Will you vote for independence?

[kebabking]

...Personally, I thought the SNP had given a hostage to fortune with the monetary union thing. However, there is a possibility that this may not play how the Tories want it to. It might just be that people react by saying "Oh, you're telling us what we can't do, are you? I'll vote Yes just to show you".

depends how its phrased and the tone used - he could very easily compare a currency union with the Euro, where the effect of having economic union without political union is like sharing a bank account with the guy down the road and then learning he has a gambling addiction. if its framed as 'a single currency on the Island is a good thing - but the risks shown by the Euro where you have economic union without political union are just too great for a rump UK government to contemplate: if we didn't take that view we'd have joined the Euro long ago..' then its not a specifically 'anti-Scottish' thing, its a 'this is a dumb idea, we're not interested regardless of who its with' thing.

knowing the boy George of course, he'll screw-up the politics of it - but it is a reasonable point - you can't, however much it might suit the SNP to say so, force other countries to share a bank account with you...

the SNP's problem - though i accept that the politics of presenting this argument are fraught with pitfalls - is that it looks like an independant Scotland is going to have to have one of two currencies: a shared currency with the (R)UK where the (R)UK presents that situation to the EU and says 'live with it..', or Scotland will be required to join the Euro as a condition of its entry into the EU. if the (R)UK government is saying that the option of a currency union does not exist, then Salmond either has to persuade the voters that the Euro isn't so bad after all, or that despite the EU saying that Scotland, as a new member, would have to join the Euro, Scotland in fact would not and could continue with a Scottish Pound.

i don't doubt that Salmond will successfully portray this as an anti-Scotland thing and that he'll get a 'Braveheart' reaction in the polls, but whether that means people will actually vote 'yes' on the day if they think it means joining the Euro is another matter.

 

[danny la rouge]

It's too early to say what reaction this will provoke, far less how it will translate to votes on the day.

The fact remains, though, that voting Yes is not the same as voting for the SNP's proposed programme.

I don't support monetary union. I said way back in the thread that my preferred option would be a Scottish currency, perhaps initially pegged to Sterling. (That, incidentally, is the SNP's fallback position. They always said that taking on a share of the UK debt was dependent on currency union. It'll be interesting to see if they now announce that this is their new preference. My bet is that they'll brave it out and say Osborne is bluffing).

 

[geminisnake]

If we don't 'keep' the pound we don't take any debt is how it's being talked about elsewhere, so really a bit of an own goal for the rUK no?
Seriously considering gold or swiss francs atm

 

[gosub]

Its not just Osbourne its all of them and I don't think it a bluff. I can't see how you do that currency union without giving the rest of the UK a referendum and there would be just as much animosity towards this tail wagging the dog down south. As to starting a new currency whilst walking away from debt commitments - good luck with that.


eta Swiss franc going to be taking a short term pounding over their immigration referendum - EU saying its ripping up its agreements with Switzerland, and gold will fall short term as China sells to find liquidity to shore up shadow banking, but both probably a safe bet over long term.

 

[geminisnake]

and gold will fall short term as China sells to find liquidity to shore up shadow banking, but both probably a safe bet over long term.

So worth keeping an eye on and buying cheap then I'm looking long term anyway.

 

[kebabking]

..The fact remains, though, that voting Yes is not the same as voting for the SNP's proposed programme..

it is to a fairly large extent - it will be the current SNP government and the current (and post 2015) UK governments that will settle the divorce settlement, and that will shape Scotland (and the rest of the UK) for some time. whatever happens with regards currency or debt, for example, aren't going to change every couple of years with party political changes in Scottish and (R)UK governments, they'll be things both parties will have to live with for the best part of a generation, regardless of whether the SNP or the Conservative party ever form another respective government.

 

[gosub]

a divorce settlement with current government West Lothian question in spades. Should be an immediate Westminster election.

eta At the very least the MP for Inverness will have to stop being Chief Secretary for the Treasury

 

[geminisnake]

I think you'll find the divorce settlement will be agreed by a committee, at least on the Scottish side(done by PR for the parties in Holyrood atm), and if we do go YES the current Govt loses at least 13 MPs iirc, some of whom are in the Cabinet.

 

[gosub]

I think you'll find the divorce settlement will be agreed by a committee, at least on the Scottish side(done by PR for the parties in Holyrood atm), and if we do go YES the current Govt loses at least 13 MPs iirc, some of whom are in the Cabinet.

Will still require parliamentary assent. But they would have to do something, Raymond O'Sullivan vs MAM 1982 will apply

 

[danny la rouge]

it is to a fairly large extent - it will be the current SNP government and the current (and post 2015) UK governments that will settle the divorce settlement, and that will shape Scotland (and the rest of the UK) for some time. whatever happens with regards currency or debt, for example, aren't going to change every couple of years with party political changes in Scottish and (R)UK governments, they'll be things both parties will have to live with for the best part of a generation, regardless of whether the SNP or the Conservative party ever form another respective government.

The white paper says that the key legislative steps towards independence will be taken by the Scottish Parliament. There will also be a constitutional convention. The programme the SNP ha sset out in "Scotland's Future" is basically what will happen if they get their way during transition and form the first government in 2016. It might be that one or other or both of those doesn't happen.

 

[danny la rouge]

Unscientific survey alert.

During the course of the morning and over lunch, I asked some people about what voting No meant. They are friends, colleagues and relations of mine. The sample size is extremely small. However, I reproduce the results for your delectation.

I spoke to 11 people (5 men, 6 women, all of voting age).

Their voting intentions are as follows:

Yes - 4

Undecided - 2

No – 5

When asked "what does voting 'No' result in?" All 11 said "No change". ('No change' was the most used phrase, but others included 'things stay as they are' and 'nothing changes').

6 of them were unconvinced when I told them this was incorrect. (Both of the Undecideds, 3 of the Nos and 1 Yes).

I asked them to suppose that No did not not mean no change. Would that knowledge affect their voting?

One of the Undecideds said it would make her vote No.

One of the Yes voters said it might make them consider voting No, but they’d need more information.

Oddly, two of the No voters said it would make them consider voting Yes. The reason they both gave was “the uncertainty”. (I doubt that this last effect would be reproduced nationally, but you never know. They are husband and wife, if that makes any difference).

The remaining 7 said it would not affect the way they voted. However, all 11 said the details of these changes should be made available before the polls.


I have no idea how representative that all is, but it does show that there are 11 people who didn't know that "A No vote does not mean no change".

It may interest you to know (again, this is utterly unscientific), but following today's currency shenanigans, one of my Undecideds has become a Yes, and one of my Nos has become an Undecided.

John Curtice, if you could test for that across the population, that'd be interesting, cheers.

 

[danny la rouge]

STUC to publish the second ‘A Just Scotland Report’ - special announcement on currency union:

"There is no reason why a position cannot be reached in which the Westminster Government concedes that currency union is possible without it being concluded that it is inevitable. It should lay out in far more detail what its expected conditions might be. Equally, the Scottish Government must concede that the outcome of any negotiation might not be acceptable to both sides, in which case, it must identify which of the other options it should pursue".

http://www.stuc.org.uk/news/1049/st...tland-report-early-excerpts-on-currency-union

Broadly agree with that.

 

[Quartz]

Scottish currency union with the rUK is a non-starter. Why would the rUK yoke itself to an independent Scotland? There's no benefit to them: you only have to look at the Eurozone disaster. Dealing with Groats as well as Pounds and Euros and Dollars and Roubles and Pesos and all the umpteen other currencies is not going to be a problem for British businesses.

 

[danny la rouge]

Scottish currency union with the rUK is a non-starter. Why would the rUK yoke itself to an independent Scotland? There's no benefit to them: you only have to look at the Eurozone disaster. Dealing with Groats as well as Pounds and Euros and Dollars and Roubles and Pesos and all the umpteen other currencies is not going to be a problem for British businesses.

You've got that the wrong way round. It is quite correct that the rUK doesn't have to join a formal currency union with an independent Scotland. But the reasons it would want to are the clear economic advantages to the rUK of doing so: the balance of payments of the rUK would benefit by over £40 billion per annum, the domestic market trade would continue uninterrupted (a huge benefit to rUK business), the labour market would be unaffected, and costs to rUK business would be minimised. These are very good reasons.

On Scotland's side, the advantages are not so clear. The Bank of England would become the lender of last resort, and it would therefore want to continue its role in regulating the financial sector. This would have an effect on employment and competition law, for example, effectively handing over huge powers to the central bank. Given that the rUK would be so much bigger than Scotland, and that in the short term Westminster is likely to want to continue with austerity ideology, this is not a sensible thing to do, in my opinion. I can see the advantages for the SNP, but that's quite different from the interests of an independent Scotland.

The SNP wants to be able to counter Project Fear with Project "Not Much Will Change". It is underestimating the population, and risking the future economy of Scotland, in doing so. They should opt for a Pound Stirling ( ). (By the way, I wish people would stop saying "Groats"; why would Scotland call its currency by the name of a coin that stopped being minted in 1856? And why that one? It's just a cheap shot by people who want to suggest Scotland is backwards).

Incidentally, the No campaign ought to explain why it is opting to deny currency union. The reasons are political, we know, but they should at least cobble something convincing together. They also need to explain what exactly they think will happen on their side, given that they are suggesting breaking up what would have been a single market; this will have effects on rUK business, as well as on the standing of Sterling in the eyes of the currency markets.

 

[danny la rouge]

Quartz, you should read Scottish Independence: Weighing Up the Economics by Gavin McCrone. He's a Unionist (former civil service economist for the Conservative UK government), but it's a good run through of the issues, if you keep that in mind.

 

[Quartz]

You've got that the wrong way round. It is quite correct that the rUK doesn't have to join a formal currency union with an independent Scotland. But the reasons it would want to are the clear economic advantages to the rUK of doing so: the balance of payments of the rUK would benefit by over £40 billion per annum

How would a different currency affect this? It won't.

, the domestic market trade would continue uninterrupted (a huge benefit to rUK business),

How would a different currency affect this? Conversion is a one-time cost and is usually a trivial change to a computer program.

the labour market would be unaffected,

It would be unaffected in the short term anyway as long as Scotland is within the EU as EU citizens have the right to work in the other EU countries. In the long term, it would depend upon how the countries fare and that is as it should be.

and costs to rUK business would be minimised.

Conversion is a usually trivial and one-time cost. British businesses happily deal with many other currencies, and one more isn't really a problem.

Long term, currency union is a disaster waiting to happen. Just look at the Eurozone.

And why that one? It's just a cheap shot by people who want to suggest Scotland is backwards).

Not on my part; it's the only Scottish coin I can remember!

The only real issue with Scotland having a separate currency that I can see is that the S symbol has already been taken by the USA!

Quartz, you should read Scottish Independence: Weighing Up the Economics by Gavin McCrone. He's a Unionist (former civil service economist for the Conservative UK government), but it's a good run through of the issues, if you keep that in mind.

It's not currently available - Amazon says it'll be available on the 12th of March. I've added it to my wish list.

 

[ska invita]

It may interest you to know (again, this is utterly unscientific), but following today's currency shenanigans, one of my Undecideds has become a Yes, and one of my Nos has become an Undecided.

John Curtice, if you could test for that across the population, that'd be interesting, cheers.

what aspect of it turned them do you think?

 

[danny la rouge]

You're reading this the wrong way, Quartz. Of course rUK can manage without currency union with Scotland. But you suggested there were no advantages to the rUK. "Why would they?" you said. There are advantages. Those are not all, as you seem to have interpreted, in the exchange rate fluctuation costs (which are not one-offs, but fluctuate, btw), but in the fact that a single market would be maintained were the Bank of England to be the bank of last resort. This creates a central authority with super-national authority over price stability, impact on fiscal coordination, governing government borrowing and so on and so on. You maintain the current single market, where goods, services, labour and capital can all continue to move freely, without restrictions.

This all benefits the rUK far more than independent Scotland because the rUK's risk is lower, since Scotland is a 10th its size. Single markets benefit business, that why they set them up. The rUK would benefit. Yes, currency union can go wrong, but again not because of exchange rates. It goes wrong again because of the central bank issue. Being a "lender of last resort" is a promise of a bailout from the central bank. This, in the Eurozone, allowed banks and governments to borrow cheaply: the central bank was their implied guarantor. Except when it all went wrong, the guarantor was overstretched.

This is unlikely to be a problem for rUK, because the level of risk it is exposing itself to is nothing like the Eurozone, with all those countries of varying economic development and varying sizes. It's one country, a 10th its size. And not only that, the debt it would be allowed to run up in today's environment with the BofE as its implied guarantor would be limited. The BofE would see to that. (That's the problem!)

What Osborne and the Lib-Dems and Labour have done is said that the Bank of England would not stand as implied guarantor for Scotland. (This opens other questions we don't have space for in one post about whether Scotland should therefore accept responsibility for debt incurred by the UK prior to the existence of an independent Scotland. "Morally", maybe. But technically? It's a topic for debate).

But there is nothing at all to prevent Scotland just using Sterling without a formal agreement and without CofE as a central bank. To me that is far preferable to currency union. (For the reasons above, all of which favour the rUK in a formal agreement but which disfavour Scotland). It has been done, can be done, will be done in future. Not usually by developed countries. But there is not technical or legal reason why not. Indeed, classical economic theory would suggest it is the better option.

That said, my preference would be a separate currency, and initially pegged to Sterling (to discourage speculative raids).

 

[danny la rouge]

what aspect of it turned them do you think?

Maybe they were ready to turn anyway. But they said it was the aspect of being told what they couldn't do by Tories. The "Oh you fucking well think so, do you?" factor.

 

[ska invita]

Maybe they were ready to turn anyway. But they said it was the aspect of being told what they couldn't do by Tories. The "Oh you fucking well think so, do you?" factor.

good
it was clearly a blackmail move, id be glad to hear that its being taken that way

 

[danny la rouge]

I should say that that's two people. I have no idea how typical that attitude is.

 

[Quartz]

You're reading this the wrong way, Quartz...

But there is nothing at all to prevent Scotland just using Sterling without a formal agreement and without CofE as a central bank.

Yes, indeed I have been reading you wrong. But here you're mooting for a de facto currency union much as some other countries use the US dollar, but AIUI Salmond wants a de jure currency union. And rUK would be idiots to agree to the latter.

However, I will pick you up on one thing:

This all benefits the rUK far more than independent Scotland because the rUK's risk is lower, since Scotland is a 10th its size.

As Iceland and Ireland have shown, smaller size does not necessarily mean a lower risk.

 

[danny la rouge]

Yes, indeed I have been reading you wrong. But here you're mooting for a de facto currency union much as some other countries use the US dollar, but AIUI Salmond wants a de jure currency union. And rUK would be idiots to agree to the latter.

The rUK has no say at all as to whether Scotland uses Sterling. What they have a say in is whether the rUK joins a formal currency union with Scotland, Sterling Zone, Central Bank and all. And they would not be idiots to agree to that, indeed it would benefit them more than it would Scotland.

However, I will pick you up on one thing:

As Iceland and Ireland have shown, smaller size does not necessarily mean a lower risk.

But that was part of a myriad of 28 member states of differing economies, is my point. Here there's only the rUK and Scotland, already closely integrated. That's what I'm saying. That's why there's a lower risk. The rUK, were Scotland to go wrong (when regulated by the BoE), would take a far lesser hit than Scotland would were the rUK to go tits up.

ETA, currency unions can be very stable, given enough central authority, as the USA has shown. The states there are not just a fancy name for counties. Those are states. But that exactly illustrate my point as to why Scotland should not enter formal monetary union with the rUK.

 

[danny la rouge]

While I'm here, I'll pick up on the point I skipped over in the post above about accepting responsibility for national debt.

The Unionist case is this: the old state of Scotland ceased to exist in 1707. That's why Unionists talk about the Act of union rather than the Treaty of Union; you can't have a treaty between two partners if one doesn't exist. All that is needed in that case is an Act of the only parliament that now exists. (The new British parliament technically is a new entity, but in reality it's the old English parliament continuing, enlarged).

Further, should an independent Scotland be created after the referendum, then that will be a new legal entity. It won't be a part of the old UK continuing. Unionists are quite clear on that. There will be no grandfather rights. This new entity will have to negotiate all its own treaties and agreements; it will inherit nothing from the UK. Not EU membership. Nothing. It's a new entity. Those existing treaties and agreements will all be inherited solely by the rUK, which will be seen as the UK continuing. That is the Unionist argument put time after time.

So, given that this new entity which didn't exist before will have no relationship with the Bank of England, not as lender of last resort, not as anything, why would it agree to shoulder a burden of debt incurred by an altogether different entity before its existence? Those debts were incurred by the UK, which is an entity the rUK is supposed to be the continuation of. Scotland inherits nothing.

 

[JTG]

While I'm here, I'll pick up on the point I skipped over in the post above about accepting responsibility for national debt.

The Unionist case is this: the old state of Scotland ceased to exist in 1707. That's why Unionists talk about the Act of union rather than the Treaty of Union; you can't have a treaty between two partners if one doesn't exist. All that is needed in that case is an Act of the only parliament that now exists. (The new British parliament technically is a new entity, but in reality it's the old English parliament continuing, enlarged).

Further, should an independent Scotland be created after the referendum, then that will be a new legal entity. It won't be a part of the old UK continuing. Unionists are quite clear on that. There will be no grandfather rights. This new entity will have to negotiate all its own treaties and agreements; it will inherit nothing from the UK. Not EU membership. Nothing. It's a new entity. Those existing treaties and agreements will all be inherited solely by the rUK, which will be seen as the UK continuing. That is the Unionist argument put time after time.

So, given that this new entity which didn't exist before will have no relationship with the Bank of England, not as lender of last resort, not as anything, why would it agree to shoulder a burden of debt incurred by an altogether different entity before its existence? Those debts were incurred by the UK, which is an entity the rUK is supposed to be the continuation of. Scotland inherits nothing.

So, Unionist arguments involving no automatic EU membership etc which also involve a slice of UK national debt going to Scotland are essentially having their cake and eating it?

 

[danny la rouge]

The biggest demand of the SNP was currency union. Now what has the rUK got as a bargaining chip? It's given away its best card. It is hoping Scotland votes No, and it doesn't have to negotiate anything with a new Scotland. But what if the gamble goes wrong?

How do they get Scotland to take a share of the debt?

 

[danny la rouge]

I've only just seen this, but it ties in very nicely. Here's what Nicola Sturgeon has to say in the Guardian:

"We have got a UK government here that appears to be putting forward this notion that Scotland's deal in the union is to shoulder all of the debt but have none of the assets. [...] It begs the question: why would anyone want to stay part of a union where we are treated with such contempt?"

"The debt belongs legally to the Treasury. They confirmed that point last month. You can't default on debt that is not legally ours".

"But we have always said, and I will say again here very openly, I that Scotland should meet a fair share of the costs of servicing that debt. But assets and liabilities go hand in hand".

http://www.theguardian.com/politics...ting-scottish-independence-snp-currency-union

Except, the three main UK parties have just given away the only reason that an independent Scotland would want to shoulder any debt.

 

[danny la rouge]

BBC getting it all wrong again. To the extent of misrepresentation. The headline they have is:

Independence vote: 'Yes' means no Scottish pound, says Osborne
http://www.bbc.co.uk/news/uk-scotland-scotland-politics-26166794

No it doesn't.

1. First of all, an independent Scottish currency could be called the Pound, after all that's what it was called before 1707. Several countries call their currency the Pound. Ireland did from 1928 until they joined the Euro, changing over to Euro coins and notes in 2002. (Irish pound in English, Punt Éireannach in Irish).

Were Scotland to opt for a separate currency it would probably be called the Scottish Pound (in English), or Pund Scots (in Scots). So if Osborne gets his way, that means there would be a Scottish pound.

2. Even if the headline means Pound Sterling, it is still wrong. Scotland could use Sterling without formal currency union, all that would mean is that the Bank of England would not be the lender of last resort, and there would be no financial or fiscal regulation by the central bank.

3. What Osborne is actually saying is that he will veto formal currency union, effectively he will not let Scotland use the Bank of England as a lender of last resort.

4. Several commentators (including former Scottish Labour leader Henry McLeish) don't believe him anyway: there are good reasons he would reverse that post Yes. The SNP certainly says it thinks he will change his mind if there is a Yes vote.

 

[danny la rouge]

From that BBC link:

Labour's former Scottish First Minister Henry McLeish criticised the intervention by the three pro-union parties, and said Scots "shouldn't be fooled" by the suggestion that a currency union could not be worked out.

He told BBC Scotland: "This is entirely political and of course consistent with the unionist campaign. This is negative, it is about spreading fears and scare stories.

"What we require from the unionist parties is a bit of statesmanship and quite frankly their behaviour so far falls well short of that."

Iain Macwhirter, in the Herald, says that "The Bank of England [...] doesn't want a separate currency in Scotland undermining the UK balance of payments"

 

[DotCommunist]

do the scottish electorate hold the same sort of vague patriotic attachment to the pound as the english? I asked during the ' referndum promised over withdrawal from the eu' thing amongst friends about wether we'd be happy to go the other way and go euros. The response was overwhelmingly 'no' and in one case went as far to say 'only countries with a crap currency joined the euro and look where thats got them' (my uncle, the arch patriot)


also 'If it hasn't got the queens head on it its just monopoly money'