An undecided friend asked whether issues of National Debt, Shipbuilding, and a Currency Union raised by the recent Peston BBC programme on Independence were scaremongering or genuine. For anyone else who is similarly unsure, heres my reply: DEBT - definitely scaremongering ( scotland.gov.uk/Resource/0041/00418420.pdf ) and publicfinance.co.uk/.../independent-scotland.../ ) : We are already paying our share of the debt (interest and capital) as calculated by Westminster. This includes a proportion they allocate to our account based on items they reckon as UK-national expenses. These include the upkeep of Westminster, the House of Lords, and a share of major infrastructure projects in England which are supposed (by them) to benefit us. It also includes the so-called defence deficit which sees the Scottish share of defence spending as the highest in the EU despite the closure of bases here, the merging of regiments, and the fact that we have not one single major warship in Scottish waters. The differential is estimated at £1.1 billion/year in 2010-11 and rising. Even with all that, our deficit runs at 5.1% of the UK total (and we have roughly 9.6% of the UK population). Under Independence, it would be even less as the UK-national expenses would not be coming out of our resources and our deficit would be sharply reduced or, possibly, non-existent. In short, if we can afford the inflated amount we pay now, we can afford it under Independence when, in any case, it will be smaller and, hopefully, reducing. Under the UK, it is increasing daily. SHIPBUILDING CONTRACTS - definitely scaremongering ( heraldscotland/.../never-mind-aircraft... and independent.co.uk/.../scottish-dockyards-to... and wingsoverscotland/faster-than-we-can-type/ ) The links speak for themselves, but may be summed up as: the existing commitments to build on the Clyde will take place even after Independence, and an Independent Scotland would not only need its own ships built there but currently we require a large amount of non-military shipping which could also be built there. CURRENCY - either scaremongering or an illustration of self-destructive insanity ( wingsoverscotland/why-there-will-be-a.../... ) If you deny a currency union, you remove a basic pillar of the UK Balance of Payments and thereby weaken the pound. This could lead to devaluation. This would be bad for us all in the short term (rising prices of imports) but, in the medium to long-term, would favour exports. Scotland is a net exporter. The UK is not. Guess who would emerge better from THAT scenario. In any case, there has been plenty of leakage from Westminster indicating that a currency union cannot be ruled out and that the definitive statements against were a propaganda measure at the urging of Alistair Darling who has seen much of the NO support fade away. The Governor of the Bank of England is often cited by the media as being against a currency union. In fact, hes stated that he will accommodate whatever decision the politicians reach. Heres what he REALLY says: The Bank of England governor confirmed to SNP committee member Stewart Hosie that Scotland and the rest of the UKs economies are highly correlated, which is beneficial for a currency union arrangement. Carney dismissed suggestions that he thought a currency union was a bad idea. I have been absolutely clear and I will continue to be clear that what I have tried to do, what the Bank has tried to do, and what we will continue to do is to draw attention to economic issues which the interested parties can address and then others can make the judgments, he said. At no time have I said, or will I say, that I do not support or that I advocate a currency union, either side of the debate. The Huffington Post UK 11/03/2014 Personally, Im none too fussed about whether we get a currency union or not as I believe any initial upset would be pretty quickly compensated by the healthier Scottish economy. If there were such a union, however, it would have to be for at least 10 years - to ensure market stability. Id say that, at the end of that period, we should have our own currency as we would have proved to the world we could handle it. Ireland made the mistake of holding onto the £ for too long and paid the price for the UKs recessions. It only started to prosper when it decoupled itself from the £ (and Ireland and Iceland, contrary to UK media propaganda, are emerging from recession faster than the UK).
Posted on: Thu, 10 Jul 2014 16:12:58 +0000
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