Blogs

The Battle for Threadneedle Street

30 January 2014

4:13 PM

30 January 2014

4:13 PM

I thought it obvious that Mark Carney’s trip to Scotland yesterday was a bad day for Alex Salmond and the Scottish nationalists. Sure, the governor of the Bank of England said, a currency union between Scotland the the rump UK could happen and be made to work but it would be fraught with difficulty and sacrifice too. Do you really want to do that? How lucky do you feel? Carney, being a Canadian and therefore a man crippled by politeness, did not add “punk”.

In response the SNP were reduced to pushing a meaningless poll which found 70% of Britons favouring a currency union after independence. That is, 70% of the 97% of people who have not thought much about this or who know nothing about it favour the status quo. Perhaps that sounds harsh or insulting; it isn’t meant to be.

Even so, there are many reasons why a currency union should be desirable and why it would be sensible for governments in London and Edinburgh to agree to one. From a business perspective it is the least worst option available.

Nevertheless, many desirable things are never achieved. The nationalists argue that Treasury opposition is based on political calculation not economic self-interest. George Osborne or Ed Balls will change their tune if presented with the reality of Scottish independence. Well, they might.

But what if they do not? This is what I mean by suggesting Salmond is writing a cheque he cannot honour. It is not up to him. It will be a matter for the Westminster parliament. And that parliament may decline to give Salmond everything he wants.

It is easy to see what Scotland gains from a currency union. It is harder, despite nationalist assurances to the contrary, to see what the UK would gain. Or, to put it another way, would those gains be sufficient to offset the increased risk the UK would take on board by agreeing a currency union with another sovereign country? Perhaps they would but I don’t think that’s a slam dunk case.

By way of illustrating this, let’s consider a hypothetical example that helps, I think, illustrate the point. Suppose, just for the sake of argument you understand, the Republic of Ireland decided it no longer wished to be part of the eurozone (suppose too there was a mechanism for leaving the euro) and, instead, wished to be part of a sterling zone. What would Westminster do?

[Alt-Text]


The comparison, of course, is not exact since the Scottish and UK economies are more closely integrated than the British and Irish economies. Nevertheless, this is a thought experiment and Ireland is closer, culturally, economically and physically, to the UK than any other country so the idea, rough and ready as it may be, will suffice for these purposes. 40% of Irish imports come from the UK, after all.

So, what would Westminster do? Would the British government agree to take on the additional risks involved in being the lender of last resort to Irish banks? Would Westminster really want a banking union with the Republic? Once upon a time, perhaps. After the regrettable implosion of recent years? That seems less likely. We pay more attention to low-probability-but-cataclysmic-consequences risks than we used too.

Perhaps this makes the mistake of fighting the last war all over again. Nationalists twitter that, look, the Netherlands and Germany share a currency yet remain distinct and independent places. Their independence has been clipped but it’s not negligible. This is true.

Nevertheless, anyone who has paid any attention to Irish politics in recent years will be aware that seeing the Boys from the Bundesbank move in to Leinster House so they could supervise the Irish budget was considered both a humiliation and a reminder of how much (hard-won!) sovereignty Ireland sacrificed when it joined the euro.

Sure, this was the worst of times and all that. Sure, too, Ireland is slowly emerging from its calamity. Sure, too, however, that it will still be subject to supervision in the future. As will other countries within the eurozone. And, of course, the pressures for harmonising policy – on tax and so much else – will become stronger, not weaker, in the future. Room for deviation from an agreed, central, plan will be constrained. This is the future.

Which makes sense since if sovereignty is pooled risk must be pooled too. Irony klaxon: this is how the UK operates at present. An uncharitable evaluation of SNP policy might conclude the nationalists want to rip it all up and then sellotape everything together again.

But, again, even if Scotland were to adopt a separate currency it could not hope to escape the large shadow cast by England. In bed with an elephant and all that. The additional powers the SNP seeks are not, whatever Johann Lamont says, wee things but they are severely qualified things.

That’s why John Swinney and Alex Salmond ceaselessly insist that tax will not be levelled at rates greatly higher than those levied in England. They have no wish to encourage capital flight. A future Scottish government might take a different view, in which case good luck to them. But, for the time being, we should accept that in broad terms the SNP leadership accepts the value of tax competition (eg, corporation tax) and recognises the damaging impact of tax increases. If they change their mind they will surely tell us…

In other words, an independent Scotland and the rump UK will find themselves harmonising many fiscal issues whether there is a currency union or not. As, of course, is the case now.

This hardly means independence no longer exists as a sensible or coherent concept, merely that it is severely circumscribed by pressures that, if you like, are unofficial as well as official. It will still be different from, say, devo-max even if, in many respects indy-lite and devo-max are, say, 85% the same. That 15% does make a difference, not least since the side you fall on that divide is liable to owe something to where your thoughts on identity likely lie.

So, to recap, a currency union of the sort envisaged by Alex Salmond is possible. It might even be the best available idea. For Scotland at least. But what if England says no? That’s why there will have to be a Plan B even if it must also, for obvious political reasons, be kept a secret for the time being.

Again, I don’t claim that the SNP’s proposals can’t happen or are necessarily unworkable, merely that they make a number of assumptions that cannot and will not be tested until independence is actually upon us and it is too late to go back. That’s fine and I think we can live with it but, daftly, I do wish they could be more honest about the essential unknowability of all this.

Finally, at First Minister’s Questions today Mr Salmond suggested the Bank of England belonged to Scots too. I am not sure this is the case. It is an institution, not an “asset”. After independence it will remain the central bank of the United Kingdom. I am not sure that a party that has chosen to leave the United Kingdom can claim residual “ownership” of a share of the United Kingdom’s institutions.

Subscribe to The Spectator today for a quality of argument not found in any other publication. Get more Spectator for less – just £12 for 12 issues.


Show comments
  • El_Sid

    But what if England says no? That’s why there will have to be a Plan B
    even if it must also, for obvious political reasons, be kept a secret
    for the time being.

    A currency union does not need to be a formal one, you could do something like Ecuador or El Salvador, adopting a currency without a formal currency union. See eg this paper from the Atlanta Fed, which is quite a fan of the discipline such an arrangement imposes, even if the politicians and Salmond’s mates at RBS might not be so keen.

    http://www.frbatlanta.org/filelegacydocs/erq306_quispe.pdf

  • Chris

    The Bank of England was nationalised in 1946. That makes it an asset not an institution.

  • david denton

    Alex Salmond needs to understand what Mark Carney was saying – becasue Mr Carney is now running the UK! http://getwd50.blogspot.co.uk/2014/01/the-morning-after-night-before.html

  • BoiledCabbage

    Breaking up the UK would be a lose-lose for both sides – debt ratings, bank solvency and currency stability would be affected. Financial crisis was a major factor in the Union in the first place – so history may repeat itself.

  • Bonkim

    Mark Carney made a very valid point – which is common sense after all. Now Scots may well choose to go solo and good luck to them but count the costs before jumping ship.

  • Doggie Roussel

    A couple of thousand words wasted, Alex !

    It ain’t gonna happen.

    The Scots are fully well aware of the benefits (unavailable to the English) which they enjoy… in areas such as health care, retirement benefits, education etc…not to mention that the Westminster exchequer favours them to the tune of more than £1600 per head compared to the English.

    Prescriptions in Scotland are currently free to the Scots, as is education in English universities, whereas the English have to pay extortionately for a Scottish university education.

    There are over 50 Scottish MPs in Westminster able to vote on English matters, but not a single English MP able to cast a vote over anything relating to Scotland.

    It was the Eton-educated Scottish MP, Tam Dalyell who highlighted the West Lothian question… at last someone without blinkers or bias… and where is he now?

    The Scottish will vote through their wallets and they know where the milch cow is.

    This is all an exercise for the wretched Scots to aerate their perceived grievances against the detested English and to create some very noisy, but ultimately futile, sabre rattling.

  • Barry Byrne

    I never understood this claim that there will be a ‘Residual UK’ or ‘rUK.’ Surely Scotland is dissolving the union, not leaving it. Any constitutional experts around to set me right?

    • allymax bruce

      I’m no constitutional expert, but, ‘Dissolution’ is the correct ‘legal instrument’ that will be used to ‘dissolve’ the political contract, (Treaty of Union 1707); where-as, the lazy, vacuous & incorrect (cited-by-the-ignoramus), instrument of ‘Secession’ is the wrong ‘instrument in Law’. Moreover, Dissolution is a stronger ‘instrument in Law’, than Secession; Scotland’s Independence is Guaranteed!

      • HJ777

        You’re not an expert on anything.

        You seem to think that most Scots agree with you. They don’t.

        • allymax bruce

          Having ‘no credibility’ from scumbag journos like you is a compliment; not an insult! In-deed, I no-more speak for anybody, than does Paul Kavanagh, Kenneth Roy, Pat Kane, Robin McAlpine, Mike Small; all, of whom are happy to steal or disclaim my work! It must be something about journos/media/tv types; they all have that self-appointed smugness that belies their true faults as human beings. In psychoanalysis, it’s calleda ‘false-self’. Again, in-deed, it seems to be a trait of all the media to have a ‘hateful personality’, but they seem to thrive on it; a perverted pleasure of ‘sorts’! I’ve got used to your hate now; it doesn’t bother me anymore. In-deed, God tells me to love my neighbour & fellow Man, so I do; regardless of your riddled & rankoured ugly cringing souls. It’s people like you that have so much worldly hate in your hearts, it diminishes the light of God’s Spirit; patently obvious yours has almost been completely extinguished. I’ve noticed all your comments on this forum are hateful; you must have some repressed anxiety trying to come out, but you are denying it; turning it into a deeply harmful manifested hate; of which, you attempt to disown by ‘projection’. You will soon be another mean-spirited cringing old soul; staring at ‘the Light’, cringing ‘bah-humbug’! When I was a little boy, me & my pals used to play ‘goodies & baddies’; I always wanted to be a goody, and there were more than enough that wanted to be baddies. Seems we are still functioning these fixations!

          • HJ777

            I suspect that, rather worryingly, you are proud of your insulting, aggressive, ignorant and idiotically childish posts.

            • allymax bruce

              Shut-up you snake, you started it; I wasn’t even talking to you. You butted-in to my comment to someone else, and tried to insult me. Moreover, my comment isn’t aggressive at all; I’m just defending myself, while you try to spin your evil darkness! You can’t fool me, you snake; your ‘darkness’ is seen! And,you do this to all the independence supporters on this forum; you’re a manipulative troublemaker, it’s your ‘method of operation’! You entice, goad & attack people with insults & smears, and when they defend themselves you squeal like a stuck rat. You have attacked 95% of all Scottish Independence supporters on this thread alone! You purposely pick a fight by insulting someone, then try to smear that person with cowardly accusations & manipulative smear. Proud? I won’t take insults, nor lectures on ethics, morals nor integrity from a cringing journo snake like you. You epitomise the whole ‘darkness’ used by the MSM e/tactile Press & TV News in Scotland; constantly pumping out an evil ‘dark noise’ hate Zeitgeist into Scots society; from every MSM medium at your Unionist control. Last year, I stopped reading everything, and watching anything, that is ‘contrived’ by your ‘dark noise’ BBC Scotland News, STV News, Scotch press, etc; and it makes for a brighter day! Don’t bother making a slippery or squealing reply, I won’t be back to talk to you. (Mark 6:11).

              • HJ777

                You really are quite pathetic.

                I would be delighted if you don’t “talk to me” as you have nothing intelligent to say.

  • AJConstantine

    I ask what may seem an absurd question, but please do read this post to the end.

    The question is whether you would be prepared to vote for say, an American citizen to be your local MP knowing that if elected this MP would be voting in the UK Parliament on measures that might damage US interests?

    I assume you might be rather cautious in the above circumstances as the American if elected might face a conflict of interest and loyalties.

    The same type of conflicted loyalty is likely to arise if Scotland votes for independence. While there is international law available to guide us on the allocation of a state’s assets and liabilities on its break-up (The Vienna Convention etc), and while not all the issues being discussed are likely to be controversial, there would surely be some issues arising on the break-up of the UK state that are up for grabs by either the Scottish or the English/rUK negotiating team.

    As far as I am aware there are no men or women with English identities who sit for any Scottish constituency. There are however quite a few Scots who do sit in Parliament for English constituencies.

    If Scotland votes ‘Yes’ and negotiations begin in the Autumn later this year, the Coalition cabinet will presumably determine the negotiating position of England/rUK in the talks with the Scottish government on the allocation of the assets and liabilities of the British state.

    Should we then expect those members of the Cabinet who have Scottish family origins or Scottish heritage to stand aside from this key area of politics? After all, wouldn’t the likes of Danny Alexander, Cameron, Michael Gove, IDS and possibly others too suffer from divided loyalties?

    We should not as a matter of both principle and practice require a man to have to choose between his loyalty to his nation and his responsibilities to his employment in another nation’s service, should we?

    • Andrew Morton

      We actually have an Englishman as Scottish Minister for Education. If he was one of the negotiators would you expect him to favour England? Do you seriously think that the likes of Gove or Liam Fox would favour Scotland over England?

      • AJConstantine

        If forced to choose between putting the interests of my nation (England) before those of my employment, I would not hesitate to do so.

        I would expect most people would place a higher value on their nation than the interests of their employer. Don’t you?

        I do not know either Mr Gove or Mr Fox so I cannot comment on their actual personal loyalties.

        But often it is good sense not only to seek to avoid any actual conflict of loyalties, but also to avoid any perceived perception of divided loyalties by firstly declaring an interest and then staying silent on the particular issues where there might be seen to be conflicted loyalties at work.

        • AJConstantine

          A further reply to Andrew Morton.

          Many of those who live in England have traditionally thought of themselves as British. In fact, the UK has always been a multi-national state. The two Treaties of Union of 1707 did not seek to abolish the Scottish and English nations (to the contrary in fact). It appears to me that the UK will sooner rather than later break up into its constituent nations.

          In the above circumstances, loyalty to the UK will just be irrelevant because there will be no UK left! Our loyalties will be to our individual nation pf England or Scotland or Wales (I leave NI out of this discussion) and these nations may soon become nation states as so many in Scotland wish to be the case for that nation.

          • Andrew Morton

            Your question is very good one. I think if you put Gove up against a wall at point of a gun and forced him to choose, he’d pick England every time. Blair too.

  • Daniel Maris

    It was easily a win for Salmond. He got to look prime ministerial. Carney effectively conceded that monetary union could take place.

    What was previously surrounded by nagging doubts is now more bricks and mortar for the SNP’s scheme.

    • AJConstantine

      Agreed. The British media have not quite reported it like that of course!

  • MacRiada

    “Would Westminster really want a banking union with the Republic? Once upon a time, perhaps. After the regrettable implosion of recent years? That seems less likely.”

    Less likely?

    Come on Alex.

    http://blogs.spectator.co.uk/alex-massie/2010/11/to-solve-the-irish-question-ireland-must-first-admit-there-is-a-question/

    Of course your article above, and comments made by MPs etc., came in 2010, a year before the SNP won a majority in the Scottish elections. The dynamics of their victory in 2011 setting in motion the independence referendum, and not the “regrettable implosion of recent years” in Irelands banks, means that the tune has to change…

    • MichtyMe

      Earlier this month Ireland borrowed on the market 3.275% 10 year bonds, about the same rate as UK…..Hmmm

  • http://effiedeans.posterous.com/ Effie Deans

    I’m getting quite sick of the endless debate about what Carney might have meant to say when he was clearly being careful to be neutral. The UK government have made it pretty obvious that they are unlikely to be interested in a currency union if Scotland chooses to become independent. Nationalists think they are bluffing and would change their tune if we vote Yes. But even if the UK government categorically ruled out a currency union, nationalists would still say that they were bluffing. It’s looking ever more likely that this is another matter, like EU membership, which will remain uncertain until such time as Scotland votes Yes and negotiations begin. On the other hand, if we vote no we will definitely keep the pound. Therefore if someone really wants to keep the pound, the choice is between a certainty and an uncertainty and its obvious which way such a person should choose to vote.

    • Andrew Morton

      Duh! Thanks for pointing this out. Definitely voting No now.

    • HenBroon

      Haud… ah say haud me back…

      • Wessex Man

        do grow up.

  • HenBroon

    What a hoot. A year ago we were being screeched at that we would never get a referendum as the supreme court in London was supreme and would block us for ever. Since then of course posh boy Cameron has been blind sided by Alex Salmond and agreed to our referendum, signed the Edinburgh Agreement in Edinburgh, whilst being allowed to think he had “sorted us out.”

    Now we are being screeched at that we cannot use the £ that belongs to us and is a fully traded international currency, and could be used by Bhutan if they so desired, as can the $ and may other currencies.

    Oh the lovely sound of shivers tearing round Westminster desperately searching for a vertebrae to run up. The sound of tightening sphincters drowns the snores in the chamber of priveledge and corruption The Lords. Laugh I nearly paid my TV licence.

    • mightymark

      No – the point is not whether you use it or not, but the terms on which you use it. and whether you actually have any control over it. That is what Carney very politely discussed and that is what led I suspect to sphincters tightening, not in the Lords but in SNP committee rooms throughout Scotland – though I accept that some of you guys are putting up a good show of pretending otherwise.

  • asalord

    A few weeks ago Westminster was forced to guarantee Scottish debt
    repayments because of pressure from the markets in the city of London.
    How long till Westminster is forced to accept a common currency with an
    independent Scotland because of similar pressure applied by the markets?
    The First Minister has time on his side.
    All he has to do is sit back and wait.

    • BoiledCabbage

      Scottish debt is not a problem – oil income can be used as security, or be required by the BofE

  • AJConstantine

    I would like to raise some other general points to do with the dominant position of England if Scotland does leave the UK.

    The last census figures in 2011 gave the following population figures:

    England 53.0 million
    Wales 3.1 million
    NI 1.8 million

    Using the above figures, England in 2011 had some 92% of the total population of the rUK, and I assume that proportion is and will continue to increase quickly.

    As both Wales and NI have their own devolved Assemblies, it seems to me that both English national identity and interests are likely to become the dominant political background to Westminster politics. To a large extent, the Westminster Parliament will become an English Parliament.

    I make one further prediction. Those of us who already assert an English personal identity try to be aware of our Anglo-Saxon history. And the English people were of course formed from the Jutes, the Angles and the Saxons. In other words, the creation of Englishness is in large part a story of assimilation. Question: will those living in England who at present have a British identity start to take on an English identity? I think we should encourage this if at all possible.

    • Wessex Man

      You don’t need to, I am as proud to be an Anglo-Saxon Englishman as you are to be a Scot but wait on the Scotland’s DNA results most of Glasgow and Edinburugh are also mainly Anglo-Saxon.

      I fully support the Bravehearts of the SNP and the racist Cybernat nutjobs bigots on here from Scotland who want their ‘freedom’ as do a bigger percentage of my fellow English, if that doesn’t tell you something you need to get out more.

      • Rocksy

        Glasgow is (was) Irish.

    • dougthedug

      “England in 2011 had some 92% of the total population of the rUK, and I assume that proportion is and will continue to increase quickly…it seems to me that both English national identity and interests are likely to become the dominant political background to Westminster politics.”

      Since England is currently 84% of the UK in population terms what makes you think that, “English national identity and interests”, aren’t already the dominant political background to Westminster politics?

  • AJConstantine

    Has anyone picked up on the role that party politics in England might play if Scotland votes ‘Yes’ and the detailed negotiations on the break up start?.

    I cannot see either Labour or the Lib Dems in England allowing the Tories
    in such negotiations to steam-roller Scottish aspirations.

    Indeed would the Scottish members of the Scottish Labour party and of the Scottish Lib Dems expect and call on their counterparts in England to exercise a moderating influence on the London Government’s attempt to stand up for the interests of England/RUK?

    We also need to consider the influence that Scots who live in England might wish to use to assist their homeland. Messrs Gove, Duncan-Smith, Rifkind and even Cameron etc all have Scottish ancestry and espouse a Scottish identity. My assumption is that these ethnic Scots (and many others living in England like Blair) will surely not wish to push Scotland into a corner in any Scottish-RUK negotiations.

    What is really noticeable for me at present is that there is not one major politician in any of the three main political parties, whether in the Commons or Lords, who asserts a personal English identity and claims to speak for England.

    • HJ777

      That’s not really the point.

      In negotiations you do what is best for your own side. It’s not your job to consider what is best for the other side unless it also benefits you.

      • AJConstantine

        After a Yes result for Scottish Independence would say a Labour MP sitting for an English constituency see his/her first loyalty to his ideological colleagues in the Scottish Labour party or to England/rUK?

        We also need to consider the many Scots who sit in the Commons for English constituencies, as well as the over-proportion of Scots in the Lords. Hard to see them backing a strong negotiating position against Scotland in the break-up negotiations, isn’t it?

        And as for the ever present and numerous Scottish mafia in the media can we expect them to be studiously neutral or cheering for England/rUK or Scotland?

        Personal identity may become rather more central an issue in our politics if the Union breaks up. “To which home nation does your personal loyalty really belong?” may be be a sensible question to ask of all public figures.

        • HJ777

          Individual MPs wouldn’t negotiate, the government would.

          And how do you think the governing party would do at the following election if there was a suggestion or evidence that they didn’t act in the interests of the people they are supposed to represent?

          • AJConstantine

            Many Westminster parliamentary constituencies have been safe territory for one or other of the big parties, while so many electors either vote for party above all other considerations or really do not follow politics, then I think you are being too generous in your views above.

            I find it hard to understand how it is in the national interest to be wasting so much money on foreign aid, or why our brave soldiers are still in Afghanistan. But Tory tribal votes will still vote for Cameron et al in 2015,

    • Andrew Morton

      The thing to remember is that after a Yes vote there will be a sudden outburst of pragmatism and reasonableness. For example, it’s in RUK’s interest to ensure that Scotland gets accepted as a full EU member because that would give it an ally in Brussels with thirteen votes. Why would it be in either country’s interests to promote antagonism and disharmony? Stephanie Flanders in her famous You Tube video makes this very point.

      • Daniel Maris

        Quite. Trying to build the No campaign on fear and fabrications was never a good plan.

    • dougthedug

      “Indeed would the Scottish members of the Scottish Labour party and of the Scottish Lib Dems expect and call on their counterparts in England to exercise a moderating influence on the London Government’s attempt to stand up for the interests of England/RUK?”

      I suspect the Scottish members of the Labour party and of the Lib-Dems would try and get the worst possible terms for Scotland in the hope that it would rejoin the Union. There is no separate “Scottish Labour Party” or “Scottish Lib-Dem Party”. All are members of either Labour or the Lib-Dems.

  • Andrew Morton

    I’m not an economic or financial expert although I can see that there are reasons for both countries to agree a sterling area, not least because the financial markets would probably prefer it in order to reduce cross border costs. I also believe that the Treasury would be concerned to lose nearly 10% of the tax base and suffer a major hit to the balance of payments.

    However I believe that Alex Massie is wrong and in support of my view I cite a financial organisation which has a long history of making a profit by calling things the right way. What is this organisation? Ladbrokes.

    Today they announced that they would be accepting bets on whether or not Scotland would be using the pound. The odds? If you want to place a bet, the odds are 100/1 on that Scotland and the RUK will share the pound. That’s a 99% certainty.

    • mike2R

      Hmm, and you can get £50 back for every £1 betting the other side. With the stake returned if Scotland stays part of the UK.

      While I think it likely that a currency union would happen, and anyway don’t think a yes vote is at all likely, I might just have a flutter on that.

    • HJ777

      You certainly aren’t an economic or financial expert, judging by your comments.

      If Scotland were to secede, whether the currency would still be shared or not would make no difference to either the tax base of the balance of payments. That effect would come from secession alone.

      As for Scotland remaining in the Sterling zone, you miss the point. It is possible. it may even be likely. But it is not certain and if it did happen, it would be entirely on terms dictated by the rest of the UK. Scotland would undoubtedly be forced to submit to a monetary regime over which it had neither control nor influence – it would lose the current shared sovereignty (where Scottish economic data is equally proportionately weighted in influencing decisions) in favour of no sovereignty whatsoever.

      The question is why Salmond isn’t being honest about this. Of course, we all know the answer.

      • Andrew Morton

        Thanks for your insults. Leaving aside the tax base issue, which I included as, if both countries were in the currency union, then the tax base would partially support the value of the pound, RUK currently imports around £17 billion of oil from Scotland which is paid for in pounds. If Scotland had its own currency or used the Euro, then this oil would have to be purchased in US dollars even if not bought from Scotalnd. This would have the effect of reducing the value of the pound.

        • HJ777

          I wasn’t being insulting, merely agreeing with you that you aren’t an expert, as you went on to demonstrate.

          It makes no difference whether oil is paid for in pounds or whether pounds are converted into dollars and then oil is purchased with dollars. You are making the mistake of thinking that it matters where the oil comes from – it doesn’t (albeit different grades of oil tend to come from different geographies, so prices vary).

          Yes, the value of the pound would probably be different outside a Sterling union than within. The problem with this is?

          • Andrew Morton

            Have you ever heard of the balance of payments!

            • HJ777

              Yes I have. And your point is?

  • FF42

    The new “currency union” is simply a ruse to get enough Scottish voters to choose YES. Come the day after the referendum, assuming independence is carried, negotiations will start and the union Mark II will quietly disappear off the table. It doesn’t matter: there will be no going back.

    Salmond is a wily operator and knows exactly what he is doing.

    • FF42

      PS. The assets and liabilities of the Bank of England are indeed eligible to be split between rUK and a newly independent Scotland. This doesn’t mean rUK will guarantee future liabilities of an independent Scotland, nor does it compel rUK to join a currency union with Scotland. This is nonsense of the highest order and sadly typical of the man.

      • Andrew Morton

        So why doesn’t George Osborne rule it out? . . . . . . . . . . . . (Tumbleweed rolls slowly past).

        • wycombewanderer

          That is exactly what Salmond wants an anti tory vote, that’s why he wants the Prime minister to get involved in a debate.

          He knows he can not win without it.

          • asalord

            Well,is seems the tory lord,Ian Lang,is doing his best to help the independence movement in Scotland.

            http://www.heraldscotland.com/politics/referendum-news/lord-lang-war-dead-remark-in-speech-is-attacked.23298135

            • allymax bruce

              Ruth Davidson tells Lord Lang that she
              ‘deplores any intemperate language’, but she, Ruth Davidson, the highly intemperate & controversial Leader of the Scotch Conservatives, has herself been ordered to ‘withdraw’ many deplorable & intemperate remarks against Scotland’s Democratically elected First Minister! Ruth Davidson is an intemperate & deplorable Westminster-Led politician, doing Scotland real harm. In-fact, all the Unionist politicians in Scotland are ugly, cringing, hate-inciting hypocrites; all they do is scrunch-up their faces, don a hateful scowl, and screech hateful accusations, lies, disingenuous remarks, and this is the credibility the Unionist politicians have in Scotland; ZERO!

              • HJ777

                and yet they still have far more credibility than you.

                • allymax bruce

                  Having ‘no credibility’ from scumbag journos like you is a compliment; not an insult! In-deed, I no-more speak for anybody, than does Paul Kavanagh, Kenneth Roy, Pat Kane, Robin McAlpine, Mike Small; all, of whom are happy to steal or disclaim my work! It must be something about
                  journos/media/tv types; they all have that self-appointed smugness that belies their true faults as human beings. In psychoanalysis, it’s called a ‘false-self’. Again, in-deed, it seems to be a trait of all the media to have a ‘hateful personality’, but they seem to thrive on it; a perverted pleasure of ‘sorts’! I’ve got used to your hate now; it doesn’t bother me anymore. In-deed, God tells me to love my neighbour & fellow Man, so I do; regardless of your riddled & rankoured ugly cringing souls. It’s people like you that have so much worldly hate in your hearts, it diminishes the light of God’s Spirit; patently obvious yours has almost been completely extinguished. I’ve noticed all
                  your comments on this forum are hateful; you must have some repressed anxiety trying to come out, but you are denying it; turning it into a deeply harmful manifested hate; of which, you attempt to disown by ‘projection’. You will soon be another mean-spirited cringing old soul; staring at ‘the Light’, cringing ‘bah-humbug’! When I was a little boy, me & my pals used to play ‘goodies & baddies’; I always wanted to be a goody, and there were more than enough that wanted to be baddies. Seems we are still functioning these childhood fixations!

        • Wessex Man

          George Osborne doen’t need to do anything at all, The Governor of the Bank of England has set out the UK’s stance in this matter and it doesn’t matter how much you try twist it he will stand firm. Your argument is with fellow Scots who want to stay in the Union.

          Alex Massie, who almost always gets his predictions wrong is talking a load of ****.

          I still wish you well in your campaign for independence, just start telling the truth.

      • HenBroon

        Barclays had no problem finding a lender of last resort, yes they who were major share holders in RBS bailed out by the Fed and the Arabs. They who paid billions in fines and are still paying.The BOE is not the only game in town. The EU are also moving rapidly towards becoming LOLR to the EU nations. The days when London told Scotland what to do and think are over. Get over it.

        A currency union is in the interest of the RUK as much as Scotland as without Scotlands contribution to the Sterling zone balance of payments the RUK will be looking at a credit status considerably worse than the present -AAA. What is typical of the man aka Alex Salmond is that he has more nous in his pinky than all the posh boys of Westminster rolled in to one. He is the most popular politician Scotland has ever had, and that after 6 years in power is remarkable. He has given Scotland back her pride and dignity and turned the country round from being a basket case in to an emerging powehouse. That is why London despsies him and is working hard at undermining him. Cameron is a snivelling coward, briefing against Scotland internationally as Russia revealed, a coward who does not have the backbone to debate with Alex Salmond as their would be one winner only, Scotland. Saor Alba gu Brath.

        • Wessex Man

          oh dear how sad.

        • FF42

          Yes, but he’s not exactly being honest with the people of Scotland, is he? I know all politicians dissemble. but Alex Salmond is in a league of his own. Perhaps that’s what you mean by having more nous in his pinky…?

      • Mike

        I doubt Scotland could afford their share of the liabilities !

    • asalord

      The First Minister is certainly the most astute politician in these isles.
      His gradualist approach towards Scottish independence has been successful for many years now.
      I have no doubt whatsoever he,and Scotland,will be successful again.

      • Nicholas chuzzlewit

        Yes but he will have to look elsewhere for a currency because the BOE and the Treasury have just kicked him very hard in the Nuts.

  • David L

    This article fails to mention the main reason why the rUK would desire a currency union – namely the boost to the value of sterling provided by Scotland’s vibrant export market. Scottish energy, whisky and food exports make a major contribution to the UK’s balance of payments and the rUK would be foolish deny a currency union for that very reason.

    • HJ777

      I wasn’t aware that the value of the pound was considered too low on the foreign exchanges.

      • David L

        It’s not particularly low, no. However, a disproportionately large quantity of the UK’s exports come from Scotland, especially in the sectors mentioned above. To remove these from the sterling area to score a political point would be both petty and extremely foolish.

        • HJ777

          You fail to explain why it would be an advantage to a Sterling zone.

        • mike2R

          But would it? If you are correct that Scotland would prop up the value of the pound beyond where it would be without Scotland, then surely that would be a benefit to Scotland and hurt the rest of the UK.

          Scotland would profit from the drag of the rest of the UK on its currency, improving the competitiveness of its exports beyond where they would otherwise be. While the rest of the UK suffers from a higher pound than its economy justifies.

      • MichtyMe

        But there is a too high trade deficit.

        • HJ777

          Too high for what?

    • FF42

      the main reason why the rUK would desire a currency union – namely the
      boost to the value of sterling provided by Scotland’s vibrant export
      market.

      Scotland’s export market is important to Scotland, but rather insignificant compared with the much bigger English market. And that’s the problem with the New Currency Union idea. It’s only of marginal benefit to England, arguably a nice to have. But the headaches and downsides are big, not to mention the inevitable political resistance in England to setting up new arrangements with Scotland following the dismantling of the Union.

  • sfin

    I could have stopped reading this when I read the Nats poll that “70% of Britons” favour a currency union. How about polling the English? – as it seems we never get a say in these things…

    Britain’s occasional flirtation with socialism has been, in large part, down to the Scots. That, thankfully, will disappear after independence, and this fact has led to my conversion to the fat, wee shysters cause.

    It is inconceivable that, once the Barnett formula comes out into the open after independence, that the English electorate will wear it.

    You want to go on your own – crack on – better start brushing up on your German though!

    • Angus McIonnach

      “How about polling the English?”

      It’s 79% in Scotland.

      It’s 71% in rest-of-UK.

      “once the Barnett formula comes out into the open after independence”

      I have no clue what this is supposed to mean.

      • HJ777

        The SNP only commissions polls designed to support its case.

        If they designed it wrong and get the answer they didn’t want, do you think they would publish it?

        He who pays the piper calls the tune. When an interested party commissions a poll which just happens to support their case, only the terminally naive take it at face value.

        • Angus McIonnach

          Oh good, lame straw-clutching generic wittering about the survey wording.

          • HJ777

            So you are one of the terminally naive then.

            • Angus McIonnach

              Here’s the question, for any open-minded readers:

              “Scotland and the rest of the United Kingdom are among each other’s largest trading partners. Putting aside your own views on whether or not Scotland should become an independent country, if independence does happen do you think that Scotland and the rest of the UK should continue using the pound in an agreed sterling area?”

              Does the first sentence set people up to think favourably of sharing the £? Could be. But bear in mind the poll result was massively in favour.

              Sorry – not everyone is an embittered Jock-basher.

              • HJ777

                So, in other words, the SNP concocted a leading question for their poll, just like they tried to get away with for the referendum.

                Governments do not make major economic decisions on the basis of opinion polls commissioned by the SNP. I know you find this incomprehensible but it is a fact.

                Now where did I suggest that everyone was an “embittered Jock-basher”? That seems to be how would like to label unionists, which includes most Scots. Personally, I am as Scottish as I am English (as I am Welsh) and have plenty of (Scottish) family in Scotland, lived in Scotland for quite a few years and my daughter lives and works in Glasgow (at the university, whose disproportionate level of research funding from the UK taxpayer would have to replaced – somehow – if Salmond gets his way).

                Now, you wouldn’t be one of those unpleasant English-bashing SNP supporters, would you? You know, the ones Salmond claims he doesn’t encourage but on whose support he is absolutely relying, would you? I think you are.

                Personally, thanks largely to my mixed-UK parentage and background I have no truck with people like you who seek to antagonise and divide.

              • sfin

                I’m perfectly open minded on this – and actually, if I’m to be completely open, have a sentimental affection for most things Scottish (stemming mainly from my military service and study of Victorian British history). It is not a ‘patronising English view’ – even 20 years ago, I would have looked to Scotland for British leadership – and, post 1997, most of the great offices of state were occupied by Scots – or English of Scots ancestry – and there is a huge argument (of which I’m still undecided) that the British Empire was, in fact a Scottish one…
                The fact is, today, you are a small North Western European nation with a population, less than London. Whiskey and a rapidly dwindling oil supply, do not a nation make.
                To me, the Bundesbank imposing its will on the Scottish economy would be a crime – but, like I said, if that’s what you want, crack on!

                • HJ777

                  It’s what he wants, but then he is not representative of most Scots – he just likes to think he speaks for them.

                • HenBroon

                  Perhaps you should try your bigoted ideas on some Danes, Swedes or Fins, you know just three of the 195 independent sovereign countries on earth.

                  By Dominic Frisby in The Independent.

                  “Each year the World Bank, the IMF and the CIA each independently publish a list of the richest countries in the world – as measured by GDP per capita at purchasing power parity.

                  The UK sits at a rather disappointing 21st, but topping those rankings you have the likes of Qatar, Luxembourg, Singapore, Brunei, Norway and Switzerland.

                  Some of these nations have got there thanks to their oil. But oil isn’t everything – otherwise the likes of Saudi Arabia (28th), Russia (43rd) or Iran (78th) would feature.

                  Others have got there because they are financial or commercial centres. But the same regulatory options that have enabled them to be so are open to other countries – they have just not been adopted.

                  There is, however, one characteristic common to all the top ten ranking nations, bar one. It is that they are small. In the top five, Singapore and Norway both have around 5 million; Qatar 3 million; Luxembourg and Brunei around half a million.

                  The one exception is the US. It ranks 6th (IMF), 7th (World Bank) and 14th (CIA). In 1950, and indeed in 1970, it was top. Back then though, its states were semi-autonomous and, on a gold standard, its money was independent. As its state has grown and power become more centralized, its ranking has slid.

                  This is because there is a direct correlation between the size of the state and the wealth of the people – the bigger the former, the smaller the latter. The more power is concentrated, the less wealth is spread.

                  But in a small nation, forced to live from a smaller tax base, there is more of a limit to how big state institutions can grow. Monitoring becomes more efficient, it is harder to obfuscate, so there is more transparency and accountability, and less waste. Change is easier to implement, making a nation flexible, dynamic and competitive. With fewer people, there is less of a wealth gap between those at the top and the bottom.”

                • HJ777

                  There are plenty of small poor countries and plenty of big rich ones.

                  Many more people live in the large rich countries than do in the small rich ones.

                  Poor argument to say “we’ll be richer because we’re smaller”. Clutching at straws, in fact.

                • sfin

                  Excellent argument , although, I’m no bigot- forcing me to research (damn you! I’m busy tonight!) I’ll try to get back to you…

                • HJ777

                  You are accusing someone else of being a bigot?

                  Pot. Kettle. Black.

                • Wessex Man

                  I take it that henbroom is a born again racist.

                • Daniel Maris

                  In addition to whiskey and oil, Scotland has plenty of green energy, frackable gas, and – very important agricultural land.

                  As technology has developed, and will continue to develop, all cold climate areas become more habitable and productive.

            • HenBroon

              And you know something else?

              The BOE is now independent and has no political masters.

              Scotland has it’s own government called The Scottish Government run by the SNP for the last 6 years, and is doing rather well.

              The days of London telling Scotland what to do and think are gone, maybe that is what is getting up your nose. Get over it.

              • HJ777

                Wrong.

                The MPC committee members are political appointees. The MPC targets are set by politicians.

                The SNP has no influence though.

                You really don’t get anything right, do you?

      • HenBroon

        Neither does sfin, but is sounds good in the pub…

    • MichtyMe

      What, “the Barnett Formula after independence” it’s about getting rid of that and all the rest. Oviously clueless plus the school playground abuse, your disqalified from the discussion.

      • sfin

        Oh really? I’m “disqualified from the discussion”? I see the Socialist Republic of Scotland is already taking shape! Unfortunately (or fortunately, in your case) your economic position precludes you from making such decisions.

        • Angus McIonnach

          Dry your eyes ‘sfin’. If you talk nonsense people are going to pull you up on it.

          • HJ777

            That’s precisely why I’ve been pulling you up.

            • Angus McIonnach

              Sick burn dude.

  • AQ42

    Of course, Ireland had a de facto currency union with the UK from independence until sometime (I forget when) in the late 70s when they decided to cut free and join the ERM. Until then you could use English notes and British coins freely in Ireland.

    And, Mr Salmond, shared ownership of the Bank of England — the clue is in the name!

    • Angus McLellan

      The Irish Free State only “used Sterling” in the most literal sense (that is, the Free State didn’t print any money) in the 1920s. After that it had its own pound, pegged to Sterling in various ways. For much of that second period, Sterling notes continued to circulate in Ireland.

    • Angus McIonnach

      “Bank of England — the clue is in the name!”

      But the clue can’t be in the name, since the BoE is the UK central bank. You could call it the Bank of Mars and it’d still be the UKCB.

      • MichtyMe

        The BoE was nationalised in 1946 and its share capital purchased. Is there still BoE shares, I assume so, so it’s a divvy up.

        • Nicholas chuzzlewit

          Which would give you around 9%. Good luck trying to outvote the 91%.

  • HJ777

    Salmond position is that the rest of the UK should have no say over policies that affect Scotland, but that Scotland (i.e, in his mind, he) should be able tell the rest of the UK what they should do.

    Fortunately, most Scots are reasonable people and will see Salmond’s position for what it is – both ridiculous and arrogant towards their fellow citizens in the union.

    • Angus McIonnach

      “Salmond position is that the rest of the UK should have no say over policies that affect Scotland”

      Salmond’s actual position is that the rest of the UK will have a fair bit of say given we will be in a currency union with the rest of the UK. Of course even then we’d have much more independence than we have now as a semi-autonomous region funded by a “pocket money” system so it’s still worth it.

      • HJ777

        No – Salmond SAYS Scotland would be in a currency union with the rest of the UK but he hasn’t bothered to ask whether the rest of the UK would agree. And the rest of the UK has no incentive to say anything on the matter or provide any guarantees yet or even ever.

        And if he wants such a union and the rest of the UK were to agree to it, it will not be on his terms – it will be on terms dictated by the rest of the UK.

        So a seceded Scotland’s interests would not be taken into account, whereas, at present, Scottish data is equally weighted in proportion to population in any monetary decisions as any other part of the UK.

        • Angus McIonnach

          “the rest of the UK has no incentive to say anything on the matter or provide any guarantees yet”

          Well yes of course, pre-referendum we’ll continue to have blustering non-definitive comments about a £zone from the No camp, even though public opinion is favourable to Scots and rUK continuing to share the same currency.

          “or even ever.”

          When negotiations commence they will need to “say anything”. That’s slightly sooner than never.

          “it will not be on his terms”

          Gosh really? Knock me over with a feather. The 9 times smaller negotiator wont dictate the terms you say?

          Of course, the usual Salmond-bashing Spectator suspects will never come around to the idea of a £zone, I’m not expecting that.

          “Scottish data is equally weighted in proportion to population in any monetary decisions as any other part of the UK.”

          Something about this: Do you think Scottish data is going to move interest rates perceptably? Of course not. Don’t fool yourself that Scotland gets some tailored monetary policy as a region of the UK that would be that different from rUK-tailored policy.

        • XWheme1937

          мʏ ғʀι­­­­­­℮­­­­­­ɴɖ’ѕ ѕт­­­­­­℮­­­­­­ք-αυɴт мαĸ­­­­­­℮­­­­­­ѕ $62 нօυʀʟʏ օɴ тн­­­­­­℮­­­­­­ƈօмքυт­­­­­­℮­­­­­­ʀ. ѕн­­­­­­℮­­­­­­ нαѕ в­­­­­­℮­­­­­­­­­­­­℮­­­­­­ɴ υɴ­­­­­­℮­­­­­­мքʟօʏ­­­­­­℮­­­­­­ɖ ғօʀ 6 мօɴтнѕ вυт ʟαѕт мօɴтн н­­­­­­℮­­­­­­ʀ քαʏƈн­­­­­­℮­­­­­­ƈĸ աαѕ $17610 ʝυѕт աօʀĸιɴɢ օɴ тн­­­­­­℮­­­­­­ ƈօмքυт­­­­­­℮­­­­­­ʀ ғօʀ α ғ­­­­­­℮­­­­­­ա нօυʀѕ. н­­­­­­℮­­­­­­ʀ ʟαт­­­­­­℮­­­­­­ѕт вʟօɢ fox800&#46­com

    • HenBroon

      You are wrong and making stuff up a sure sign of hysteria.

      • HJ777

        “You are wrong” is a pretty devastating argument by your standards.

        Congratulations!

        • HenBroon

          It is more than enough for a lackwit like you who simply posts unsubstantiated lies and propaganda.

          • HJ777

            Your arguments always consist of resorting to insults and calling everyone who disagrees with you a liar, don’t they?

            You are typical of so many ScotsNats but, fortunately, entirely untypical of most Scots.

            You are trying to antagonise and provoke to promote division. What’s actually happening is that you are embarrassing yourself.

    • HenBroon

      Making stuff up again ya wee rascal, off to bed with you before mummy catches you getting her laptop all icky.

      • Nicholas chuzzlewit

        Ignorant fool alert.

Close