints!
Very interested to read comments and opinions, but I have a question I’ve not seen raised regarding the “keep the pound” issue. I’m hoping someone more knowledgeable might be able to answer this for me it’s many of you seem much more versed in these issues.
If Scotland currently pays interest on national debt to the Bank of England (if I’ve got that right!), surely we are proportionately an “owner” of the UK currency. I understand Scottish issued notes are not the same as pounds sterling and are only promissory notes. (Are English issued notes?).
So I suppose my question is this; who’s pound is it presently? Do we (Scotland) note have a proportionate ownership of Sterling?
logging in
This is about as ridiculous as telling you what language you can or cannot use after independence. The whole point of independence is that London can no longer dictate how Scotland is run.
ok why dont i just become a central bank and work like all the other central banks, How much do you need independant Scotland 60billion no problem here it is,thin air nothing backing it WELL thats how it is done right now.
Here’s the Daily Mail, claiming Alex Salmond has said he has a back up plan, with regards to currency, and the Mail goes as far to say its a new currency.
link to dailymail.co.uk
Bugger (the Panda)
Its probable that this is the case, however I presume that plan A is the real plan A, as its easier to sell to the DK’s and we could profit from it. but no great problem if it has to be Plan B. Its a win win situation.
Plan A ,as an earlier poster has said we may end up with getting paid money. Ive heard that they cannot hit us for any debt post 2011 as that was the date we said there was going to be a referendum.
That puts our maximum share of debt at around 100 billion, take off the 31 bn in Boe assets (QE owned by boe and now bonds) that’s down to 69bn.
Ive seen figures stating Uk’s assets estimated between 821 billion to 1.3 trillion, so lets take take the lower figure, and as if by magic Scotlands share would work out at 70 billion.
Bearing in mind that we will take 100% of Assets in Scotland so we will only get our population share on the remaining 90% or so but it will mean our share of the debt will go down pro-rata to near as dammit zero , or if the higher figure for the assets is true then they would have to pay us billions, no wonder they are ruling out plan A!
We don’t want to take any of their military stuff, its crap and not fit for our purposes, Destroyers designed to protect Aircraft Carriers are not best suited defending fisheries and oil installations. We would be better designing and building new ones from scratch on the Clyde.
The Typhoon costs over 4 times to operate that the Saab Grippen. We can do far better on the open market for Military hardware.
So Plan A, they may have to give us billions.
Plan B. they don’t have to give us anything, but we don’t give them anything either.
We have got them between a rock and a hard place no wonder they are squirming.
Heedtracker at 2.40
Its time someone in the media actually challenged the BT myth that an independent Scotland couldn’t bail out the banks.
We need an article from a creditable non political source in the MSM to spell out (again) that Scotland wouldn’t have bail out any more than 10% and at the time that would be £8 billion out of GPD of £145 billion.
Also point out it was the UK regulatory authorities headed by Chancellor of Exchequer Alistair Darling that had the powers to investigate the RBS / AMRO take over but ignored fact that no due diligence was done by RBS on a deal worth £49 billion before they gave its approval for the world’s biggest bank take over deal that brought about the collapse of the Royal Bank.
Incredibly, the FSA overlooked the UK Treasury rules on capital by allowing Goodwin and RBS to dip below 4%, below the minimum regulatory requirement on capital, to do the ABN Amro deal. So much for relying on the UK regulatory body.
At the time Fred Goodwin was an adviser to Alistair Darling as Chancellor, and was still a member of a key Treasury body advising Labour months after the banking crisis and quitting RBS
@Westie7 – we have to try and point them to the opinions the rev has put in this commentary.
Surely most folk are aware the Ireland pegged to the pound with their punt for years?
It’s very unfortunate that people are unwilling or unable to look beyond the headings and thwesoundbites.
Of course because we have a corrupt BBC – no point in saying otherwise – the message will not get out from them.
paper (white)
And can Rev Stu or someone investigate if there has been any precedent for a newly formed nation accepting a portion of the debt of the former state.
It didn’t happen in Ireland or the Baltic States.
@AndyB
I read the piece by David Clegg in the Daily Record Andy, every word. And couldn’t find any reference to Ed Balls, Labour Party Shadow Chancellor.
Why did David Clegg conveniently forget to add Ed Balls to his story. After all Ed Balls was right there at the side of George Osborne (Conservative Chancellor) when the currency threat to Scots was unfolding.
Labour are in this up to their necks.
David Clegg just didn’t want to remind his readers of it.
I wonder if he will bring it up on one of his many visits to the BBC Scotland studios.
The BBC accused of political bias,too the right,the BBC bias? surely not.
http://www.independent.co.uk/news/uk/politics/bbc-accused-ofpolitical-bias–on-the-right-not-the-left-9129639.html
@Lind’s back – Business for Scotland have got several articles on that and are very clear in their language.
They also provide sources for all their info.
You will not get any MSM or BBC to report that fact.
Sorry Linda
@Linda’s Back says:
And can Rev Stu or someone investigate if there has been any precedent for a newly formed nation accepting a portion of the debt of the former state.
None of the countries that have become independent from the UK since the 2nd World War took on any of the UK national debt.
Ditto on the break-up the former USSR.
I don’t know if this type of agreed debt-financing (you can’t actually transfer any of the debt) has ever happened, but if it has, it must be in a very small number of cases.
DVLA.
At the moment I think it costs more to administer than it pulls in. In those 18 months I would hope to see it scrapped altogether and replaced by a levy on petrol so that those who use their cars most, will pay most.
@ Linda’s Back, Prof McCrone said post indy better bank regs or more likely, RBS and co would move HQ to London but to be fair he did seem to know he was not expected to say much about Scots indy finance policy or anything at all really. Your on Vote NO BBC Prof, where we insist people must have more info but we’re only giving them vote no info.
@Linda’s Back.
I’m almost 100% sure that it didn’t happen when Isreal came into existence too.
I’m not too well up on the details about the pros and cons of what an independent Scotland’s currency situation should look like so bear with me, but I have an unqualified but instinctive feeling that unless the currency is somehow completely divorced from the BoE that we will not be truly independent. One thing I do know for sure and that is that Cameron et al are getting worried…
ps if there’s a no vote we’re toast, but then of course you all know that.
No matter what challenges face us after a YES vote they will be insignificant in comparison to those that await us after a NO vote.
Signing in again. When will we get back to normal?
Calgacus MacAndrews says:
@Linda’s Back
The big problem with trying to share a national debt between multiple post-split states is that the debt (like all debt of this type) is owed by the original state who took it on, and the creditors would normally not entertain the existing debtor trying to fiddle around with who actually owes the debt going forward.
It’s like having a chat with the person who car-shares in your car, about them taking on part of the car loan that you are repaying. You can both chat about it, but in the real world the finance company who made the loan to you just need you to stick to the terms of paying it back.
So if Scotland take on part of the UK national debt (which would be incredibly unusual, given all the precedents), it would be in the form of Scotland agreeing to pay rUK so much per year for a while, until the agreed share sum was paid off.
Taranaich – I read this article a few days ago which kinda confirms what you’ve said about the fracking in Somerset.
link to therapybook.wordpress.com
@ heedtracker and Linda’s Back
Yes we should point out that it will be academic come 2016 due to implementation of Basel 3 and Basel 4
Check out this KPMG briefing paper on the subject
link to kpmg.com
However, given that Osborne and Darling et al keep harping on about the Scottish Banks perhaps Business for Scotland who are now respected by media could do an opinion piece for the Herald or Scotsman to knock this on the head.. again.
log in
I’m as happy as Larry and Eck and Nicole and the Rev. You know the game is up when the Daily Hate is begging us to stay in the Union.
The First Minister has played a blinder by keeping Stum. Seriously who really cares what currency an Independent Scotland uses? I certainly don’t, I would be quite happy with having control of our own resources, taxes and laws.
Nobody here doubts that Scotland will be a successful nation with or without a shared currency with rUK. Westminster however aim is to persuade us otherwise.
Well, having carefully weighed up this matter, they can take a hike. Don’t threaten me, I bite back.
I’m inclined to view this “cannot use sterling” as an attempted diversion from the assets and debt problem. That Scotland can use sterling, or the US dollar etc. is not in dispute. What is in dispute is the issue of shared responsibility in a shared currency, and really I would not be at all inclined to burden myself by entering such an arrangement with a country burdened with £1.4 trillion debt.
I note people glibly talk of Scotland being expected to assume liability for 1/10th of UK debt. Less talk noticeably, other than as mentioned by Alex Salmond, of the asset share. and why one tenth? The current population ratio hasn’t always been 1/10th, it used to be much less and although the £1.4 trillion debt has been incurred in the short term of some seven years principally by the two amigos Brown and Darling, with the population standing at a 1/10th ratio,the assets were built up over centuries so any assessment of asset division needs to work back through the records of population ratios, assets and debt. Going back just to the mid-sixties might suit Scotland sufficiently to drive home the argument although I’d be content for the analysis to go back as far as records exist.
Andy-B says:
Andy, it is just a ploy to provoke a response. The are all going mad to know what will happen next. SG are playing a blinder, more irrational statements will be made, more YES voters IN. They will be told if and when it suits to tell them, anything.
The Morning Star claiming that, if you vote yes you’re weak and cowardly, as it won’t rid Scotland of the Tories, the Morning star goes on to add that, socialism within the yes camp isn’t progressive, the MS also continues, with if you have nationalist tendencies, you posses a regressive ideology.
The MS then adds independence offers nothing but the same only under a new flag,also mentioned is nationalism promotes racial and ethnic division. The Morning Star adds more insults to injury best you read this article for yourself. They seem a lovely bunch at the Morning Star.
link to morningstaronline.co.uk
Calgacus MacAndrews says:
Who is responsible for ALL the debt is like this.
You buy a house with a mortgage, you sign the loan document.
You have the house and decide to bring in a lodger.
You lose your money all of it with bad investments. The lodger cannot be held liable. Only YOU who signed for the loan can be chased for payment, no one else, not even the lodger.
@Linda’s Back
Looking at precedents, because negotiations over assets and liabilities will be compicated, in the vast majority of new-country formations since the 2nd World War there have been no at-time-of-split transfers of assets or liabilities.
i.e. it has generally been simpler just to say “we’ll each just keep what we have, and get on with it”.
An early decision for each to keep what they have then allows for the early commencement of setting up any new bodies or mechanisms that the states will need post-split.
This type of early decision to go keep-what-you-have makes keeping the time gap between Referendum Day and Independence Day to 18 months easier to achieve.
Given the way George Osborne was bluffing and blustering about around this issue on Thursday, I’d guess that the Scottish negotiating team will set a fairly short time limit (e.g. 2-3 months) on getting an agreement in principle on an asset-and-liability-share.
If the more complex sharing agreement is not reached in principle by the end of the time limit, it would then be simplified to an each-keeps-what-they-have arrangement (with a few additional bombs-and-whistles around what is currently in the bunker at Faslane).
Simples.
Liz @ 3.24
Thanks for the Business for Scotland info
Found this interesting article
link to businessforscotland.co.uk
A unionist will explore all avenues until only common sense is left.
I believe it is critical that Scotland demonstrates its friendship with England by proposing a sterling union, until such time it is forced to choose one of the other options, (well detailed in the White Paper) or alights on using sterling without a banking union.
The decision on the currency lies not with rabid anti-Scottish politicians, but with the people of England who will instruct their representatives accordingly, the strength of feeling made manifest in the result of the 2016 UK election.
England must refuse the sensible choice, not Scotland, otherwise we will appear to be brutally self-serving at the cost of our old friends in England, and we do actually have some!
Watching the unionist press peeing themselves over the rising Yes vote and the currency issue reminds me of when two of my sons were toddlers and having a race to a particular point.
The one who was two years older naturally won, and the youngest one went into a strop and cried, ”He’s not being fair; he’s not letting me win!”
On a slightly separate topic I believe the Yes campaign and the SNP should stop using the word ‘bullies’ to describe Osborne and co. It’s just a wee bit saft. Much better to call them thugs.
What I cannot get my head round is we Scots are not to be trusted with the English pound but they insist that they would trust us with their WMD. I well recall that there was even talk of annexing part of an independent Scotland to store such WMD.
Funny old World.
“unless you’re prepared for a permanent split i.e no less than 100 years, or three generations, don’t bother.”
Not really up on the old independence thing are you?
right about now we should be seeing a queue of ex colonies lining up to rejoin the club by that reckoning, I cant see Scotland wishing to rejoin the union in a thousand years never mind a hundred.
@Linda’s Back
Legally:
“Where the predecessor state continues to exist, it would appear that the presumption is that the responsibility for the general public debt of the predecessor state remains with the predecessor state after the secession
(Shaw, M. (2008), International Law, p. 998).”
link to academia.edu
Russia despite only being one of several successor states to the USSR took on all of the international assets and the debt of the Soviet Union “zero option”:
link to en.ria.ru
No part of Colombia’s debt was assumed by Panama when this state seceded in 1903. Likewise, Pakistan did not pay any of British India’s debt after partition in 1947 (Shaw, M. (2008), International Law, p. 999) – quoted by Qvortrup.
Pakistan is only relevant because Professor Crawford’s questionable theory of the “continuator” state heavily relies on claiming that it “seceded” from India (despite the fact both India and Pakistan became independent from the British Empire on the same day). Russia is also a key precedent for Crawford – because his instructions relate to the rUK’s (sic) ability to keep the UK’s security council seat, where the only precedent is Russia.
Even in the consensual example of the Czechoslovak velvet divorce, where the approach was based on two equal successors (an approach rejected by the UK), Slovakia negotiated a lower share of debt.
According to some sources, it sought compensation for past losses of Slovak gold reserves, certain territory and the continuing use of the Czechoslovak flag by the Czech Republic. p.332 (in French):
link to persee.fr
All of these are relevant to Scotland – compensation for oil, sea area and the Union Flag.
So the precedents are actually in favour of a more robust position on debt than the Scottish Government has been taking so far.
The Reverend Campbell said;
“What I do know is that certain influential people, such as the Chancellor of the Exchequer and the Shadow Chancellor are saying that it is unlikely to happen. Perhaps they are bluffing.”
The word you’re looking for is “lying”, really. There isn’t even the tiniest chance the rUK will refuse a Sterling union, for about half-a-dozen immediately obvious reasons.
How can I say this with such certainty that I’d be willing to bet you £500 on it (which I am, incidentally)? Simple: they haven’t said they will.
If Osborne came right out and said, unequivocally and without weasel words, “We WILL NOT entertain the idea of a currency union”, it’d be a huge blow to the Yes campaign. The press would go absolutely crazy. Sensible people might not BELIEVE him, but the mere act of saying it would be enough.
So why doesn’t he? Why does he pussyfoot around with rubbish about “unlikely”? Because he knows fine well that if he gives a straight No, businesses in the rest of the UK will conclude that he’s completely taken leave of his senses. Scotland is England’s second-biggest market, and not one English business wants to have to change currencies to trade with Scotland. The costs and damage would be unimaginable.”
Now that you have what you were looking for – why the whinge?
“Now that you have what you were looking for – why the whinge?”
Who’s whingeing? I’m thrilled. Most exciting week in the referendum debate yet. I freely admit I didn’t expect this to happen so soon – I thought it’d be kept as a last-minute Hail Mary play if Yes looked like winning. But heavens, you surely can’t disagree with my prediction that the press would go absolutely crazy?
“Only YOU who signed for the loan can be chased for payment, no one else, not even the lodger.”
And don’t forget,
according to David Mudell (not a typo) Scotland doesn’t even exist, Id like to see Westminster taking the NEW country of Scotland to court for debts run up before it legally existed,
well done Mundell your an idiot just wait till Osborne gets his hands on you.
I am sure most folk here will have watched N Sturgeon’s speech and question/answers a couple days ago at a London Uni.
Her is a link, an excellent, forward looking, positive and intelligent talk from N.S. Total contrast to the BT’s attack and defensive mode. It is good to see the look on some faces in the audience when their lack of knowledge is exposed…very good.
link to youtu.be
Who’s whingeing? I’m thrilled. Most exciting week in the referendum debate yet. I freely admit I didn’t expect this to happen so soon – I thought it’d be kept as a last-minute Hail Mary play if Yes looked like winning. But heavens, you surely can’t disagree with my prediction that the press would go absolutely crazy?
If they are panicked enough to spit out “no currency union”, with seven months to go, do you think that nearer the time, when YES takes the lead, that the sinister “yes does not mean yes” threat, which they are all denying at the moment, may actually become an official release also?
Serious question looking ahead.
If the Scottish currency is pegged to the Pound Sterling how difficult and on what time scale would “convergence criteria” for Euro entry be?
After independence the Pound Sterling would be vulnerable to Soros et al.
That is the crux of this whole business.
So westminster et all are going to prevent an independent sovereign Scotland from using the pound – I’d love to know how they would achieve that? And under what jurisdiction? Shouldn’t we be told? It’s all so uncertain – is it not.
Rev. Stuart Campbell: yes I am new here but it doesn’t make my questions less important, or do you think the only opinions that count are north of the border? The split up of the union will likely affect the tax I pay and the services I receive so excuse me if I ask stupid questions.
On the NHS question, it IS a uk based organisation, it was never exclusively English, Welsh, Irish or Scotish, it has no boundaries and employs people from all 4 countries. Policy is decided centrally but governed locally, that’s why so many trusts have hit financial trouble.
My point is this, why would a ‘national’ organisation agree to pay 3/4 of it staff in Sterling and 1/4 breakaway in Euros or whatever you decide on? Simple answer is they won’t… you will be asked to form your own ‘Trust’.
I’ve worked in pan European companies before and those not based in UK set up their own independently run partnership, paying whatever local currency is relevant.
If NHS staff from the other 3 are drafted in to help out in Scotland, will that mean they will need special pay guidance from the Revenue as they are effectively working in a foreign country??
So you see Rev. You may not like or agree or even show disrespect to my obviously inane and Ill informed questions and comments, but that is the point, there are people like me on both sides of the border, all poorly informed, all lacking in information, but all have valid opinions… perhaps less of the deriding remarks in your future replies will gain more support for your cause, otherwise you fall into the same ‘pro-westminster’ cattle who also respond to Scottish voters with same discourtesy.
“On the NHS question, it IS a uk based organisation, it was never exclusively English, Welsh, Irish or Scotish, it has no boundaries and employs people from all 4 countries. Policy is decided centrally but governed locally,”
No it bloody isn’t. Here, learn something:
link to wingsoverscotland.com
Oh, and if you don’t have the courtesy to read the commenting rules before posting, expect to be met with irritation. The link is right above the comment box.
Alun D – the Rev could have been clearer in his answer to you. The NHS in Scotland has always been separate from that in the rest of the UK! Look it up! The only problem at the moment is that as Westminster pushes your NHS more and more to the private sector, and if we are stupid enough to vote NO, our funding for our NHS will be cut by Westminster under Barnettization! Even Barnett may disappear. You complain about lack of information. Generally, in my experience, those who want information can find it. Try the Scottish Goverment’s White Paper for a start. I believe you can also get an abbreviated version. Thanks for your attention.
Alun D,
The NHS services have always been separate.
The Scottish NHS was created by the National Health Service (Scotland) Act 1947.
The National Health Service in England was created by the National Health Service Act 1946.
Whoops, sorry Stu, I commented too late.
Re Scottish independence:
May I suggest a solution to the whole our pound/your debt problem?
Day 1: Scotland declares independence.
Day 2: Scotland announces new currency, the fuku, to be issued. 1 fuku is equal to £1trillion. A fuku note is sent to Mr. Osborne as full payment of Scotlands share of UK debt.
Day 3: Scotland devalues the fuku to par with the £sterling, simultaneously announcing the withdrawal of all fuku’s and issuing of a new currency, to be called the toopal. A symbolic 1-toopal note is sent to Mr. Osborne.
Day 4: Scotland issues yet another new currency, the Scottish pound. At 1-1 with a hard currency. NoK, maybe?
Just had this posted on one of the sites I am on
I posted
In case you hadn’t notice we have every right to hold a referendum to leave UK – its a partnership and one that we choose to let the people of Scotland decide if they wish to be part of
they posted
No you don’t have that right.
The Act of Union is supposed to be irrevocable, and the Scottish administration was given no legal power to conduct a binding referendum on independence. It is a massive concession from the UK that they will take the results seriously.
It’s no partnership if one party can just walk away unilaterally
Found this site which I think discusses what irrivocable mean in terms of law
It is only when the law in question is mischievous, and generally felt and understood to be such, that an argument of this stamp will be employed in the support of it.
Does that mean poster just did exactly that
Suppose the law a good one, it will be supported, not by absurdity and deception, but by reasons drawn from its own excellence.
Yeah irrovocable law need to actually be what all want
But is it possible that the restraint of an irrevocable law should be imposed on so many millions of living beings by a few scores, or a few hundreds, whose existence has ceased?—can a system of tyranny be established, under which the living are all slaves, and a few among the dead, their tyrants?
mmm according to the poster who replied to me I should dam well suffer in silence of my tyrannical masters (west minster) all because of a 300 hundred year old treaty
The text is here if anyone ever happens on some idiot who is trying to blackmail you into staying just because it said it in a 300 year old document
link to oll.libertyfund.org
Is that the all singing all dancing UK wide NHS Alun D?
@cearc
Not only did we get the Poll Tax a year earlier, but we got the NHS a year later!
Tri ears,
In all fairness, half of Scotland (geographically) did have the Highlands and Islands medical service from 1913 until then. Which was the model for the NHSs.
in my less cynical moments I agree with the Panda, George is going for the top job
but i still think his primary purpose was to bully, he’d still love to win the referendum & screw us
@cearc, yeah, I’m just being facetious. I do know about the Highlands and Islands thing, but I’d like to find out more about it.
@Atypical_Scot: There are already 3 fracking sites operating in Scotland, on ‘exploratory’ contracts.
I really hope Salmond takes Harvie’s statements on fracking to heart. We’re world-beaters in oil, wind, tide and wave energy: what the hell do we need fracking for?
@Heather McLean: Taranaich – I read this article a few days ago which kinda confirms what you’ve said about the fracking in Somerset.
It’s worse than I thought. How can people just let this happen? It isn’t like this is some conspiracy, this is all RIGHT THERE IN THE OPEN.
@Andy-B: The Morning Star claiming that, if you vote yes you’re weak and cowardly, as it won’t rid Scotland of the Tories, the Morning star goes on to add that, socialism within the yes camp isn’t progressive, the MS also continues, with if you have nationalist tendencies, you posses a regressive ideology.
Ah, the Douglas Alexander school of socialism. And of course they don’t allow comments…
@Sandra: It’s no partnership if one party can just walk away unilaterally
There are some things that are just so mind-meltingly idiotic, you really *can’t* respond to it. Still, you’ve done well in response!
Alun D from Wales
You don’t happen to be Alun Davies AM, Welsh Rural Affairs Minister???
The ex- Plaid Cymru hopeful who decided that his career prospects would be served so much better by switching to Welsh Labour?
And starting to articulate the very real fear of Welsh Labour AM’s/MP’s that Scottish Independence will threaten Labour’s 100 year ruinous dominance of Welsh national life?
It’s just that your hectoring and arrogant manner style here is eerily similar to what the public here in Wales have become accustomed to from Alun Davies AM both in Welsh and English over the past few years…..
Just asking like…..
Alun D at 2.35
“What I don’t understand is WHY would Scotland WANT to keep the English pound?”
It is not the “English pound”
“Surely independence from the UK means just that, no ties, political, financial or otherwise.”
Don’t be silly.
“You want self determination then fine, you go it alone, history will decide whether it was a wise decision or not.”
Like the rest of the interdependent world then?
“Would you expect to use your ex-wife’s bank card after a divorce? Not a chance.”
No, but we’d certainly both get our share of the joint account
“This whole debate of ‘bullying’ is nonsense, Westminster have now forced the hand of SNP to come back with a real solution for Scotland, not a wish list.”
The real solution is that Scotland continues to use the pound which it jointly owns. The Unionists will have to explain to a gobsmacked world why it is behaving like this.
The YES campaign and Alex Salmond has just offered the union the solution which benefits England over any other offer. They have refused it and backed themselves into a corner from which there is no escape except capitulation.
We give them a generous offer and they slap us in the face.
If you want a trap well set send for Alex – and as he pointed out last week there are three other perfectly workable options for Scotland – all of which absolve us of our share of the UK debt.
Alex won’t blink first. We are fighting fools who retain any respected profile only through the efforts of our dishonest press
@Robert Kerr
Why would you want to use the Euro? Scotland could probably cope with the Euro right now, but as oil revenue drops over the coming years and external surpluses give way to deficits it will make more and more for Scotland to have its own currency.
It would be if rUK joined a currency union, as it was when the UK joined the ERM currency union. It would not be vulnerable if the rUK gov retained control over it, just as it ceased to be vulnerable when the UK exited the ERM, and is not vulnerable now.
but as oil revenue drops over the coming years…Yaaaawwwwwwnnnnn!!
Alun D
When you say ” there are people like me on both sides of the border”, it makes me question your Welshness.
Personally I think that you are a troll but Rev has given you the benefit of the doubt despite the fact that you have turned up devoid of facts.
I’d quit whilst I was ahead if I were you.
I honestly don’t see the big issue with currency. The channel islands and Isle of Man are not part of the UK, but use sterling as a currency without liability.
If plan A is not megotiable, why don’t we just have an independent currency pegged to the English pound?
This will make it easy for mutual trade with England, Wales and NI.
We would also be able to underwrite our banks operations in Scotland
@Croompenstein
Sorry to wake you. Do you think oil revenue is not going to fall? I didn’t say all at once and I didn’t say starting tomorrow; just that it will fall over the coming years.
It’s just that it’s a tired line that we expect from the likes of Flipper, yes the oil will deplete but think how much that will be offset by renewables, no House of Ermine & Pish, and not having to pay for new obscene WMD. While the oil is there at least the SG has committed to setting up a fund to help when it is eventually gone but if we stick with Wasteminster when it’s gone ..it’s gone!
FlimFlamMan
Oil revenues will not fall. As it becomes scarcer it will rise in value.
That’s the way it goes – and as it is essential in lots of modern technology oil will eventually become too valuable to burn
And anyway as many of us are aware there are sizeable deposits in the Clyde and out into Irish sea and I am given to understand from contacts up the west coast the minches look very promising indeed.
It is of course a favoured tactic of our enemies to pretend that Scotland is dependent on oil revenues.
As we don’t have the oil revenues at the moment and operate inside the tax revenues we raise across the board this is of course bullshit.
We do have to get this fact across of course though it is one of the last and most dogged cards in the half-wit pack
They will accuse us of abandoning the UK when we have to go to the UN to confirm our claim to oil revenues but we are not abandoning our brothers and sisters in England, Wales and Ireland we are however abandoning a Westminster elite who govern for the few and not the many. They will be awoken to this when they discover that Scotland is not some leech or subsidy junkie when we take our rightful place among the nation states of the world.
@Croompenstein
Yeah, I know a good chunk of what I say can sound like opposition, well I suppose it is, but it’s opposition to failed economic ideas. I probably need a sig attached to every comment, something along the lines of: “Yes, I’m English, but my family didn’t steal land from the Celts or Saxons, I think Scotland has significantly greater potential out of the UK, and I 100% support independence.”
Scotland can certainly adjust its financial balances by not spending money on nukes or bombing brown people, but the external position matters, and over time the Euro will make even less sense than it does now.
No doubt about that; independence will involve a lot of tricky negotiation, but doing it now will be an absolute breeze in comparison to trying to do it after the oil has gone.
@Dave McEwan Hill
Post at 8:52 Great Post.
Post at 9:45 Great Post.
@FlimFlamMan
Your blethering.
@Dave McEwan Hill
It’s not that Scotland is or will always be dependent on oil, it’s that Scotland will be dependent on oil revenue if it enters a currency union or pegs to sterling. More to the point it will be dependent on an external surplus that matches or exceeds private sector net saving. It just so happens that in Scotland’s case the largest contributor to the existing surplus is oil. It’s the peg/union situation that creates a dependency on external surpluses.
Are there untapped fields? Yes, but dealing with climate change means their extraction cannot be banked on.
The whole tax revenue/spending thing is rife with disinformation from Westminster, but both Scotland and the rest of the UK get more than they ‘contribute’. That’s not a slur on Scotland; it’s just a natural consequence of running government budget deficits. And the numbers make it clear that Scotland’s ‘bonus’ is smaller than the rest of the UK’s.
@Threpnr
Can you be more specific?
@FlimFlamMan
What do you really know about the oil industry in the N. Sea? Not much is my guess, I’ve worked in it most of my life and still do.
What does this statement mean:
“Are there untapped fields? Yes, but dealing with climate change means their extraction cannot be banked on.”
Blethering, is only how I can describe it. There are of course untapped fields, but what climate change has to do with exploiting them is well? You tell me.
Blethering No 2:
“The whole tax revenue/spending thing is rife with disinformation from Westminster, but both Scotland and the rest of the UK get more than they ‘contribute’.”
How is it possible for both to get more than they “contribute”? If there is only so much money in the pot then it’s not possible to take out more than is in there to begin with.
Just read what I’ve written and realised it is possible to get more than you contribute. It’s called debt, that’s why the UK borrows around £100 billion a year, we don’t need to live like that.
Scotland has a surplus, sure England how much do you need?
@Thepnr
The amount of CO2 we add to the atmosphere has to be reduced, which means reducing the burning of fossil fuels, which means not opening up additional oil and gas fields.
There is no money in a pot; the gold standard is over. The UK government runs a deficit; it spends more than it takes in, and it has done so for decades. So we all, in aggregate, get more spending than we ‘contribute’ in taxes. Some of that spending is on things we might not want, like Trident, but the money is still spent.
We do need to live like that if the private sector is net saving and we run an external deficit. We being the existing UK. After independence Scotland probably won’t need to live like that, thanks to oil exports, but the rUK still will for the foreseeable future; there’s no sign of rUK exports increasing that much.
While we continue to develop our envious renewable resources, like wind and wave power we will also continue to exploit the oil and gas around our shores.
One thing is clear Scotland will be self sufficient in power generation and we won’t need Chinese nuclear power.
Thanks but no thanks.
@Thepnr
Yes, the only thing I might disagree with there is the oil and gas. I don’t doubt that oil and gas extraction will continue, but expanding that extraction is another matter. And yes, Scotland is in a great position, both in terms of engineering capacity and basic physical location, to develop a leading position in wind and tidal power, including hardware manufacture.
The point where we came in is that if Scotland has a currency union or peg in place when its external surplus goes, or drops below the level of financing private net saving, then Scotland will be in trouble. Not before, and not at all if it has its own currency by then.
You’re right that I know very little about the oil industry, so I don’t know when production will fall enough to offset rising prices, and if climate change is ignored and new fields opened up the date can be pushed back farther. I’m just hoping Scotland won’t ignore climate change.
Scotland won’t ignore climate change or our brothers, sisters, mums,dads on these beautiful islands. All we want is the right to determine our own destiny through good times or bad but at least it will be ours to choose.
FFM go to BP’s website and look up “Clair”. This is a field west of Shetland in the Atlantic. It’s difficult to develop there as the infrastructure such as pipelines is not in place.
However Total are developing the Laggan Tormore field, Premier Oil the Solan field and BP intend to go ahead with a third Clair development.
Enough of oil, you wish to discuss currency. Well see my earlier post for thoughts on that. Basically this:
“Nobody here doubts that Scotland will be a successful nation with or without a shared currency with rUK. Westminster however aim is to persuade us otherwise.”
Nothing will deflect me from that opinion. Do you disagree that Scotland could be a successful country whether or not we have a currency union with rUK?
Oil is used to make plastic. Pretty much all plastic is made new from oil. There’s not actually that much recycled and the bulk of what is has so far been turned into various textile materials. Poly bags, your mobile phones, uPVC window frames, doors and conservatories, kitchen utensils, cheap shoes, household furnishings, shop fittings, packaging of myriad goods, fancy chocolate boxes, car interiors…
It all needs oil, and so far, although there are bio alternatives, nobody is really making moves to change that, so even if we stopped using it as a fuel overnight, it would still have a high demand, dwindling supply and therefore rising price.
FlimFlamMan
“It’s not that Scotland is or will always be dependent on oil, it’s that Scotland will be dependent on oil revenue if it enters a currency union or pegs to sterling. More to the point it will be dependent on an external surplus that matches or exceeds private sector net saving. It just so happens that in Scotland’s case the largest contributor to the existing surplus is oil. It’s the peg/union situation that creates a dependency on external surpluses.”
A pretty poor response that makes little sense. Scotland will not be reliant on oil revenues if it enters a currency union or pegs to sterling. I have no idea where you invented this from. It has a well developed economy that is hugely better balanced than the UK economy with or without oil revenues. Stop the bluff and bluster.
Sterling (and by extension the UK)is however over reliant on oil and gas revenues and to block Scotland and its oil and gas from a Sterling currency union will have deleterious effect on the balance of payments and Sterling rating. This would harm rUK (but also probably Scotland initially)
@Croompenstein
A right which is absolutely yours, and which is respected by any vaguely decent human being. I’m ignoring twitter.
@Thepnr
I’m not saying the oil isn’t there, I’m saying that if we, as a species, are going to deal with climate change we can’t burn it. At least not all of it, and not new fields.
So, can an independent Scotland prosper? I’ve said that a currency union or peg will cause problems in time, but I think that with the right policies Scotland can do significantly better then either the UK or rUK. Policies like:
1) A new Scottish currency pegged to sterling.
2) Investment in engineering, focused on renewable energy. Investment in education and health etc. as well of course, not Trident.
3) A plan to float the new currency before the external balance shifts.
With something like that to build on I think Scotland can set a positive example not just for the rUK, but for the entire planet.
@Caroline Corfield
Absolutely, there are other uses for oil, but most of it gets burned. If Scottish reserves are left in the ground as part of a major switch to renewables then there’ll be plenty left to provide for those other uses for many decades to come.
FFM
Do yourself a favour and go to bed. Maybe tomorrow you arguments will make sense. Right now? I still think your blethering.
@Thepnr
“go to bed”
I am going to do that very thing. I began replying to Dave but I can see it’s going to expand to ridiculous proportions.
FFM
Don’t try and kid a kidder. Vote Yes, your short time here must surely have convinced you. If not I weep for you.
To Bill McLean, Cearc, Dave McEwan-Hill, thank you for a sensible and well put response to my comments, they were all informative and reasoned and I respect that.
Rev. I did read the rules and to quote “..by all means disagree, by all means disagree forcefully – but argue with people’s views, don’t insult them personally.”
So, I’ve been called arrogant, a Troll, had my Welshness questioned and the biggest insult, being mistaken for a labour MP!
I actually thought your rule 1 was most accommodating, “Write as if an undecided voter is reading.”
If asking straightforward (albeit ill-informed) questions is to be considered hectoring and arrogant (thanks ‘Cymru Rydd’) then as ‘tartanarse’ suggested, I’ll quit while I’m ahead and leave you with one last extract from your etiquette guide for others wh bother entering this forum with open minds and unanswered questions;
“Fewer than 1% of the site’s readers post comments. That means the comments give you an inaccurate picture of the overall readership, and things that might go down well within a small group of dedicated activists don’t sound so good to people who’ve come to the site looking for information to help make up their minds.”
I came, I questioned, I got slated for lack of knowledge, cheers!
I sincerely hope the vote goes your way, I am no more informed than when I joined, however I will download the white paper and see what it says, but I don’t get a vote so what does my opinion count for anyway? Good luck later in the year.
Alun, I think he’s talking about your cavalier way with paragraph breaks. Formatting is a hot-button issue around here.
And honestly Alun, you start your first post by asking why we want to keep “the English pound” and you’re surprised that some people think you’re trolling? Supposedly coming from a Welshman, that one is jawdropping.
Also, this weird idea that what we’re proposing isn’t enough independence is another big warning light for trolls. We understand that we live in an interconnected world in the 21st century, and we don’t seek the isolationism of North Korea. We also understand where those of our compatriots who favour some sort of devo-max settlement are coming from. Westminster will never grant such a settlement before hell freezes over, but we can allow that aspiration to inform our perceptions of an independent Scotland’s relationship with what’s left.
The Better Together ploy of sneering at the independence proposals as “not enough independence” and thus implying that we should vote No is well enough known, and comments seeming to take that line are liable to be lampooned.
Independence just got a whole lot likelier this week. Things will go a lot more smoothly if our friends in England, Wales and Northern Ireland try to understand our actual position, rather than entering the discussion brandishing their own misconceptions and expecting these to be the basis for the conversation.
@Alun D
Just watching the conversation on BBC about currency union. The arguments are laughable on both sides. Get it into your head that at the end end of the day currency is only 10th in a list that voters care about.
Some American prick has just described Scotland as “such a small country” hahaha. Who cares? we are a Nation.
Scotland 1-0 Osnorne
Well said Morag.
United we stand.
This shows the real very OPTIMISTIC way Scotland should be looking as an Independent …
From a VERY highly regarded economic commentator (the most watched show in the world I hear)
link to rt.com
No need to weep Thepnr, I was convinced Yes was the right choice before I started posting here, and if I’ve moved before the referendum that’s how I’ll be voting. It’s only the first step though.
@Dave McEwan Hill
I didn’t invent it, it’s sectoral balance accounting and the difference between being a currency issuer and a currency user.
Split a nation’s economy into three: domestic private sector, national government, and external sector. If the rest of the world exports more to us then we export to them it runs a surplus against us, which means we run an external deficit. That ROW surplus, a deficit from our point of view, has to be balanced by the remaining sectors; one or both of them has to run a deficit.
The private sector typically net saves; it spends less than it earns, so it’s running a surplus not a deficit. That just leaves the government; it has no option but to run a deficit because the overall accounts always balance.
That’s the accounting. Now the difference between currency issuing nations and currency users, which is that currency issuers can always fund their deficits because they are the source of their own spending. Currency users have to acquire that currency externally before they can spend it, and that’s where the dependency on exports comes in; it’s how Scotland — or any other nation which doesn’t issue its own currency, or pegs to another — would acquire the currency it uses.
Lose the net exports and being a currency user rather than issuer becomes a millstone, as the net importing Eurozone countries have discovered. They tried to eliminate their deficits but largely failed, and to the extent they succeeded they inflicted damage on their economies and people. The deficits they still run are being funded and/or guaranteed by the ECB, accompanied by forced austerity and further damage.
Just to be clear, I’m not saying Scotland would be in the position of those Eurozone nations, I’m saying it would be dependent on net exports in order to avoid that position, and even then only if it enters a full currency union or pegs to another currency. A floating Scottish currency with debt, if any, denominated in that currency removes the problem.
I tried posting a link before but it seemed to go into moderation and never come out, so if you want the accounting equations that back up what I’m saying try a web search for sectoral balances, or better yet search for Professor Bill Mitchell. He writes at ‘billy blog’. Oh, and there’s an e-book by Warren Mosler that’s free to download: The 7 Deadly Innocent Frauds of Monetary Policy. It’s a good place to start.
Got a question
BoE reserves back up a currency – we would receive a share of them if we split?
Is it not possible to have our own lender of last resort but still use pound?
you will have to bear with me – getting your head round all this stuff isn’t easy
Sandra
The Bank of England has its own foreign exchange reserves, and it also holds the foreign exchange and gold reserves of the UK Treasury. Broadly speaking, they are used to manage fluctuations in foreign exchange and interest rates, and, in the case of the BofE’s exchange reserves, in applying monetary policy.
None of it actually ‘backs’ the value of sterling though. In the Bretton Woods system, which ended in 1971, the US Dollar was backed by gold, in that holders of Dollars could demand gold in exchange for their bills, at a fixed exchange. The other currencies in the system were backed by the US Dollar, and holders of those currencies could likewise demand exchange at the fixed rate. The currencies were convertible into that which backed them.
Modern currencies are almost all non-convertible; all you can get in exchange for a £5 note is another £5 note. That sounds like a recipe for disaster, but in fact the Bretton Woods system, and gold standard systems in general, impose too many constraints. The floating rate system in place now gives nations greater flexibility in filling spending gaps when national output moves from surplus to deficit, and as changes in economic capacity and competitiveness take place, which they always do.
Now, although modern currencies aren’t backed in the old sense, you can think of them as having backing in another way. In the first instance demand for sterling is created by the fact that it is needed to pay taxes. The fact that people need it, and know other people need it, drives further demand. The ‘backing’ for the currency’s actual value comes in large part from the overall economic capacity of the nation, how much currency is created, and whether or not that currency increases economic capacity. Nations also use their foreign exchange reserves to adjust the value, as I mentioned.
Having said all that, yes, in any fair negotiation Scotland could expect to get its share of the existing foreign exchange reserves. It could also use sterling and run its own central bank, provided it could acquire sterling via trade. I’ve talked about that before.
Yeah, economics gets worse the more you look at it, until the light bulbs start pinging on. Unfortunately, that’s when you realise that a lot of it really is awful. After the crash I started educating myself, and some of it seemed insane; “currencies backed by nothing? endless government deficits?”. Common sense says it must be rubbish, but common sense is often wrong.
thank you @FlimFlamMan
that was really really nice of you to take the time to explain to me
economics gets worse the more you look at it
I went to a website called economic help and this is what they said about our 1.6 trillion debt
One argument says that an increase in the national debt doesn’t cause any problems. What happens is that by borrowing we merely enable the present taxpayer to enjoy a higher disposable income now rather than in the future. A cut in the national debt, would mean higher taxes now, rather than later. Therefore, national debt is just a way to spread national output amongst different generations.
When I read this I felt more than a little uneasy – really don’t think spend spend spend and future generation can pay for it is good economical advice to be teaching anyone :-0
Mabye I will try a different website to learn from 🙂
Thanks, but be careful. If you look up the thread a little you’ll see I’m only too happy to prattle on, or blether, even when people don’t want me to. Who knows what will happen if I’m encouraged.
The vast majority of what you’ll read online is, unsurprisingly, standard mainstream economics. The sort of economics that provided justification for fraud prior to the crash, failed to see the crash coming, was stunned into silence when it happened, though sadly only briefly, and has for a while now been denying any responsibility for it.
I have a very low opinion of mainstream economics.
If you’re trying to work out who to believe, it’s a good idea to look at what people were saying back in the 1990s and early 2000s. If they were predicting what did in fact happen beforehand, then that’s a good start, especially if they went into detail about mechanisms. Many of them write blogs with varying levels of technical depth. I mentioned a couple in my comment just above your question.
In general, the Post Keynesian school seems to have the best handle on the way economies actually work; the MMT economists in particular.
On the question of national debt, it is a problem if it is denominated in a currency the government doesn’t control, either because the nation doesn’t have its own currency, or it does but has issued debt in some other currency. I’ve talked about this before, and Fiona has today as well, on another thread. I forget which one now but it shouldn’t be hard to find; she has some good things to say. UK debt is now just under 100% of GDP, but in the 1950s it was over 250%. Fiona mentioned 260%. Either way it wasn’t a problem since the UK had and has its own currency.
If that was the way things worked then no, it would not be good. Fortunately it’s not how things work. It sort of kind of was how things worked back in the 50s, with the constraints of the gold exchange standard, but even so debt at over 250% of GDP did not wreck the UK economy.
Mosler’s 7 Deadly Innocent Frauds e-book is an excellent start.
Mosler’s 7DIF can be downloaded free here:
link to moslereconomics.com
As a half-Scot living in Yorkshire I wasa until recently pro-Union but no Tory.Your discussion has convinced me of the rightmess of the ‘Yes’ vote-my only regret is we Northern English an’t joiin you.You have also convinced me of the sheer evil of this Tory regime.I fear England is not ready for independence yet and unlike your great country faces a dark future.Thank you so much-I shall miss you.
The articles quoted – Deutsche Bank, WSJ, ASI etc, say that a pegged currency or just using sterling will work. That makes sense, and is in Scotland’s control to deliver. But Salmond is still insisting there will be a currency union, which Osborne and the other UK leaders have made clear they will not agree to. They raise good points about why currency unions need banking, fiscal and political unions to work, and make clear the UK will not take on lender of last resort risk for Scotland when they cannot control taxes, spending and debt. All very clear. So why doesn’t Salmond go for pegging or just using Sterling?
“The articles quoted – Deutsche Bank, WSJ, ASI etc, say that a pegged currency or just using sterling will work. That makes sense, and is in Scotland’s control to deliver. But Salmond is still insisting there will be a currency union, which Osborne and the other UK leaders have made clear they will not agree to.”
They’ve CLAIMED that, certainly. A Sterling union is the BEST thing for both parties. If the UK declines it, Scotland can use Sterling independently, but will have no reason to accept any debt. Salmond’s spelt that out pretty clearly, though personally I’d still like him to be even more explicit about it. All the same, anyone who hasn’t heard him hasn’t been paying attention.
@Rev. Stuart Campbell
No, it isn’t, and various financial institutions are beginning to wake up to the big problem with it.
Fortunately it doesn’t matter, because as you say Scotland can use sterling anyway without a union, or it can peg a new currency to sterling.
“No, it isn’t, and various financial institutions are beginning to wake up to the big problem with it.”
I’m happy to go with the Nobel laureates, frankly.
@Rev. Stu
I know the working group recommended retaining sterling, but you’ve said yourself that doesn’t require a currency union. Did they recommend an actual union?
On a not unrelated note, the ‘Nobel’ economics prize award committee is thoroughly embedded in mainstream economics, the very same economics that led to the crash and has failed produce a recovery from it. I think simply accepting what a ‘Nobel’ recipient says is paying them undeserved respect.
“I still believe that pegging to the pound is the best option. I don’t think it will take more than a few years before the Scottish and English economies diverge and at point it would be best for both economies to do what is best for them.”
To be honest I am not at all confident that the economies of a separate Scotland and the UK will ever diverge. Put simply the dreadful debt to GDP ratio that exists in the UK, which will worsen at a stroke if they were so stupid as to deny Scotland a currency union thus allowing the Scots to quite rightly walk away from shouldering a negotiated share of this debt, can only ever be reduced by cranking up the printing presses and monetizing it away wrecking the currency of the UK at the same time.
Scotland could quite happily create its own currency and would have little trouble issuing and selling its own debt in the aftermath of a separation. There is no barrier to this at all, it might be an idea to peg this new currency to the SDR to send a signal to the markets that a Scottish currency has store of value. At the same time it would be possible to set interest rates at levels that encourage saving and do not penalize small and medium sized businesses.
But things would have to change in the area of financial services to avoid the kind of disaster that confronted so many nations in the aftermath of 2007-8.
Banks would need to have firewalls between the riskier investment activities and the retail activities. By doing this it might even be possible to increase the deposit guarantee ceilings that would make Scotland an attractive proposition for UK savers that are fed up to the back teeth with miserable returns on their savings given by UK banks.
Let’s all be honest about this, the austerity that has been humped at the doors of the underclass and is in the post for the working poor, the middle classes and eventually the pensioners; will never be sufficient to bring the ratio of total debt to GDP to sensible levels.
This is not just a lesson for the Scots and the UK it is a lesson for all advanced economies to absorb.
Alun D, I suggest you read your history with a little more care. The Union was not about wiping out Scotland’s debt, it was about bailing out the Scottish landed aristocracy’s personal debts to the towns and securing England’s northern border. In fact, Scotland (until then debt free) took on a share of England’s large national debt.