CONFUSED about the currency? Let me help… Alex Salmond says: “It’s our pound and we’re keeping it.” How can he be sure? The pound is an “international tradable currency”. Any country can use it. We don’t need permission. So why are Ed Miliband, Alistair Darling and George Osborne shouting about saying No? They now admit they cannot stop Scotland using the pound – but they say the rest of the UK will refuse to enter a formal “currency union”. Explain currency union… The two countries would share the pound as well as the Bank of England. And they would reach sensible agreements – for example, to keep state borrowing within certain controls. Support for independence increases despite growing anxiety about how Yes vote would affect Scotlands economy, says survey Is it just Alex Salmond’s idea? No. It was proposed by an independent fiscal commission of leading economists asked to examine currency options for an independent Scotland. The experts, who included Nobel prizewinners Professor Joe Stiglitz and Prof James Mirrlees, said a range of different currency options could be successful. But they thought a currency union was the best. Would we really be independent if we shared the pound? Yes, France and Germany share a currency but everyone agrees they are independent countries. Belgium and Luxembourg were in a currency union for many years. From the 1930s until the 1970s a large, worldwide “sterling area” existed. Alex Salmond goes on the counter attack over pound claiming: No camps tactic of ruling out currency union makes no economic sense So what could we do differently from the UK while sharing it? Control all taxes, instead of just seven per cent at the moment. Access the vast wealth of Scotland, which the Financial Times says is one of the top 20 richest countries. Boost industry, create jobs and protect public services. Establish free full-time childcare, saving families up to £4000 a year. Always get the governments that we vote for. Control welfare to stop the vindictive sanctions and cuts to disability benefits. Control employment law to tackle low wages. Get rid of Trident and stay out of illegal wars. That sounds like independence to me. It is – although the Labour leader in Scotland dismissed the powers listed above as “wee things”. Ed Miliband piles pressure on Alex Salmond by vowing to make a veto on currency union a general election manifesto pledge Will the rest of the UK benefit from a Scottish currency union? Yes. Scotland’s oil and gas industry boosted the UK balance of payments in 2011-12 by £40 billion. Without Scotland’s contribution, the pound would weaken. Could England suffer without a currency zone? Yes. Economists calculate a refusal would cost UK businesses £500million in transaction costs. But the Westminster parties are saying they won’t let us share the Bank of England if we vote Yes. The Bank of England is a publicly owned asset that Scottish taxpayers have contributed to. If Westminster grabs all the assets of the central UK bank then, under international law, it also gets lumped with the liabilities, ie the UK’s £1.3trillion debt. So with no currency union, there’s no debt for us? Absolutely scot free. How much will we save? Scotland’s share of debt interest is calculated at £5billion a year. But the No campaign say Scotland would be considered a defaulter and our interest rates would go up… Wrong. On January 13, 2014, the UK Treasury issued a statement to the money markets, saying it would honour all the UK debt if Scotland voted Yes. This was despite the SNP government offering to pay in negotiations after a Yes vote. You cannot default on debt that is not yours. Why do Tories and Labour want to lumber the people of England, Wales and Northern Ireland with extra debt? Good question. Do they mean it? A “senior UK minister” quoted in the Guardian said the threat was a campaign tactic and that “of course, there would be a currency union”. So they are bluffing? You’re on the money. by Joan McAlpine.
Posted on: Thu, 14 Aug 2014 19:32:09 +0000