A field day for the currency pessimists

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THERE is a line in the UK national anthem that celebrates General Wade’s crushing of “rebellious Scots”. This week it was General George who was sent north, and – judging by some of your correspondents (Letters, 14 February) – many of my fellow Scots remain crushed to this day. 

The lack of some Scots’ self-confidence is – it would seem – crippling, manifesting itself in an assumption that the worst of all possible outcomes would befall an independent Scotland, a presumption of failure over success, of incompetence over competence. 

Peter Robertson’s letter, for example, presents an apocalyptic view of an independent Scotland, managing to squeeze in words like “bankrupt”, “terrifying”, and “capital flight”. After then suggesting that a Scottish currency could quickly lose 75 per cent of its value he then says – apparently without irony – that “the risks cannot be exaggerated”. 

Derek Miller goes even further, stating unequivocally that independence is simply “unachievable, undesirable and unworkable”. Mr Miller has every right to consider it undesirable, but has he told the 193 independent nations on earth, three-quarters of which have smaller economies than Scotland, that they are doing something “unworkable and unachievable”? They might find that quite surprising. 

Such stark pessimism about Scotland is something I have never understood, but nor am I a blind optimist. Thankfully any objective, analytical viewpoint is also supportive of Scotland’s likely success as an independent nation. For example, an independent Scottish currency’s prospects – other things being equal – would probably be stronger than sterling, due to Scotland’s better balance of payments.

Similarly, in an in-depth report last week, the Financial Times concluded that an independent Scotland would be “relatively wealthy, richer than the UK”.

There are good economic and political arguments both for and against independence. But for me one of the most compelling arguments in favour is that it would tackle a destructive and persistent negativity about Scotland that would seem to remain within many of its own inhabitants. 

C Hegarty 

Glenorchy Road 

North Berwick, East Lothian 

THE quality of the independence debate must be reaching rock bottom.

Yes says: “We’ll keep the pound!” – No replies: “We won’t let you!”, like children squabbling over toys.

The Yes campaign could have made a bolder choice than proposing to keep sterling as a currency; after all, we already need to change our Scottish money for Bank of England notes to buy a sandwich at King’s Cross railway station, so perhaps a Scottish pound loosely pegged against sterling and the euro is not such a long shot after all.

The No campaign is losing the debate by insisting Scotland will need Westminster’s permission to keep anything the way it is, but this is mistaken: the catch of independence is that the people of Scotland will decide on currency, border politics, foreign politics, etc, in a fair and democratic way, without needing anyone to tell us we’re allowed to do so.

Even supposing England wouldn’t want us to keep the pound: North Korea uses the euro for all its foreign transactions, and if you want to buy anything in Argentina these days you’d better be carrying US dollars, yet I doubt the ECB or the US Federal Reserve signed off on ­either of those set-ups.

How exactly David Cameron’s government imagines implementing a currency embargo on Scotland, and how this would benefit the people and businesses south of the Border, is beyond me.

The key technical question is whether or not Scotland will inherit from the United Kingdom: Mr Osborne seems to think Scotland will not inherit any share of UK assets, yet will be held accountable for its sovereign debt. Under what inheritance law do the children inherit the parents’ mortgage, but not the house?

Scotland faces an important choice in September, with opportunities and risks either way; however, if we want the referendum to mean anything at all, then the debate leaders must move on from reassurance versus intimidation, and start talking some sense.

Haro de Grauw

Raemoir Road

Banchory, Aberdeenshire

CALLS are being made for us to hear the SNP’s “Plan B” should some of its plans not come to fruition because of the actions of a churlish Westminster government. Is it not time we heard about the Unionist parties’ own Plan B should the outcome of the referendum be in favour of independence?  

K Macdonald

Market Lane

Linlithgow, West Lothian

The Scotsman may have a point in calling for the SNP to consider a Plan B as an interesting political conundrum is bubbling up from the Westminster swamp following the crudely concerted show of unity by the unionist parties in refusing to entering into a formal currency union with Scotland following a vote for independence (your reports, 14 February).

Firstly, we can discount the Liberal Democrats, who have been emasculated by their senior partners in coalition, and who, in the persons of Nick Clegg, Vince Cable, Danny Alexander and Alistair Carmichael, have only served as a bonus to the Yes campaign.

Clearly the contest for the 2015 UK election lies between the Tories and Labour and the implication of the intervening independence referendum are clear. If Scotland votes Yes, the loss of his Scottish MPs will make it hugely more difficult for Ed Miliband to win a majority. In this scenario, the Tories’ winning a majority would be significantly easier, but David Cameron would go down in history as the PM who presided over the break-up of the UK. He could not survive.

In any case, it appears that the real power lies with Mr Cameron’s eminence grise, George Osborne. So there is a real chance that this is who Scotland will be dealing with post-September 2014.

Would Osborne really be so vindictive as to refuse to enter a currency union and add millions to English companies’ bills and a massive amount to rUK’s balance of payments deficit? Would the rUK Treasury, shorn of North Sea oil revenues wish to see the rUK’s debt to GDP ratio rise above 80 per cent, thus attracting a risk premium on sterling-denominated assets?

Hard though it might be to believe, the answer to both these questions is “possibly”.

So therein lies the dilemma and paradox within the conundrum and the Scottish Government would do well to acknowledge the reality. For my part, looking at the performance of Osborne, Alexander and Ed Balls, I found myself wondering where the rehearsal was held and whether more voters would now be convinced that we would be better shot of “Sic a parcel o’ rogues”.

Douglas Turner

Derby Street

Edinburgh