Why there will be a currency union
A reader this morning pointed us to an article by the arch-Unionist blogger and pundit Professor Adam Tomkins, who we must once again emphasise in the interests of clarity is almost definitely NOT the gentleman in this picture:
It was a piece from a few weeks ago about the currency debate, which the reader felt made a reasonable and “quite convincing” case, so we went and had a look.
It’s easy to see why the unwary could reach such a conclusion. The professor uses all of his academic skill to make his points eloquently, and makes hay out of highlighting some of the sillier pronouncements that have come from some Yes supporters, such as the notion that the Edinburgh Agreement compels the UK government to basically do whatever the Scottish Government wants in the event of a Yes vote.
But his wider argument is complete drivel, deliberately disingenuous, built on a number of frankly absurdly false premises, and more to the point on completely ignoring the enormous trumpeting elephant in the room which is the real reason there WILL be a currency union, no matter what anyone says.
Rather than pull every dishonest and misleading line and paragraph apart one by one, then – which is always fun but results in enormously long posts that lots of people can’t be bothered wading right through (especially when the source material, in this case, is a whopping 4400 words long to start with) – we’re just going to sketch you a quick picture of the elephant.
The image above comes from this BBC page. It depicts the UK’s GDP growth figures before, during and after the economic crisis of 2007-2009. As you can see, it shows that at the absolute depth of the recession, the UK’s growth was as low as -2.5%, for a single quarter. For most of the crisis, the recession was much shallower than that – the average figure across the five quarters was just -1.46%.
Yet those 15 months of modestly negative growth wreaked a havoc on the UK’s economy the likes of which it has never seen in peacetime.
The country’s credit rating was downgraded. House prices collapsed by close to 20% in a single year. Unemployment shot up. The Bank of England had to create hundreds of billions of pounds in imaginary money to prevent the total implosion of the financial sector. Wages were cut or frozen, leaving millions of families worse off as pay failed to keep pace with the rocketing cost of living.
Even though the recession officially ended in the middle of 2009 (there have been a few blips of negative growth since, but none that lasted for two consecutive quarters, which is the technical definition), the brutal austerity the coalition government implemented will outlast it by at least a decade.
The unprecedented carnage unleashed on public services since 2008 – and remember, more than half of the government’s planned cuts are still to come, with Labour committed to the same cuts as the Tories if they get in next year – was, then, brought about by just one year of single-digit negative growth.
If Scotland votes Yes in September, the UK will lose almost 10% of its GDP overnight. Not just for a year, but forever. Billions of pounds a year in oil revenues, billions of pounds from whisky exports, billions more from other industries like tourism and videogames – all areas, crucially, in which large sums of money enter the UK economy from overseas, boosting the UK’s balance of payments.
If the UK refused a currency union, Scotland would have no reason whatsoever to take on any of the UK’s debt, and the UK would have to face the same crippling debt mountain that’s causing the horrific austerity now, but with its economy hacked off at the ankles. If the current nightmare came from a brief single-digit recession, you don’t have to be an economist to imagine the apocalyptic effect of a permanent 10% one.
Of course, losing Scotland would reduce UK spending too. But as we already know – by the UK government’s own admission – that Scotland is a net contributor to the UK economy and has been for decades, if not centuries, it would still represent significant damage. And much more important than the size of the damage would be the nature of it, in the shape of the foreign currency Scotland disproportionately brings in.
The combined effect of the broader deficit and the balance of payments one would inevitably be a further downgrading of the UK’s credit rating, leading to increased borrowing costs and a vicious economic spiral. It would, in short, be a catastrophe that would make the 2007-09 recession look like a picnic.
That’s why so few people actually expected George Osborne to categorically rule the currency union out, and why it was such a surprise when he did. Even the suggestion of it ran the risk of spooking the money markets, who would be utterly terrified if such a policy ever came to pass, but the No campaign was so unnerved by its narrowing poll lead that Alistair Darling – also stung by personal criticism for running a lacklustre campaign – forced the move.
The markets had to be placated by a Treasury announcement that it would guarantee the UK’s debt alone, and combined with the fact that the No camp is still in the lead they haven’t yet panicked. But a Yes vote would shatter that calm, and the refusal to undertake a currency union wouldn’t survive 24 hours.
But why would Scotland agree? Superficially, an independent Scotland would be a big winner from rejecting the UK’s debt in retaliation for being refused a share of Sterling. It would almost certainly have to pay higher rates for borrowing than the UK does now, but without UK debt repayments it would barely need any borrowing, and so would be easily able to afford slightly higher interest on it.
The only problem for Scotland, and the reason the Scottish Government doesn’t just openly come out and say “We will absolutely not accept a penny of UK debt without a currency union” (although it hints pretty strongly at it), is that with the rUK being by far Scotland’s biggest trading partner, if the rUK economy went down the toilet it would drag Scotland with it.
The upshot is that neither nation can afford NOT to be in a currency union. It’s a mark of Prof Tomkins’ fundamental mendacity that in an article on the subject four times the length of this one, he completely skirts that most crucial aspect, and instead takes potshots at endless straw men in an attempt to distract the reader from the real issue.
As he’s a Unionist, however, he gets to be on the telly and we don’t, so you’ll have to send people here if you want them to know the reality. Because the reason the polls are narrowing is that once people discover the truth, like an elephant, they never forget.
Is that an image of the latest pro-unionist grassroots group to be officially launched by the BBC and fellow London Tory millionaires called “We’re A’ Jock Tamson’s Borders” by any chance?
TeamGB is not that much of economic madhouse though. That lad in the union jack suit’s actually the Queen’s estate agent and he’s just snapped up a nice but unfurnished flat on Hyde Park, London town for only £140 million. The Queen will be thrilled as its a christening present for Prince George. My Nana gave me a tenner premium bond. Rule Britannia
What is not really understood about the GDP figures that it actually includes, I think, the Helicopter Money stuffed into the economy by electronic creation of debt, giving to the banks, who then sat on it it help try to reliquidise their treasuries.
If I have misunderstood this I am sure someone will help me out.
The UK is in deep doo doo. The asset value of Scottish oil, £ 1 to 4 Trillion is what keeps the UK able to borrow abroad.
No assets, no collateral, poor risk assessment.
Mind you, it would not be in the Scottish Government’s interest for the £ stg to tank as we export lots of raw food products to England and import lots of processed foods from them.
A collapsing £ STG could spark a mass migration to Scotland beyond what we could absorb or support.
In the Royal Society of Edinburgh video on currency and tax, John Kay mentions that it is the fact that the pols are showing NO in the lead that is keeping the present situation stable. Any advance of YES, will send the markets spinning. Some agreement may well have to be reached long before September.
Some argue that the rUK balance of payments would be good, due to exports to Scotland. Of course, they also predict economic disaster for Scotland due to no currency union. I’m not sure how they expect those exports to be unaffected. Hmmm…
Rev, Tomkins also has another on the surface reasonable and positive attempt at a case for the union. Mostly opinion stuff and very objective. But there’s one part I’m particularly interested in, and I think could be refuted – I’m just not sure where to find the figures to do it.
It’s this argument
“Fully 70% of Scottish exports are sold to the rest of the UK. Just pause there for a moment: Scotland trades more with the rest of the UK than with the whole of the rest of the world put together. Scotland’s trade with the rest of the UK is worth four times her trade with the EU”
Now that may well be true (though kind of irrelevant with the EU). But it’s also true that the UK as a whole doesn’t generally export much from Scotland, because we don’t have the facilities, which means exports from Scotland go over the border and are exported from ports in England. So I’d really like to know how these figures are made up, and whether any account of that is taken at all? Or do “Scottish export outside the UK” figures end up being massively under-stated because the goods we send to England for export can end up being counted as “trade with rUK” and included in “export from England” figures?
To give just one example, whisky makes up a huge percentage of UK food and drink exports, so that alone, if it’s all on Scotland’s accounts, should be a huge amount of overseas exports. Then there’s oil and energy and no doubt other things that the UK no doubt take for granted and which they’ll still desperately need to keep flowing south, but which we also presumably export.
It could be an interesting area to have a dig around and really look into, to see whether the amount given for “what Scotland exports abroad v what goes to rUK” is fairly stated or massively under-stated as a result of where the export ports are based in the UK.
Sorry, meant to link to the article. It doesn’t give any hint at all where the figures come from.
link to bettertogether.net
Rev, I think what you have just highlighted could be, perhaps, the most significant piece of journalism of this campaign.
But what’s Plan B 🙂
The charitable side of me wants a currency union as I would not like to live in the rUK and suffer from the results of not having one.
The uncharitable side has a kind of “hell mend them” attitude.
I’m as certain as can be though, that since it is so obviously in both Scotlands and rUKs economic interest then common sense will prevail. The only reason I’m not 100% certain of a currency union is that I have these doubts about Westminsters capability for acting with common sense.
For those given to feelings of uncertainty, and inclined to a mind set of “Aye but maybe they are right about North Sea oil being in decline”, well have a look at the 1st May edition of the Shetland Times reporting on oil reserves on Scotland’s west coast.
Oh if only I was 20 years old again.
You have to ask yourself why Billy Whizz didn’t get Prof Tomkins to write the FO’s justification for rUK being the continuing state. Scotland would not only have been erased but obliterated so we would have no existence in law and therefore couldn’t vote.
You can see why that nice Mr Grayling wants to cut down on the subsidies and feather-bedding of the legal profession in England.
There is growing awareness that their scare tactics are just that. The sterling options open to Scotland are also known, what is not, and rightly the SG are holding it tight to their plan B.
Westminster is worried about that, and it is the reason that ALL the Unionist Parties AND the MSM are desperate to find out. SG says they are only considering the CU option, but have said that they do have a number of these.
This sends shivers down back and into the pocket of the Unionist Elites. SG are playing a very good game, and I would say a CU is a certainty, Westminster when considering this article, HAS NO CHOICE!
@Cath that’s a really interesting argument and fits nicely with WM dodgy accounting that makes it difficult to pull out Scotland only financial data.
Personally, while a sterling union, official or otherwise, is prob desirable initially to avoid scaring the horses, I think we need to escape the financial blast zone of likely sterling collapse ASAP. The housing bubble based around Russian oligarchs can’t hold forever. A RUK EU exit will wreak havoc on sterling and we need to be well clear when that happens.
If a sterling collapse occurs after an EU exit, where will RUK refugees be able to go – would European migration be closed to them?
Cath: it’s a good question, but unfortunately one I wouldn’t know where to start looking for the answer to.
One thing that George Osborne did was rule out a current Union with the current conditions. He did not rule it out it its entirety – He left that one to Ed Balls as Ed will not need to make any currency decision in 2015 or 2016 he was able to say that he would not allow one – which leaves George Osborne with a message to the financial sector prior to the 2015 election. Vote Labour and lose Scottish business, the pound will be de-valued, you cannot trust Labour.
Labour have been complicity stitched up.
Project fear is pretty heavy though and it’s everywhere you look too. Here in Aberdeen vote no or else P&J says vote yes and your borrowing costs will rise. Ed Davie the Libdem liar energy. Minister, says England will simply refuse to buy Scotland’s renewable energy, or as he puts it, England will refuse to subsidise Scottish green energy growth. And that’s just one day in one week, from a couple of project fear liggers going at it daily in the BBC and the incredible no team at the Press and Journal.
‘70% of Scottish exports are to UK.’ I suspect most of that is either to a Head Office/Parent company address or to a middleman.
Forgive me for being off topic, but the funding for the completion of Jack Foster’s film has only put on a few miserable £s in the last few days.
Come on people!
We can do better than this. Is a vital project to raise the profile for Yes.
link to indiegogo.com
A downsides of the Referendum debate is, it’s given an excuse for every mediocre, half-baked biscuit to jump up with a shovel full of garbage to get their fifteen minutes of shame- sorry, fame.
They remind me of goons and goofballs who slope up behind a location reporter as he’s recording his piece and start making faces and prancing around to the camera.
And hence the all out media attack for the last two weeks on all aspects of indy and Salmond himself, due to the narrowing polls. The Unionists cant afford YES to reach parity, never mind go in front as games a bogey. Its important for them and the markets, that YES is behind and its seen as just a minority Scot Nat thing.
The favourable polls for NO are very important for the stability of the UK.
Cath says
Cath you are very right to post your article it is something I have thought about and have asked questions about in the past. I have yet to find any conformation of just how all of Scotland’s exports exiting from UK ports are logged and identified. They will be taken as UK exports not specifically Scottish, that is already rigged.
But there must be something available, for it is something that Westminster will be aware of, just we are not allowed to see it. If available it would put further fuel on the fire of Independence.
@ Red Squirrel
You can take it that all Scotch exported outside the UK passes through English ports and thus English region exports.
If it gets to the stage the rUK pulls out of Europe I am sure that the City of London will manoeuvre to get into a position to become a City State, like Singapore.
I forgot that Heathrow exports a a lot of high vale low weight freight. I guess that a lot of electronic goods, instruments, medical stuff passes via Heathrow,
Had a look at the Prof’s vote no thing and holy shit, can anyone be a Professor and how many countries use the euro now?
“But, for the UK to use the dollar in this way — or for an independent Scotland to use the pound in this way — would have massive drawbacks. (Just pause to wonder: why is it that so few states in the world use the currency of another state? Why is it that most states in the world prefer to have a currency of their own?)”
“Fully 70% of Scottish exports are sold to the rest of the UK”
Cath
That’s why the other day I mentioned New Zealand’s old relationship with the UK.
We used to be their main country of export, with a figure close to 70%. When Westminster decided Europe was a better place to trade New Zealand and its wool (Marino sheep) and butter got dumped. They protested, of course, but found new markets quite quickly.
The observant will notice New Zealand survived and prospers.
Saying all that,once Scotland is free to deal with other sovereign nations one to one,other markets will open up. Right now of course,we can’t even attend meetings concerning us and uk rep will always ‘read the wrong paper’.
Other markets are available,invisible guiding hand and all that economics stuff.
As I understand it from some considerable reading, a currency union can be anything from a 685 page document with clauses, sub-clauses and thousands of conditions, to a single paragraph along the lines of:
“The rUK will aim to stick to an annual deficit of no more than 10%, and its debt to GDP ratio should not exceed 104%. Scotland will aim to stick to an annual deficit of no more than 9%, and its debt to GDP ratio should not exceed 90%. Any breach of this may cause either party to terminate the currency union agreement. These target figures will be adjusted with agreement on an annual basis.“.
I suspect something more like the latter will take place. The alternative is an informal currency union, in which case Scotland can screw up the Pound, perhaps by raising its value, but the rUK has no recourse nor control.
In the case of Panama it is considerably smaller than the US, whereas Scotland represents 10% of the UK and therefore 11% of the rUK economy with a correspondingly higher affect. If the choice is for Scotland to go for sterlingisation, the rUK would be very foolish not to go for a formal currency union, even with minimal terms and conditions.
It’s not worth persevering with this nutty professor but he says
“Suppose that the oil price crashes (and it is notoriously volatile): any shock to the economy would have to be absorbed by putting taxes up or cutting public spending.”
If Scots oil is notoriously volatile, is there any product in the world that can be so accurately forecast valued and just by checking Brent crude oil prices?
link to tradingeconomics.com
Brent crude price history is an almost perfect s curve on a $110 average, with 5 bucks either way since 1990.
link to ebay.co.uk
I forgot to say that even with a formal currency union both Scotland and the rUK can have their own central banks, with an overarching central bank to take care of the external currency. This seems to me to be the ideal set up for Scotland, as it allows us to build up our own CB function in a fiarly lesiurely fashion, and be ready to deaprt from a currency union in a totally controlled and staged fashion. For the rUK, I daresay the BoE wold perform both functions.
@Adrian B – that’s a really good point and one I hadn’t picked up as I thought they were ‘all singing from the same hymn sheet’.
If you are correct, then it just shows that Ball’s is an idiot and maybe Gideon is brighter than I thought – although since he is in government and not Ball’s, then the civil servants are working with him.
I’ve pointed this out on various BLCs that Gideon said the currency union is not acceptable ‘under those conditions’ cos they want the SG to sign up long term.
And if I as an ordinary punter could see that then so could all of those financial ‘experts’ on the BBC – so yet more lies from the state broadcaster.
Yes, but if Scotland is in a CU with rUK and rUK’s economy goes down the lavvy anyway (quite likely, by the looks of things) where does that leave Scotland? Dragged down too?
The answer might be to use the CU as an interim measure and exit the CU before the dung hits the fan in Toryland, but that’s much easier said than done. It might also be a very brief interim measure.
@Cath
Business for Scotland might be able to help you out.
link to businessforscotland.co.uk
“uniontwat3.jpg” LOL!!!!
Good article Stu, keep en coming!
Personally I don’t want a currency union. I’d have happily accepted it (as I’d have accepted devo-max or federalism had they gone far enough). But the idiocy and political use of it by Westminster has put me off. We’ll need to use Sterling for a transition period, I suspect. Or if we have a Scots pound (which we kind of already have anyway now – it’s not even legal tended and has to be backed on issue with Sterling reserves at the BoE) it would have to be pegged 1-1 with Sterling for a while.
Our economies are obviously close enough because we’re the same country right now. But we should have the freedom of moving on from that whenever it suits and people are ready for it. I’d quite like, when the referendum gets closer, if the Westminster parties are still saying no, for the Scottish government to step in and say ‘We believed, and still do a CU could be negotiated, but in the name of certainty since Westminster is saying it’s not on the table at all, we will now take them at their word and remove it entirely from our own negotiating position. This is our plan B and this is what will happen in the event of a yes vote…’ Then make it something Westminster has no say over.
It would be interesting to see how the markets, Westminster parties and unionists would react. Quite apart from anything else, if they’re not brining a CU to the table in negotiations around debt – not to mention trident etc – what are they bringing?
It wasn’t “a single year of negative growth of less than 1.5%.” Average of 1.46% over 5 quarters is a total of 7.3% negative growth. I agree with your central argument but unless I’ve miscalculated this is a bit off.
@cath
to add to the mix, sticking with whisky: what is the situation about companies like Diageo. They are HQed in London but after Independence would they not have to have a representative office in Scotland? When they export whisky from Scotland, where is that recorded? Is it a “London” sale, or a Scottish sale? Where would the sale be subject to taxation? Would it be a Scottish expert or an inter-company sale?
@Tony
That’s like the few exports I do to the US via Fedex. Small beer, but it all adds up. Is that recorded in Scotland (Ayrshire), or in the UK / England / Essex / Stansted for the airport Fedex fly out of (used to be Prestwick)?
Cmon people lets put this one to bed THEIR ISENT GOING TO BE MASS IMMEGRATION to Scotland THE FEKKING HOUSES ARENT THEIR and fuck westminster and its debt,i would love a bit of Scottish beef looking forward to the day i can buy it at a resnobal price you know when all the rich english cant afford to buy it any more.NO CURRENCY UNION THEY HAVE HAD ENOUGH OFF OF US now FUCK OFF WESTMINSTER.
@Iain Taylor (not that one):
The idea of a CU as a temporary measure is good – though whether it should be put forward as a temporary measure is another question. It would at least give Scotland a breathing space in which it could set up its own currency. As Standard & Poor’s have said:
“…with a GDP (including North Sea oil output) only slightly below that of New Zealand, a developed economy and developed financial system, there is no fundamental reason why Scotland could not successfully float a currency”
The full S&P article (which comes with the disclaimer that the views expressed “do not constitute a rating or an indication of any potential Standard & Poor’s rating on an independent sovereign Scotland”) is here:
link to globalcreditportal.com
The recession was the result of the financial crash, not the cause or it. It was purely a symptom.
Credit dried up as a result of a collapse of confidence and more importantly asset values. Growth reversed as investment dried up as credit which was fueling the growth stopped and people, companies and the government looked to sort out their balance sheet(balancing their own books).
While I think there will be a currency union on the table, I’m not sure what the price tag will be. The loss of Scotland to rUK will be huge but it won’t be like a recession or 10% negative growth depression where growth drops.
A company that divests a unit or subsidiary does not suddenly become bankrupt because its income drops.
The only caveat will be if they have been cooking the books so well that it falls apart once the splitting of assets analysis starts.
They’ll wheel out another Professor soon to say Scotch is too volatile and then another one who’ll say Scotch is in fact owned by the UK, so vote nyet. Mind that angry Prof that Jim Naughty broadcast from R4 to anywhere who said Scots oil was UK oil only and voting yes would trigger war in Africa? Ivory towers must be such a hoot these days.
link to shetlandtimes.co.uk
Let’s dispel once and for all the myth that the oil is running out. This might be true for the North Sea but it’s certainly not true for the Atlantic margin. In fact there is a field off Campbeltown that as some like to say is “shovel ready” and the only thing blocking it going into a production phase is the Ministry Of Defence, because it will interfere with them playing with their nuclear submarines.
Last Saturday’s Althing debated Scottish independence and I raised the question: “How many of those present were aware that last year the Westminster government sneaked out an invitation to oil companies to bid for 2,500+ exploration blocks between the Scottish/Faroese boundary and the Scottish/Irish boundary?”
I asked this directly to the “incredible ‘no’ men” on the panel, namely Alistair Carmichael and Ian Duncan, and quelle surprise, they ducked the question and did not answer.
Over the last 40 years preliminary surveys have shown that there are huge reserves of oil/gas to be recovered; in fact one of the largest oil/gas basins in the world lies off Lewis. Some oil men conservatively predict that in these western fields there are greater reserves of oil/gas than the whole of the North Sea, including the Norwegian sector and the gas fields of the southern North Sea put together.
If we are not careful we will be done out of our natural resources in exactly the same way as happened after the McCrone report in the 1970s
Just confirming that the gentleman in the picture isn’t Prof Tomkins, but some resident of the Falkland Islands voting during their referendum
link to lifedaily.net
Classy poster in the car window.
Cath @ 12.56pm (and others) re: Scottish exports
I’ve been led to believe that much what Scotland “exports” to the rUK (usually England) is then re-exported through English ports and airports to the rest of the world – and reclassified as UK (or English) exports in the Westminster books.
For example, the English don’t drink all that whisky that’s “exported” from Scotland to England. It’s then re-exported to other countries where they actually consume it. That’s one of the problems with UK figures, and Rev Stu pointed out that it’s difficult to find proper data and untangle the whole thing.
But just imagine. An independent Scotland that had all it’s exports properly on its own balance sheet.
On a lighter note.
Tsk tsk, Rev Stu.
Only a couple of days ago you poked fun at the Telegraph for always using the same photo of saltire-faced jimmy-hat-wearing Scots but I think you’ve used that photo before, for this professor and Ian Murray (the Edinburgh South MP so scared of stickers).
– – –
Oh, did a search. This photo has only been used twice, both in connection with prof Tompkins, with the caveat that it isn’t him on the photo. (This article and link to wingsoverscotland.com )
The Ian Murray one, which has some striking resemblaces, on the other hand, is a genuine photo of him ( link to wingsoverscotland.com )
UKIP said it would keep the Scottish Parliament in Edinburgh but “replace MSPs with Scottish Westminster MPs”.
I thought labour MSPs were Westminster MPs
The article simplifies very nicely the salient points and makes the understanding of it all easier.
Once a YES is delivered mutual interests will prevail.
O/T
Footie links free streaming posted off-topic.
Aberdeen v Celtic or Pars v Gers.
I’ll be watching Aston Villa
Have any of you read the document issued by Sir Tom Hunter’ s website? Scotlandseptember18.com “Currency Options for an Independent Scotland.” by Leslie Young, D. Phil.(Oxon) Professor of Economics, The Cheung Kong Graduate School of Business, Beijing.
G Ponsonby has done a resume on Newsnetscotland.com
It is 21 pages long- with the usual repetitions – but he makes the case for a currency union and is totally scathing of the Westminster Government’s actions so far.
Maybe someone on Wings could have a look and share their views. I am no economist but feel the author is of a Unionist bent and although scathing of W M’ s actions so far,lays great emphasis on the probability of things going wrong with the Scottish economy than rUk. I would be very interested in other people’s opinions.
Wilma Watts aka memaw.
I think if we vote Yes and John Swinney starts counting the beans flying into the Scottish Treasury, he’ll say “Hauld oan the noo, we’ve got way mare beans than the UK Treasury declared, we’ve been getting bumped big style”
Maybe that’s just one of many Westminster embarrassments that will come out in the wash post independence, maybe it will be part of the negotiations “Don’t tell the world what we did to Scotland”
creag : you have permission to use my nom-de-gloom ?
Ya bam.
bookie from hell @ 2.41pm
I thought labour MSPs were Westminster MPs
?? You’re being ironical or something, right?
I thought UKIP wanted to abolish Holyrood and “repatriate” all Holyrood powers to Westminster. It now seems they want to “repatriate” all the Scottish MPs and abolish Scottish representation in the UK parliament. Because we’re better together and all that.
O/T – Just back from the YES. Edinburgh Super Saturday.
Turnout : 250.- 300
Me and my mate Rolf canvassed up to 50 houses in Liberton area.
30% of houses nobody in.
Rest of houses had only three houses for NO.
We are going to win this.
film preview here:-
link to bellacaledonia.org.uk
Someone just left this rather interesting comment on my blog…
The underlying wealth of a nation is based on “securities”. The securities that you hold as a country will dictate how strong that your currency is and at what rate and how much money that you can borrow against these securities.
e.g. .If you own your house outright you can borrow against that “security” as the bank know that they have your house as collateral Securities for most countries are based on gold reserves held or by oil, if you are lucky enough to have that resource.
Forget everything else for a moment and think about this. ONE day after a YES vote everything changes for both Scotland and the RUK. Westminster know this and are absolutely terrified. One day after a YES vote the complete future oil reserves currently under the control of the UK government LEGALLY pass to Scotland and the RUK are left with less than 10% as defined by International maritime borders.
The official handover will take longer but the markets will react immediately.
The assessment of the future oil reserves held in Scottish waters are valued at anything between 1&4 TRILLION pounds!
Maybe never in history have the people of a country had so much power in their own hands. These incredible assets will support any currency that Scotland chooses, will allow the nation to borrow at extremely attractive market rates and support a Scottish Central Bank should this be required at any time in the future.
The RUK‘s fiscal position one day after Independence would be nothing short of a disaster.
Without a currency Union with Scotland the pound will collapse and the credit rating of the RUK will plummet? The RUK will be forced to go to the markets with current debts of 1.4 Trillion pounds just having lost their greatest ever asset and futures securities against their massive debts.
How do you think that they will be perceived?
I would put it to better together that it is they, and not Scotland who need a currency Union and that is exactly what will happen in the event of a YES vote.
Project fear have every reason to be frightened, losing the Scottish contribution to GDP and future Oil securities must be pretty much how the government of the day felt when they lost the American colonies.
Send it to everyone, especially any of the naysayers sites and your MSP!
Get questions asked in Holyrood!
@liz,
If you are correct, then it just shows that Ball’s is an idiot and maybe Gideon is brighter than I thought – although since he is in government and not Ball’s, then the civil servants are working with him.
There is a great deal of posturing and mind games between Balls and Osborne going on and there has been for quite some time. Ball’s is all at sea really – he wanted Osborne to ‘cut slower’ and Osborne has done just that. 60% of cuts still to come and not until 2015. If Osborne had stuck to his original plans then most of the cuts would have already happened. Even under Ball’s plans we would have have greater cuts.
Osborne has managed to convince people that things are getting better (who would not like to believe that), Ball’s is still saying that the cuts are happening to quickly (yet they are slower than he originally wanted)
Osborne has been taking acting lessons – not I imagine for Gideon to enjoy a spot of aperture drama, but rather I suspect so he learns how to answer questions/speak to an audience with complete confidence. The cost of these lessons is being met by the Tax payers which I feel underlines what I have just written.
Also, and this is Off Topic (kinda)
A few months ago I read quite a lengthy report on Scottish Enterprise which was about the oil & gas reserves in the North Sea, most specifically the areas which indicate a strong possibility of having yet unfound reserves, and how these areas cannot be explored due to being blocked by MOD.
I had read it and saved the link, so that I could refer back to it.
Now that link is dead, so I spent hours searching through Scottish Enterprise’s site and could not find a single mention of undiscovered areas of interest, despite the original report saying that they looked at the possibilities on a regular basis.
So I had a wee look at Scottish Enterprise’s Board members. I don’t like getting all Alex Jones, but it has made me raise my eyebrows a bit.
link to scottish-enterprise.com
Hell of a gamble by Gideon and Darling. Prompted by panic no doubt, but it leaves their erses hingin’ oot a windae if the vote doesn’t go their way.
Just how do they square that circle with a public and media in England who’ve happily jumped on the no CU punishment for uppity natives narrative?
They’ll be eaten alive on any reversal surely?
I have been following a bitter on twitter. He is cockahoop about the Moody’s report and has been tweeting himself silly with graphs showing the detrimental position of Scotland over rUK. I font speak finance so can’t be confident in challenging his argument. The one thing I picked up was that Moody’s are using the IFS paper as a basis for their judgment. I thought that showed a lower population growth rate for Scotland compared to rUK. I don’t understand what matching England’s growth rate would mean in terms of actual numbers.
I see he has been arguing with a few yes guys. If anyone wants to dip their toe in the water check out @Dickybeau and look for Neil (his picture shows him in a pink shirt)
Moody’s seem to be saying that UK would be penalised for agreeing to a CU.
I know we’re meant to play the ball, not the man, but the clue is in the name of Tomkins’ blog. He has also said:-
“It’s as an Englishman in the West of Scotland that I offer these remarks on the nature of today’s Scottish nationalism” (his blog, 2nd October 2013).
So his views are written explicitly from a ‘British’ vantage point. “Impartial” when he’s trotted out before media outlets & Westminster committed? Yup…
I understand from Stu’s Twitter posts that Tomkins does not allow adverse comments on his blog. Astonishing. Does Tomkins encourage free discussion & debate amongst his students?
Tomkins’ views on CU & who ‘owns’ the pound flow from his opinion that Westminster obtained on Scotland’s legal position in the Union. Namely, as a matter of international law, England ‘incorporated’ Scotland & therefore has the right to rUK assets & use of the pound. So there you have it : despite the verbiage we’re told about it being a ‘partnership of nations’, Westminster’s own legal view is that Scotland is simply an appendage of Greater England. Better together indeed!
He uses Neiledwardlovat
O/T I see that Better Together’s new ‘grass-roots’ campaign group Vote No Borders has been posting on facebook that their aim is to shut down debate and in particular stop women getting access to information that could lead them to voting Yes.
Unfortunately that post has now disappeared.
Luckily someone took a photo of the post:
link to archive.today
This whole currency union thing is doing my head in. I’m not an economist or a financier, just an ordinary person who has a mortgage and has to live within her means.
Scotland using £Sterling in the transition period seems common sense from the point of view of smooth transition and Scotland but also the rUK. Don’t spook the markets, credit agencies etc. and make life easier for ordinary people and small businesses in both countries.
The caveats I have, is it really in newly independent Scotland’s best interest to be locked in with £Sterling in the long-term? And is it in rUK’s interest to form a CU with a partner that might not stay long-term?
Someone above raised the question of fiscal policy that would have to be co-ordinated between the governments of countries in a CU. My take is that since Scotland’s finances are in a healthier state, the risk is on the Scottish side (i.e. Scotland could be damaged by rUK’s reckless and incompetent management of their national finances).
Currency can be a very emotive issue. My country got its own currency, the Finnmark, in the 1860s when Finland was still an autonomous (devolved, if you like) Grand Duchy of the Russian Empire. Way before we gained our independence in 1917. (Our independence debate didn’t have to address the currency issue, we already had our own 😀 .)
That said, you can see why abandoning the Finnmark and adopting the Euro was very emotive for a lot of Finns, especially the older generation.
I was mildly sad to see the Finnmark go but broadly pro-Euro. I’ve become a bit disillusioned since then. Some countries, like Finland, had healthy economies and were totally honest and open about national finances. Some countries “cooked the books” but were admitted to the Euro for political reasons. No wonder anti-EU sentiment and parties are gaining traction in Finland.
@ lumilumi & @ cath – A bit of browsing came up with this website
link to fdf.org.uk
There’s lots of data but just a casual glance shows that salmon and whisky exports are worth billions and therefore look great in the UK economy statistics. Some surprises there with Ireland being top of the list for importing certain foodstuffs. Have a look at the products and think how many come from Scotland.
@ lumilumi & @ cath – A bit of browsing came up with this website
link to fdf.org.uk
There’s lots of data but just a casual glance shows that salmon and whisky exports are worth billions and therefore look great in the UK economy statistics. Some surprises there with Ireland being top of the list for importing certain foodstuffs. Have a look at the products and think how many come from Scotland.
Working in the Financial Services sector, you get not only a good view or hear of what is going on, but you also get a sense of what is happening …or could happen.
If these institutions all walked, then basically, 50,000 jobs are lost in Scotland in that sector. That means they have to find 50,000 folk in London. Then they have to find offices which will cost 2 to 3 times the cost of Edinburgh (or they may even have to build them). Then they need to transport everything (furniture, paper documents, IT Kit, the absolute works), and then furnish their new buildings. Then they need to train these 50,000 staff. They will need to pay them at least 3 times the wages in Scotland.
But most important of all …and do not doubt this …while all of this is going on, they need to make damn sure that the share price of these institutions does NOT falter, wobble, crash in the very midst of all this ‘uncertainty’ (and it WILL be uncertain). For should the share price wobble in the Financial Markets, then it will affect Sterling. Once Sterling begins to go, you end up with every foreign investor pulling their money out of London, and then we have a vicious circle of sterling collapsing as everybody bails out in a mad frantic dash!
That is why …on the 19th of September …that every Chief Executive; in every major Financial House in Scotland; will phone Georgie Osborne, and tell him in no uncertain terms, to swallow his pride, go live on TV, and tell the United Kingdom, that ‘in the interests of stability in this uncertain moment in time, it is in everyone’s interests that Sterling be maintained in all parts of the United Kingdom until a time of change suggest otherwise’. No nations names will be mentioned, but we will all get the gist of it. This will be currency union.
Lumilumi @ 2.34
You may be interested to learn that Ednburgh Newington Churches are organising a referendum debate next Sunday 11th May at King’s Hall (opposite Queen’s Hall) at 4 pm featuring Labour’s Ian (Union Jacket)Murray MP but did not ask either of the two local SNP MSPs (or any MSP) to speak for the Yes side. I smell a rat.
O/T-12 x ‘leaders’ to work for labour on the Independence referendum……….
I might apply as it doesn’t state whether or not you have to support a no vote, so presumably a Yes campaigner can apply? ha
link to labour.org.uk
@Alexandra-M
Try popping the url into google and see if it is cached.
Apologies if this problem of exports as raised by Cath has been dealt with, but I remember the opening of London’s new Port they said that several others had been downgraded or closed (England) now I do not have any idea of what goes through Scotland’s ports these day but surely we should be looking at stopping exporting through England and building up our own.
As for the raw food to England, processed food back, another job creation scheme in the making.
Surely we have some enterprising businessmen with money to invest.
In the event of no formal currency union, I don’t think it right to say rUK’s credit rating would plummet after a Yes vote. I also don’t think it would be a disaster for Sterling.
I think it right it would not be a negative short term outcome for both Scotland or rUK. As far as I can see most reasonable commentators go along with that.
Global markets’ perception of ability to honour debt and the valuation of individual currencies are based on a variety of things – from historical record, fiscal outlook, national debt, gdp outlook, balance of payments outlook – as well as how each country is perceived to be performing compared to each other. “Outlook” can be a catch all phrase that would include perceived risk, unexpected change and uncertainty.
Economics is not a science, especially when it comes to forecasting the impact of changes. It can be highly subjective and open to political manipulation.
To date two independent international rating agencies have applied investment grade status to an independent Scotland’s sovereign debt. They have raised reasonable risks (as they do for all countries’ outlooks) but still arrived at an overall positive rating.
I guess what I am trying to suggest is that we have enough positive independent, international economic viewpoints and we do not need to over egg our positive contribution to the UK nor the impact of us leaving.
I sometimes think over egging our positive case is almost as bad as the No campaign’s overtly negative claims. Do undecided voters really need to be shown that Scotland is the among the best or worst in the world?
I think it right it would be a negative short term outcome for both Scotland or rUK. As far as I can see most reasonable commentators go along with that.
Typo!
Very good article Rev.
As you say the bottom line is, after independence,in order to keep a healthy balance sheet both Scotland and the rUK, will need to continue trading with each other, in a currency union.We need the rUK market place just as much as they need us, co-operation by both parties is vital.
O/T Meanwhile the delusional ultra unionist and London owned Daily Record actually thinks they had a significant part to play in the Tories, changing their stance on the bedroom tax, in Scotland.
The Canary Wharf ran Westminster repeater, claims their year long campaign on the hated tax, tipped the balance, as if Lord Freud or IDS or David Cameron gave a monkeys about,what Rule Britannia Daily Record thought.
The Daily Record, Scotland’s largest selling tabloid newspaper,is in reality a Fifth Column,printing one thing and secretly pushing another.
link to dailyrecord.co.uk
@Sinky
That won’t matter too much I have seen excellent speeches and answers from the majority of YES (none politicians) people.
Enjoy some of these. There is even a NO event to watch.
link to new.livestream.com
Alexandra M
I believe that the £4 Trillion will be the low end of that evaluation of oil. As time goes by, and oil is consumed, I expect the price of a resource that will get rarer with each season to only rise in price.
Personally, I think we could double it in valuation; especially in a world that will consume energy, and demand it, like never before.
“It wasn’t “a single year of negative growth of less than 1.5%.” Average of 1.46% over 5 quarters is a total of 7.3% negative growth. I agree with your central argument but unless I’ve miscalculated this is a bit off.”
Fair point, I need to go back and word that more clearly.
The whole BT campaign has only one aim. They have set out to muddy the waters and make things seem affy confusing. The actual question is very simple.
Should a country govern itself, Yes or No?
O/T Rev.
This morning on Radio Scotland 8am/10am Lord Trimble was interviewed by Gary Robertson, in which Lord Trimble, said he was furious with the BBC, for saying on the BBC’s NI news page online, that Scottish independence would be a threat to peace in NI, Lord Trimble is a unionist.
I can’t find the Radio interview, on the BBCi player though I,m sure it must be there, however here’s the BBC NI webpage with the comments that offended Lord Trimble.
More lies from the unionist and biased BBC, typical.
link to bbc.co.uk
@JLT:-
You’ve nailed it.
Realpolitik (& realeconomic) will prevail on the CU post-18th Sept.
It always amuses me how BT, particularly Labour, are so entrenched about the assurances Osborne & Alexander have given of “no CU”, when they have spent the last 4 years rubbishing Tory/Lib Dem commitments & broken pledges!
“Just how do they square that circle with a public and media in England who’ve happily jumped on the no CU punishment for uppity natives narrative?”
They may have an even bigger problem in Scotland. People in England will grumble a bit and make shouty posts BTL on the Telegraph and Mail but they’ll accept it the way they alway accept lies and reversals from their politicians – it’s expected.
In Scotland, however, we’ll just have voted yes despite a CU being apparently off the table. And we’ll have had 2 years of being told by Westminster and the unionists what a terrible idea it is for Scotland, and how it means handing powers back to Westminster. So many people in the Yes camp will not particularly want it and, as has been discussed here, what Westminster really want is a very long term and restrictive one – I can’t see many in a newly independent country wanting to give that away now it’s been raised and we’ve thought about it.
Those on the NO side will equally have been pumped full of “a CU is a bad idea” as well, so I’m not sure many of them will be racing to demand one. Business, of course, will be demanding it. But business has been on the no side, so implicitly part of those telling us it’s a terrible idea.
And after a Yes vote, Scotland’s voters won’t be able to be just ignored and pushed into it anyway the way those in rUK will. The SNP don’t have a mandate for any issues that are currently reserved, so it’s arguable whether they’d be able to lock us into a long term CU, and if there is political pressure for something other than a CU we’ll be having elections in 2016.
It’s all a bit of a tangled mess for Westminster really.
My country got its own currency, the Finnmark, in the 1860s when Finland was still an autonomous (devolved, if you like) Grand Duchy of the Russian Empire. Way before we gained our independence in 1917.
I wonder if we could do that? 🙂
When all is considered, it is Scotland that has the choice, do WE really want a CU?, UK is an
economic basket case, that may tell us, we should not enter a currency union with ruk it is risky for us, not them. So for us, to enter a CU what will they bribe us with, to join?, that is really the question!
@Alexandra-M
If you have the link, go to link to archive.org and put that URL in. Chances are it’ll be there.
Why not call this WOS currency union ‘Yes’ explanation “CU Jimmie”? It might tempt a few some Better Together supporters to read it resulting in the odd conversion 😉
Been saying this for months now. I don’t want to be tied to the rUK pound when it goes down the pan, which it inevitably will after indy. The truth (and ensuing panic) will out then.
Roll on September!
So another crack at this raging no Prof and got thus far
“The currency is not Scotland’s (and it’s not England’s either). It is the currency of the United Kingdom. If Scotland votes Yes to independence it will have voted to leave the United Kingdom: that’s exactly what “independence” means — independence from the United Kingdom. If Scotland leaves the UK it leaves the UK’s public institutions, which would become the institutions of the rest of the UK. The UK’s assets and liabilities would fall to be apportioned equitably between the rUK and an independent Scotland, but the pound is neither an asset nor a liability. Any gold or other reserves left in the Bank of England would fall to be apportioned. So would the national debt. But the pound itself would not. It is Scotland’s pound now because and only because Scotland is part of the UK. If Scotland votes to leave the UK it votes to leave the UK’s pound.
It really could not be more simple, could it? But it is staggering how many folk get all this wrong”
Maybe its me but if sterling is only a legal entity and not Scotland’s and its not England’s but the UK’s, why would the rUK not share this legal entity of sterling instead of risking not just so much money, jobs, sterling value, credit rate,growth etc on a no share? Here’s the final word from teamGB academics that really shouldn’t be advising anyone about anything.
” Independence means leaving the UK. Vote for that and you cannot then turn around to demand that the bits of the UK you actually like (such as the pound) come with you. Are you in, or are you out? Are you staying, or are you going? It’s your choice, Scotland. And this week, thanks to the Chancellor, we found some much needed clarity about what, precisely, that choice entails.”
In effect, Prof Tomkins just wants to say out loud and in your face, vote yes and you’re fucked Scotland, in academic précis.
Why not contact the Prof and see what he says about link to theguardian.com
@ Andy B
The newsnet site has the article on Trimble complaint
link to tinyurl.com
In all fairness to Tomkins: link to notesfromnorthbritain.wordpress.com
“Notes from North Britain – Confessions of a Justified Unionist”. He’s completely open about it, and his articles while highly deabtable, are very interesting.
dasarmy says:
Your comment is awaiting moderation
???????
“dasarmy says:
Your comment is awaiting moderation
???????”
Be more careful typing your name in future…
@Rev. Stu
I agree that the professor’s piece is largely worthless, at least on the economic points – I’m ignoring the legal aspects. He does get closer to the truth when discussing fiscal matters, but even there either misses or avoids the real issues.
That doesn’t mean you’re right though.
You say that the rUK will suffer greatly due to the loss of Scotland’s economic contribution, and will have to agree to a CU in order to get Scotland to contribute to debt repayment. But then you say this:
If your claims of disaster are true then this claim makes no sense. How is promising to do the very thing you say would bring disaster supposed to placate markets? If your disaster claims are true surely Westminster would be trying to convince ‘the markets’ that Scotland would continue to contribute after independence.
Based on your analysis, the combination of Westminster’s promise to guarantee all debt, the omnishambles that is the unionist campaign, and the continuing narrowing of polls ought to have markets in a panic. There is no panic.
Maybe the markets understand that currency sovereignty is key, and that if rUK retains control of its currency – no CU – it will have no debt problem and the markets will keep getting their interest payments.
Ah, whoops, I put it as dasarmy, finger trouble.
@Alexandra-M
If you have the link, go to link to archive.org and put that URL in. Chances are it’ll be there.
—————
In all fairness to Tomkins: link to notesfromnorthbritain.wordpress.com
“Notes from North Britain – Confessions of a Justified Unionist”. He’s completely open about it, and his articles while highly deabtable, are very interesting.
There are a few YES folk on Twitter saying that “vote No Borders” Facebook post is a fake.
If it is, then don’t use it. Plenty of real info to use again them
@Cath
If you had a blank sheet of paper and tried to design a nation that was ideally placed to institute its own currency as part of becoming independent, you’d be hard pressed to come up with something much better than the situation Scotland actually enjoys.
As an Englishman who hopes for a Yes vote, independence is, to quote another Englishman, “a no-brainer”. So is a Scottish currency, if you can get past the neoliberal mince (did I get that right?) constantly trotted out by most economists and politicians.
@Rev
What’s that you say young man? Eh …
Let’s start with tax; Business for Scotland has clearly analysed and demonstrated that Scotland is a net tax contributor to the UK Treasury, and has been for many many decades.
Then there is the electrical generated power Scotland exports to England and NI.Approaching 30% of power generated in Scotland? And I don’t think much progress has been made on justification/resolution of grid connection charges placed upon Scottish suppliers and yet subsidies paid to English suppliers
Exports: there was an article here on WOS in which it was declared by the writer(name? If he is reading this please respond), that Scottish goods exported via English ports are recorded as English exports. Scotch salmon to the USA via Heathrow by Virgin I recall.Why on earth is it necessary to send our goods to English ports. Unless of course there aren’t any suitable Scottish ports. Eh? With the length of our coastline there are no suitable locations, or no inclination to develop the infrastructure by the UK government maybe. Can’t spend the money twice and Tilbury docks has been a Big investment.
Bugger the Panda talks above about bulk exports and I mentioned before the Old Colonial trick – buy cheap in bulk, re-packaged ( arguably adding value) and sell it back to source. Job creation for the packagers, as noted by Helena Brown above. An independent Scottish government would do well to look to financial initiatives to encourage Scottish brand packaging startups.
Finally, thanks manandboy for providing your response on oil resources to the west that I referenced earlier. Now, how do we get Joe Public to accept the depth of the scandalous treatment, and current behaviour of the UK governments to Scotland?
Votenoborders uses ‘nationbuilder’
The face book page ‘wordpress’
I don’t know but does that give the game away.
Anyhoo! Aston Villa safe… 🙂
I have to confess to having great difficulty in taking the views of anyone who refers to Scotland as North Britain seriously.
@velofello
I’m with you, also we should have a ‘Scottish’ slaughter house / processing facility. I was told we don’t have one now. Someone could update us on this.
Apart from reducing cruelty to the animals by shorter travel distances why should we have to rely on a service outside Scotland.
@You and My Comb
I worked for over 25 years in New York – albeit in IT for banking, not banking itself.
I never understood why anyone placed such reliance on on ratings agencies as I never saw them warn of a boom or predict a bust. I’ve seen them give top ratings to companies that went belly up within months and I’ve seen them tear strips off “old industries” that are still around decades later.
I had friends who worked for ratings agencies, some were good, and some were whizz kids who really didn’t understand the real world, never mind complex economics.
Just think about how these companies were rating sub-prime mortgage packages. I give them no credence at all.
@heedtracker
Because without control of its own currency rUK would lose the ability to respond to economic shocks with an increase in deficit spending. Hell, they might even lose the ability to finance their external deficit without an economic shock.
Unionists are fond of saying Scotland will end up like Greece. No. Scotland will likely run an external surplus, and if so faces no ‘Greece’ risk, with or without a currency union. It is the rUK that runs the risk of following Greece, and Spain, and Portugal, and… It runs that risk, and the risks you list of job losses etc., if it no longer has its own currency.
Does anyone remember a geography exercise in secondary schools in Scotland, I think I’d have been in first or second year so between 1977 – 1979, it was a set of A4 sheets about a hypothetical ‘island’ uncannily similar to Scotland, if a tad more temperate, but similar raw materials and industries?
All the work we did on those sheets was kept. I can’t find any record of it and I’ve tried a few times using Google to get some idea about it. I’m fairly certain it was not confined to my secondary alone.
I often think about it these days. It started in me the kernel of the idea that Scotland was perfectly capable of being independently run.
@Cath
All good points.
Must admit I’m of the same opinion as your earlier post at 1.41. I’m not particularly in favour of one but would accept it. So its not really ever been a huge issue for me, but I do see some bother on the horizon for some prominent faces in Westminster should it come to pass. I reckon more than one career will come to a sudden stop over it.
@velofello
A lot of containers go from Southampton because it’s cheaper. Perhaps it’s the supercontainer ships which are currently too big for Greenock, though a hub has been mooted at Hunterston for a long while. The argument goes both ways, with a currency union that would stay the same, but without one it might well become more viable to send containers by sea from Scotland rather than ship them by road to Southampton first.
@call me dave
As far as I know Morrisons still have their abattoir in Aberdeen, a reason they’re unlikely to leave Scotland to the tender mercies of Aldi or Lidl, and it seems to me, a reason their prices for many things will not have to go up.
@Caroline Corfield
Erchie not Archie posted this earlier got lots of layers.
link to fdf.org.uk
Here is another source graghics
link to google.co.uk
Thepnr says:
3 May, 2014 at 1:05 pm
The charitable side of me wants a currency union as I would not like to live in the rUK and suffer from the results of not having one.
The uncharitable side has a kind of “hell mend them” attitude.
I’m as certain as can be though, that since it is so obviously in both Scotlands and rUKs economic interest then common sense will prevail. The only reason I’m not 100% certain of a currency union is that I have these doubts about Westminsters capability for acting with common sense.
——-
These are my concerns too!
Rating agencies compromised by payment model
link to archive.today
Analysis by Cynthia Clark and Sue Newell of the three leading agencies, Fitch, Moody’s and Standard and Poor’s, concludes that “raters have overly relied on the information coming from the organisations being rated, rather than trying to analyse this information independently.”
@cynicalHighlander
Of course, for these agencies fees are what matter. Why anyone would take their advise I have no idea. Your posted article is from Feb 2013 though, maybe they have changed in the meantime?
dadsarmy @ 5.36
But don’t you see the exact point? If Scottish exports go through English ports/arirports while Scotland remains in the union, those exports will be classified as UK/English exports.
After independence, everything going out of Scotland will be Scottish exports, regardless of whether they’re then re-exported from a neighbouring country. It’s bad news to rUK/England because part of their exports will be revealed as only “transit exports”.
Finland has a lot of “transit imports”, i.e. lots of goods that are landed in Finnish ports but then transported to Russia. The value of these imports-exports aren’t in the Finnish balance sheet. Only the revenue from the port and transport services.
Call me dave @ 5.11pm
This not slaughtering animals at the source and transporting them long distances to be slaughtered in EU-approved facilities…
It’s all a bit counter-productive. Long transport produces stress in the poor animals, however well you transport them. Stress in animal means worse quality meat. Lose-lose all around.
I remember when Laplanders (Sami and Finn) could still butcher their own reindeer at the bi-annual round-ups and some of the meat even became publically available. Not anymore.
The EU decrees all kinds of health and safety checks and all Finnish or Swedish reindeer meat has to go through the hoops. However, the reindeer aren’t ear-tagged like sheep or cows because they’re regarded semi-wild animals.
The EU doesn’t really get the reindeer economy. They imagine it’s a semi-nomadic “indiginous” culture and dismiss it with some PC talk but at the same time make it extremely difficult for that economy to work.
The Finnish state has at least acknowleged reindeer economy. Look at a map of Finland, draw a line across the middle or maybe a bit north, and south of that you have to fence reindeer in, north you have to fence fields and crops in. It’s even in our law.
So I feel bad for every “Rudolph the Red-Nosed Reindeer” that has to make the long journey to the slaughterhouses down south.
Reindeer are at their best when met in the wild in the Lappish Arctic fells. They move away from humans and their legs go knik-knik-knik. Scientist have tried to explain the sound but haven’t been able to do it yet. Closely related species don’t have knikky knees, why do reindeer have them?
When signing up to a currency union, Scotland must make sure there is a penalty free get out clause.
At the most, the commitment should be for 5 years.
In my opinion, the Scottish economy will very soon be much stronger than the rUK economy and the currency union will become unsustainable.
McCrone report anyone?
@lumilumi
Yes, exactly. The exports currently going through Southampton and other rUK ports and airports, including my small few through Stansted and Fedex, will currently be attributed to the UK but not Scotland, whereas once Independent, they will be Scottish exports even if going through rUK ports.
Craig @ 9.41
Exactly.
I don’t think it’s in Scotland’s best medium- to long-term interest to be fettered with the basket-case rUK economy.
A currency union in the short term is good for the transition period (and politically good for the SNP) but the Scottish and rUK economies and political leanings will probably diverge fairly soon after independence.
The rUK might not want a short-term currency union, they want Scotland to commit to a long-term one to help them out, while they posture about their importance and £Sterling’s strength.
lumilumi – hi doll, let’s just finish with money xx
May I remind contributors to the debate on Currency Union that all the Historic Precedents have already been set by both Westminster Houses of Parliament, the Treasury and the Bank of England and registered in the official records – “Hansard”
Almost every EX-Commonwealth Country that took Independence from Westminster and Royal Rule had their Currency supported by all the Depts. of Westminster and the Bank of England.
Scottish taxpayers and politicians were involved in these Financial Alliances for more than a hundred years, during which time the vast majority of EX-Commonwealth (EMPIRE) countries woke-up to the fact that their Wealth was far from Common when it was plundered from afar.
Any Currency Union will be short-term when the Financial Reality of Sterling is fully exposed within the Financial Markets.
MANANDBOY has shown the extent of the OIL Deposits yet to be plundered off Skye in the Atlantic Basin.
Scotland cannot ever ACCEPT our share of U.K.Debt – without plundering our share of U.K.ASSETS.
Signally, this part of the Currency Union Debate has been allowed to slip off the Agenda because our share of U.K.Assets far outweighs our share of U.K.Debt.
How is it plausible that an Independent Scotland is Liable for repayment of our share of U.K.National Debt (one-tenth)), but we do not qualify to redeem our share of any U.K.Assets??
Staggeringly, Scottish (New Labour)M.P.`s and unelected Peers subserviently kowtow to the Tory notion that Scots taxpayers must repay ONE-TENTH of U.K.Debt whilst paying tax that bought zero U.K.Assets over a period of 300 years.??
Do Scots really believe that our taxes bought zero assets??
Do Scottish New Labour M.P.`s and Unelected Scottish Peers believe their taxes bought zero U.K.Assets??
Ridicule Resonates on this contradiction.
Westminster applies UNIVERSAL levels of taxation across all the nation states of the U.K..
According to Clegg,Cameron and Mibbe-land, via this absurd logic, ALL U.K.Assets were bought by England,Wales and Ulster and are owned solely by “Them”.???
The Consequences are Crucial.
Where are the 300 years of Tax Rebates (plus Accrued Compound Interest) that are due to countless generations of Scottish taxpayers who OVERPAID TAX.??
My taxes bought zero assets when I pay the same levels of tax as workers in England,Wales and Ulster.
Therefore, I definitely Overpaid in taxes.
I am due a lifetime`s worth of TAX REBATES.
When this applies for me – the same Taxation Rules must also apply and benefit my father, grandfather, great-grandfather, and generations backwards in history.
Houston – the UNIONISTS – have a Problem.
Tax Rebates plus Accrued Compound Interest on those sums over 300 years run to Hundreds of Billions.
Westminster demands that an Independent Scotland must Repay One-tenth of U.K.National Debt whilst attempting to wriggle-out of Supplying Scotland with our rightful (one-tenth) Share of ALL U.K.Assets.
Salmond is Adamant and Correct to RIDICULE when he is supplied with contrary ammunition from New Labour, Tories and Lib.Dems. who currently reveal they are not fit for purpose in their Scottish constituences.
“GET THE CAT – A GOLDFISH”
Aye, and by the way:- Salmond has been unfairly villified for all these massive Wind Turbine Farms in Scotland by Unionists who continually select the Wrong Target. They couldnae hit a bull on the bum wi` a banjo.
The News Media have frequently informed us that, since 2010. the unelected Con.Dem.Govt. has supplied £29billion to enhance their “Green Agenda” on Renewable Energy Production.£29billion that excudes NEW NUCLEAR.
Of that £29billion the Holyrood Parliament got £13Billion.
Neither Salmond or S.N.P.Govt. is allowed (by Law)to spend these monies on any other purpose.
Unbelievably, Salmond is getting the Blame for Implementing Con.Dem.and New Labour Party Policy after spending the monies they supplied – on the purpose for which they (Westminster) supplied that money.??
Lest we Forget, Bliar and Brown also supplied many billions for Wind Turbines from 1997-2010. in Govt..
BROWN and DARLING also threaten us with the Loss of Shipyard Jobs after Independence, despite the fact that their Aircraft Carrier Contracts have Decapitated any Myth that “Clyde Built” is now anything but a Mark of Incompetence across a world where ships are invariably completed on time and on price.
It might interest contributors to know that every Frigate bought by the M.O.D. since 1965. was DESIGNED by the Naval Architects within ” YARROW`s SHIPYARD” at Scotstoun in Glasgow, where the Designs are owned in perpetuity.
However, back to Steelwork jobs and Safe Energy Production.
On August 8th.2008. the “scottish Daily Express” published my contribution as the “Letter of the Day”:-
B.B.C.`s Countryfile prog. had John Craven at the GLENDOE hydro-elec.Scheme being built by S.S.E. near Inverness.
To camera and to a Nationwide audience, John Craven supplied the Following Facts:- Glendoe Hydro-elec. scheme is costing £140 million, will supply safe (non-nuclear) electricity for 100-120 years to 500,000 Homes and Businesses.
It struck me immediately that – If we build Eleven More Hydro. Schemes of similar size to Glendoe (and include Glendoe) Scotland would have Safe Elec. for 100-120 years at a total cost at only £1.54 billion. !!!
Scotland has 2.23 million Homes.
Less than 300,000 Businesses.
We would be Overproducing Safe Non-Nuclear Elec.for all of Scotland.
Confirmed by B.B.C. in Scotland. By John Craven. On the Countryfile prog. that was Supplied with Accurate Figures from Scottish and Southern Energy who were building Glendoe Hydro-Elec. Scheme.
Nuclear-Free Electricity for only £1.54 billion.
(at 2008. Prices)
Shipyard Jobs replaced overnight in Scotland by Free Scots.
May I remind Scots that, since 2010. Clegg and Cameron have spent £29 Billion on ” Renewables “.
£13 Billion on Wind Turbines in Scotland.
D`oh ?
Rev. Stuart Campbell :- As taxpayers, every Scot enjoys (or not) representation at Westminster via our Members of Parliament.
Every Scot has Access to the House of Commons Library where every Scot can Demand a Copy of the B.B.C. “Countryfile ” programme hosted by our employee John Craven that Reviewed the Glendoe Hydro-Elec. Scheme.
Multiply £140 million by Eleven = £1.54 billion.
Business Secrecy did not apply in 2007-08. until after the “Express” shot the hare by publishing my seemingly innocuous “Letter of the Day” on August 8th.2008.
Good Hunting in the Commons.
To Rev. Stu. and Dave McEwan-Hill :- BE AWARE :-
The Scottish Daily Express Letters Page was Less than Honest with contributors when the Editor was inadvertently (?) compliant in publishing the many faces and Opinions of one :- Brian Allen (or Allan) – who must live in a Caravan or Mobile Home because this Arch Unionist Managed to get his Letters published from 7 (seven) different addresses. Cute eh.?
Needless to say – When I pointed-out this obvious anomaly to the Editor – My contributions were “Blacklisted”.
Not those of the multiple muppet.?
From Jan. 11th.2012 to April 2013 – I was “Blacklisted”
And again recently.
However, Brian Allen of Kincardine has recently reappeared on the unbiased Letters Page.
Strangely, the other six of his multiple personalities have been exorcised or cremated.
By Public Demand??
“From Jan. 11th.2012 to April 2013 – I was “Blacklisted””
You’ll be getting bloody well blacklisted here too if you post one more comment without any SODDING PARAGRAPH BREAKS in it.
The rules apply to everyone.
Vote yes and campaign for a constituent assembly
link to socialistresistance.org
I haven’t read all comments left by others, but it is rationally the case that Scotland’s borrowing costs are likely to be as low if not lower than rUK’s – because of the very economic/fiscal fundamentals that make Scotland’s contributions to the overall UK economy so important for Westminster/Whitehall.
The current level of National Insurance is Eleven per cent and every Pensioner at 2016. or 2020. or whatever date of Final Separation of Scotland, every Pensioner will be Due a working lifetime of Nat.Ins. contributions (Plus Accrued Compound Interest) from the Westminster Treasury. Lump sums-welcomed.
Unionist politicians warn Scots that we have an imbalance because we have a larger share of Pensioners (to workers) than r.U.K..
However,Scottish Pensioners must, via this logic, be due a greater share of their own money than pensioners in r.U.K..
When we also include the billions of Overpaid Tax from Scots taxes that never bought any part of any U.K.Assets (like Trident and Nuke Subs.) and we add Accrued Compound Interest to those numbers, our Scottish Pensioners will be financially – O.K..
An earlier contributor stated that :- “all Nat.Ins. contributions went into the General Treasury Pot and spent on other things.”
Having trawled through the reference books I cannot find any Westminster Legislation that Changed the original Welfare State and State Pensions Legislation of 1948. that categorically separated these from other Treasury Spending.
Anyone who can enlighten us on this Separation will be welcome to contradict.
Rev.Stu., please don`t shout at me any more – about paragraph breaks – I`m trying. Very trying.
Perhaps contributors can assist :-
Recently the RT Network show “The Big Picture” presented by Thom Hartmann had a guest proffessor who described a new type of Currency Union Concept that allowed the use of an established currency by a foreign state.
Unfortunately, my viewing was interrupted by a chronic heart-attack and I missed the crucial parts when the implementation and design of this was described.
Did anyone see the show and can they fill the blanks.?
[…] pound’ ? Even if rUK refused to enter a currency union with Scotland (they won’t) there is no way Scotland can be stopped from using the pound as it is a fully tradable […]
[…] Scotland will use on the day of independence: the pound. Whether in a currency union or not is (technically) a different matter. It is not possible that on Independence Day Scotland would instantly change […]
Most telling from the Robert Peston hatchet job ‘richer or poorer’:
“…Important decisions on currency and debt will only be made after the vote….”
So Peston thinks Gideon & his pet monkeys, Ballsup & Fanny Alexander’s joint statement ruling out a currency union is a bluff too!
[…] One link to finish on… why there will be a currency union. […]
After independence, Scotland and rUk will both want and expect Scotland to pay to the rUk Treasury appropriate sums to service Scotland’s share of accumulated debt. What currency is Scotland to use if it is not part of as currency union?
[…] or not is because Westminster can pretend that this is a serious leverage point, even though it clearly isn’t. The only reason we have uncertainty about Scotland’s status in the EU (or, more […]
[…] Wings Over Scotland _ Why there will be a currency union […]
I’m assuming the author of the article doesn’t come from an economic background as the comparison between a drop in UK GDP post independence and the drop in GDP during the recession are not the same. GDP is used as an indicator of a nation’s ability to service it’s debts by way or raising taxes. Post independence the remainder of he UK would see a drop in GDP but also a drop in expenditure so the ability to service those debts would be unaffected. To claim that GDP dropping would cause the kinds of issues raised in the article shows a complete misunderstanding of what GDP is and how it is used.
“Post independence the remainder of he UK would see a drop in GDP but also a drop in expenditure”
As is noted in the article. Please pay attention.
It is noted in the article but it fails to note the implications in terms of servicing debt. The article is basically saying gdp will drop more than it did during the recession so the results for the uk economy will be worse. This is a gross over simplification of how gdp is used and shows a clear lack of knowledge of the subject matter. There are enough decent arguments for independence and currency union without resorting to blatant untruths, whether intentional or based on ignorance.
[…] 1. For example, Rev. Stuart Campbell of Wings over Scotland on why he thinks there will be a currency union http://wingsoverscotland.com/why-there-will-be-a-currency-union/ […]
[…] For more depth: link to wingsoverscotland.com […]
[…] That said, the First Minister was remarkably restrained in choosing not to articulate just how disastrous it would be for the rest of the UK to refuse a currency union – which makes his later […]
[…] Why not keeping the pound sterling? Der schottisch Geldschein sieht anders aus, hat schottische Gesichter und schottische Geschichte. Die Schotten sollen ihn auch behalten, den Pfund. Dagegen kann auch die Queen nichts sagen. Der Sterling sei als voll-handelbare internationale Währung eingestuft worden und dürfe somit ungebunden an die Briten sogar weltweit als Währung eingesetzt werden, legte Campbell dar (S. 18). […]